February 14, 2014 12:13 am

‘Cost cutter’ to supervise building of aircraft carriers

The aircraft carrier being built for the Royal Navy©Troy GB Images/Alamy

The first of the new aircraft carriers being built for the Royal Navy

The government has brought in Sir Peter Gershon, known as the “cost cutter in chief”, to oversee the building of Britain’s aircraft carriers after costs soared to almost double initial estimates

Sir Peter is best known for conducting a far-reaching review of Britain’s civil service for the Labour government in 2004, in which he recommended slashing costs by reorganising and automating departments. The current coalition has asked him to perform a similar – albeit more brief – exercise.

He will tackle one of the country’s largest and most bedevilled procurement projects as non-executive chairman of the Aircraft Carrier Alliance, a partnership between the Ministry of Defence and its biggest defence contractors on the project.

In November, after renegotiating its contract with the lead contractor BAE Systems, the MoD announced the cost of building its two carriers had risen another £800m, bringing it to £6.2bn – almost double the £3.5bn estimate when the previous government gave the project the go-ahead in 2007.

The National Audit Office said in its annual report on Thursday that the carriers had been delayed by another five months because of technical factors, bringing the total delay to almost two and a half years. In contrast, the MoD’s other 10 leading procurement projects last year saw a cost decrease of £46m, the report said.

Sir Peter is chairman of Tate & Lyle, the agribusiness, and in 2011 edged out Lord Browne, former chief executive of the energy group BP, to the chairmanship of National Grid, the electricity and natural gas network.

Ian Booth, Aircraft Carrier Alliance programme director, said the appointment was a “significant step” for the programme.

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