3 During the financial year 2010-11, forecast costs for completing the 15 largest post-main-gate projects rose by £466 million (0.9 per cent). The forecast cost to complete these projects is now £6.1 billion (11.4 per cent) over the estimate of expected cost, from when the main investment decision was made. Macro-economic factors, such as adverse foreign exchange rates, accounted for £176 million of the in-year cost growth. Cost overruns from project-specific technical issues continued to decline, although they did account for £53 million of the increase. For the third successive year, central planning decisions taken by the Department had a significant impact, accounting for £237 million of the increase. Of this, £124 million resulted from decisions to delay spending on projects, and £113 million to enhance equipment capabilities. If the latter is excluded from the analysis, the total forecast cost increase reported in-year was £353 million (0.7 per cent).
4 During 2010-11, there was a total increase of 30 months (average two months per project) in the projected time to complete the 15 post-main-gate projects and bring them into service. The most significant changes were a 12-month delay in the timetable for the Watchkeeper unmanned aerial vehicle project, which was largely due to the contractor failing to deliver against the agreed schedule. There was also a 13-month deferral on the Astute Class submarine programme (paragraph 11).
5 When the Department approves defence projects it uses a number of key performance measures, which specify and subsequently monitor how equipment should perform. It also measures eight capability components, including personnel, training, and logistic support, which are necessary for equipment to be effective. In-year, neither the key performance measures nor the wider capability indicators showed any significant changes.