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The Type 45 Destroyer is being procured to form the backbone of the Royal Navy's air defence capability for the next 30 years, and will provide a very impressive capability compared to the Type 42 Destroyers which is it designed to replace. There have been a number of problems on the project, meaning it will enter service over two years late and £1.5 billion over its original budget.
The Department has had to extend the life of the Type 42 Destroyers for longer than originally planned as a result of the delays to the Type 45. These ships are increasingly expensive to maintain, provide a more limited capability than the Type 45 and are more vulnerable to the most up to date threats from a modern enemy.
The Department originally planned to buy 12 ships. However, because of reduced threat, revised planning assumptions and an intended improved network capability, this number shrunk to eight and eventually just six. Despite this, the Department's requirement to have five ships at sea at any one time remains unchanged. It will be more challenging for the Department to meet this requirement with only six ships.
The problems on the Type 45 project result from the Department's failure to take sufficient account of the technical risks involved in such a complex project in its estimates of the likely costs and timescales to deliver, or in the commercial construct which it agreed, which led to a poor relationship with industry. Following a far-reaching review of the project, the contract was renegotiated in 2007, and there have been no further cost increases or delays since then.
Although the Type 45 will enter service in 2009, it is a disgrace that it will do so without a PAAMS missile having been fired from the ship, and will not achieve full operational capability until 2011. Other equipments and capabilities which will enhance the ship's ability to conduct anti-air warfare operations will not be fitted until after the ship enters service in some cases.
It is essential that the Department learns the lessons from both the failures and successes on this project, and applies them to its other programmes such as the Carrier, if it is to avoid a repeat of the cost overruns and time delays that have been a feature of so many of its major Defence projects. The Department also needs to apply the lessons in taking forward its longer-term support arrangements for the Type 45, which have yet to be finally agreed.
On the basis of a report by the Comptroller and Auditor General,[1] we took evidence from the Department on capability provided by the Type 45 Destroyer, the reasons for the cost increases and delays on the project, and the lessons learnt for the Carrier project and support contract.
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