Procurement Fraud Drives Costs Soaring In Ministry Of Defence

Procurement fraud has sent costs soaring the Ministry of Defence (MoD), after new figures revealed it had led to 90 per cent of detected fraud value since 2020.

A written question, tabled by Maria Eagle in April, required the Government to find cases of fraud in the MoD since the Conservatives came to power 14 years ago. 

Defence fraud has cost the Government almost £1 billion since 2010.  Cases of procurement fraud appeared to be the main driving force for the rising costs over the last four years. It accounted for more than 90 per cent of the total figure of just over £600 million costs since 2020.

Procurement fraud was broadly defined in 2011 by National Fraud Authority as covering a wide range of "illegal activities from bid rigging during the pre-contract award phase through to false invoicing in the post-contract award phase". 

A 2021 Public Accounts Committee report found the MoD's procurement system was "broken", and repeatedly wasting billions of pounds of taxpayers' money. This was backed up by a 2023 Defence Committee report, which found it was "highly bureaucratic, overly stratified, far too ponderous, with an inconsistent approach to safety, very poor accountability and a culture which appears institutionally averse to individual responsibility."

In recent years there have been allegations that the MoD paid millions of pounds to a firm that being was used as a conduit for secret payments to Saudi officials, along with warnings that a £3.2bn delayed battlefield system could become a "disaster".

Theft of defence assets has also increased, from costing the Government £19,000 between 2019/2020 to £1.38million between 2023/24. From 2019 the detected cost of fraud in the MoD shot up considerably, driven by rising