The government is wasting up to £2.5 billion (R33 billion) a year due to delays in defence projects, Channel 4 news reported.
Channel 4 said the figure was drawn from a report which the government had commissioned but had not published because it was too embarrassed by its contents.
The defence budget is under pressure as government borrowing soars due to the recession. The government is also facing repeated accusations that it is failing to provide troops in Afghanistan with the helicopters and armoured vehicles they need.
Channel 4 said the report, by former Ministry of Defence aide Bernard Gray, concluded that the government was wasting between £1.5 billion (about R20 billion) and 2.5 billion (about R33 billion) a year because of incompetent defence procurement decisions.
It did not disclose its source for the information, Reuters reports.
The network said the government could afford only two thirds of the defence equipment it was buying. When it ran out of cash it had to delay projects, but costs continued to mount up as workers had to be paid.
A decision last December to delay a contract for two Royal Navy aircraft carriers by up to two years could cost more than £500 million (R6700 million), Channel 4 said.
The report recommends regular reviews of defence policy, fixing the Ministry of Defence’s budget so the ministry can plan ahead and bringing private sector expertise into the department that handles procurement, the network said.
It said the procurement department, which employs 23 000 people, could be privatised.
Defence minister Kevan Jones told Channel 4 he would not discuss the contents of what he called a draft report.
The draft report would feed into a government document on defence to be published early next year, he said.
Prime Minister Gordon Brown’s government announced plans last month for the first strategic defence review in more than a decade, a move that could lead to cuts.
The Conservatives called the Channel 4 disclosures “a damning indictment of 12 years of incompetence” by the Labour government, in power since 1997.
“By trying to suppress this report, the prime minister has demonstrated that he cares more about the reputation of Labour than he does about the well-being of the armed forces,” Conservative defence spokesperson Liam Fox said in a
Pic: 3rd Scots royal Rgt of Scotland Helman in Afgan – July 09