The Public Accounts Committee published its report into the Ministry of Defence equipment plan 2013-23 and major projects report 2013 on Tuesday, and found that despite improvements to cost control, the MoD still needs to monitor its skills gap in some critical functions.
The Rt Hon Margaret Hodge MP, chair of the Committee of Public Accounts, said: "The Ministry of Defence has made some progress this year in controlling costs on its major projects and managing the way it procures equipment. However, we still have concerns over whether the MoD's Equipment Plan is affordable."
The report was originally started to investigate underspending in the Ministry of Defence's budget. It underspent on its Equipment Plan by £1.2 billion in 2012-13, but does not know the reasons for the underspend, and therefore cannot be certain that it is not storing up costs for future years.
The report recommended that if the budget is handled better, the skills shortage problem could be resolved.
"The MoD urgently needs to address the shortage of skills across its critical functions. It told us that it needed to be able to pay more to attract and retain people with specialist skills. At the moment it is spending £400 million a year on technical support from consultants.
"Treasury and Cabinet Office should look across Government at skills shortages and go for solutions that do not require bureaucratic reorganisations as the only route to enabling Departments to recruit skilled people at market rates. For its part, the Ministry needs to get a grip on understanding costs and risks across the piece."
In November 2013, the MoD announced plans to recruit hundreds of cyber and IT specialists to help with national security and UK military capabilities.
Defence secretary Philip Hammond said the MoD will "recruit hundreds of computer experts as cyber reservists to help defend the UK's national security" who will protect cyber networks and sensitive data.
Hammond said: "The cyber reserves will be an essential part of ensuring we defend our national security in cyberspace. This is an exciting opportunity for internet experts in industry to put their skills to good use for the nation, protecting our vital computer systems and capabilities."
In January, a failed IT system cost the Ministry of Defence millions of pounds. The Recruitment Partnering Project - a £1.3bn service designed to allow up to 1,000 soldiers to return to frontline duty - fell over two years nehind schedule and would cost the MoD £1m a month until the failure is fixed.
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