MoD denies funds shortage

The Ministry of Defence said this week that it is not suffering a shortage of funds in the 1990-2000 and 2000-2001 financial years, and described suggestions that it has a £500m shortfall over this period as `speculation’.

The MoD denied that its revised programme to buy or lease four large transport aircraft is in trouble. A decision on this will be made `in the early part of this year’, the ministry said.

Another big procurement decision that will be going ahead as planned is the acquisition of new long-range air-to-air missiles for Eurofighter. Bidders are the European Meteor missile consortium, which includes BAE Systems, against a rival bid led by US defence firm Raytheon.

The MoD restated that under the 1998 Strategic Defence Review it is committed to building two aircraft carriers and 12 destroyers. But it is understood that the MoD may seek to defer some spending from 1999-2000 into the next fiscal year.