HMS Bangor at sea. A cancelled contract to bring the damaged minehunter home from Bahrain aboard a heavy-lift ship cost taxpayers £5m. (Ministry of Defence, via Wikimedia Commons)

MoD Wasted More Than £25 Million of Taxpayer Money in a Year, FOI Figures Show

The Ministry of Defence wasted more than £25 million of taxpayers' money over the past year on cancelled contracts, accounting errors and equipment that never reached Britain, according to figures obtained under freedom of information laws.

The data, gathered by the Scottish National Party and first reported by The Times on Thursday, lays bare the scale of what the department classes as "fruitless" payments. That is official terminology for spending "where the department receives nothing useful in return and should not have incurred the liability, or could have taken appropriate action to avoid incurring the liability".

The key facts

• The MoD lost more than £25 million to fruitless payments in the past 12 months.
• That is more than double the £11 million yearly average recorded between 2020 and 2024. Just £9 million was lost in total between 2016 and 2019.
• £5 million went on a scrapped plan to bring the damaged warship HMS Bangor home from Bahrain aboard a heavy-lift vessel.
• More than £2 million was paid in fines and interest to HMRC after tax and National Insurance blunders, while recoverable VAT claims worth hundreds of thousands of pounds were never submitted.
• £1 million was spent on equipment bought from an overseas supplier that was seized by foreign authorities before it could be delivered to the UK.

The biggest losses, item by item

The single largest item was £5.4 million in "in-service support costs" for an undisclosed MoD asset after the capability was discontinued. The department has not named the asset.

Another £4.4 million was paid to a contractor because "the unavailability" of government equipment and facilities delayed Submarine Delivery Agency training activities. That payment has since been identified as linked to the Dreadnought nuclear submarine programme. Defence Readiness Minister Luke Pollard confirmed in a written parliamentary answer on 23 September that "the loss relates to the Dreadnought programme and covers payment for unproductive hours incurred by the contractor". A separate Dreadnought supply-chain contract was terminated after security reviews at a further loss of nearly £1.7 million, with details withheld as unsuitable for disclosure.

Elsewhere in the figures, more than £100,000 was spent on hotel accommodation for a conference that defence staff did not attend. Tax and accounting errors included late or unpaid tax and National Insurance contributions and incorrectly categorised invoices.

The case of HMS Bangor

One of the clearest examples of wasted money involves the Royal Navy minehunter HMS Bangor. The ship had to be brought back to Britain from Bahrain after a collision with HMS Chiddingfold in January 2024. The initial plan was to transport the badly damaged warship aboard a heavy-lift vessel, but that contract was cancelled "for operational reasons" at a cost of £5 million.

An MoD source told The Times the original costs of the ship's return "could not be avoided due to the declining security situation in the region, when all military activity was paused based on the threat assessment at the time". HMS Bangor is now back at sea after more than 900 days of repairs.

Reaction

Dave Doogan, the SNP's Westminster leader, said the armed forces "have been hollowed out all the while Whitehall is throwing taxpayer money up the wall". He added: "Over £25m of our money has been blasted on payments that have delivered absolutely nothing. This is very serious and requires proper explanation."

Doogan said the figures were exposed "at a time when Andy Burnham is set to inflict further tax hikes on already hard-pressed household budgets" and called on the government to "get a grip on out-of-control Westminster waste".

The Ministry of Defence said: "We are delivering the largest sustained increase in defence spending since the end of the Cold War, investing £298bn over the next four years. These figures represent a very small proportion of the defence budget. However, we are clear that every pound of taxpayers' money must be spent wisely to deliver the maximum possible impact for our armed forces."

A department under pressure to save

The revelations come as defence chiefs are being forced into drastic cost-saving measures. The Times revealed in September that the Army was suddenly ordered to stop major training exercises involving tanks and helicopters to save at least £30 million.

Wes Streeting, who was appointed defence secretary in July, had vowed to ensure "every penny is spent wisely" by the MoD, borrowing the mantra he used as health secretary about "maximising value for money and cutting waste". The figures will test that promise, with the wasted £25 million sitting uncomfortably alongside a department that is simultaneously pleading for efficiency.

The context is a defence establishment in the middle of a major transformation. The government has committed to spending £298 billion over four years and pledged that the Army will deliver a tenfold increase in battlefield lethality over the next decade. The Strategic Defence Review also put NATO commitments first, reshaping where British forces train and operate. Against that backdrop, ministers argue the waste figures are a small fraction of the budget. The SNP's position is that they show a department still not in control of its own finances.

What is known, and what is not

What is known: the MoD recorded more than £25 million in fruitless payments over the past year, the itemised breakdown above comes from the department's own FOI responses, and the £4.4 million submarine-related loss has been independently confirmed in Hansard as Dreadnought-linked.

What is not known: the identity of the asset behind the £5.4 million support-cost loss, and what disciplinary action, if any, has been taken over any of the payments. The MoD has not said whether the figures have triggered any internal investigation.

What happens next

The figures are likely to face scrutiny in Parliament, where the SNP will press for an explanation and the government's defence team will have to reconcile the waste with its pledge to spend every pound wisely. With the autumn Budget due on 28 October, ministers will be aware that stories of squandered millions sit badly with a Treasury asking the public to tighten belts.

For the armed forces themselves, the more immediate question is whether the savings squeeze continues. The September order halting major Army exercises saved £30 million. If further waste on this scale cannot be squeezed out of the books, the next cuts may bite deeper into training and readiness.

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Sources

• The Times, "MoD wastes £25m on lost gear, cancelled contracts and tax penalties" (1 Oct 2026)
• Naval Technology, "UK admits millions wasted on Dreadnought SSBN 'fruitless' payments", citing Hansard written answer by Luke Pollard (23 Sep 2026)
• Ministry of Defence FOI responses, as reported by The Times