Source · Select Committees · Public Accounts Committee
Recommendation 21
21
Accepted
MoD needs better data to inform decisions on inventory disposal, especially for unserviceable stock.
Conclusion
Nonetheless, the MoD acknowledged that its decision-making needs to be informed by better data; for example, missing data within its Navy base inventory system on why inventory is unserviceable makes it difficult to understand what should be disposed of. The MoD would like to reach a situation in which it better understands what unserviceable stock is repairable and what may be overstocked but is worth keeping for contingencies.46 The MoD has now put in place another set of projects to target disposals, but these are disparate and some areas, particularly the Royal Air Force, have achieved more than others. DE&S intends to place all the resource associated with disposals under one owner to ensure that a consistent pace is achieved across all areas.47 45 Qq 59–66, 68 46 Qq 64, 71–72 47 Q 67 16 Improving Defence Inventory Management
Government Response Summary
The government agrees with the committee's observation, confirming it is forming a single centralised disposal team in 2024 and introducing a new Base inventory system by 2024-25 to improve data quality, disposal decision-making, and consistent management of excess and unserviceable inventory.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2028 6.2 The department continues to tackle the challenge of identification and disposal of excess and obsolete inventory. Over the past 10 years, DE&S has established a series of successful standalone projects. Using learning from these projects, the department is creating a single centralised disposal team, tasked with processing disposals from depots. This will utilise existing suitably qualified and experienced staff and exploit best practice. 6.3 Forming up in 2024, this team will expertly manage disposal services intelligently targeting problematic areas of the Defence inventory. The introduction of the single Base inventory system across Defence in 2024-25 will be a critical enabler ensuring process alignment across environments, improved visibility, and assurance of disposal candidates. Annual corporate targets will remain ensuring consistency in the forecast and processing of disposals; targets for the financial year 2023-24 stock reduction are on track to be met. Initial effort will concentrate on removing obsolete and excess inventory from non-explosive storage depots; later phases will turn to explosive storage and front-line command units. 6.4 The challenge presented through the disposal of unserviceable equipment (items currently unfit for issue) requires the department to take more risk on disposal decisions. This conflicts with the increasing emphasis on resilience, which is likely to be a limiting factor in the efficiency that can be achieved in inventory holdings. The department may need to re-assess its stock metrics and be more conservative in disposals, which would lead to the department potentially keeping more inventory in the future, as a lesson from Ukraine.