Yahoo Finance Company behind MoD’s delayed Ajax programme pays out £80m dividend
The contractor responsible for the beleaguered £5.5bn Ajax programme – which is yet to produce a usable armoured vehicle – paid its owner more than £80m last year, sparking fresh questions over taxpayer value.
Ajax has been delayed for 10 years and cost the taxpayer £5bn so far. MPs have previously called for the scheme to be scrapped while hundreds of soldiers had to be treated for exposure to high noise after working on trials.
The Ministry of Defence agreed a fixed-price contract with General Dynamics worth £5.5bn for 589 of the armoured vehicles, but so far just 26 have been delivered and these can only be used for training purposes.
The Public Accounts Committee of MPs said during the summer that the programme should be fixed or scrapped after delays caused by "a litany of failures".
The payment “seems remarkable when General Dynamics has currently failed in delivering Ajax for the British Army and its future still seems in doubt,” said Kevan Jones, a Labour MP and member of the Defence Committee.
The public should be able to scrutinise the contract made between the Government and General Dynamics, he added. The company should be made to explain how the dividend was being funded, “because if it's come from the failure of this contract, that's not good news for the taxpayer.”
General Dynamics UK paid its holding company General Dynamics Ltd the £80.5m dividend for 2021, according to a filing for the latter company at Companies House, a payment which was passed on to its owner General Dynamics Global Holdings.
General Dynamics UK has yet to release a statement on its performance for last year but it is expected to do so by the end of December. General Dynamics Ltd, the holding company, has not paid a dividend since 2016.
A spokesman for the company declined to comment.
Defence Minister Ben Wallace told the Defence Committee earlier this month that he received a daily report on the programme's progress and that the vehicle had completed the latest stage of its trials and that the next stage of testing would start as soon as next month.
He suggested that he would know soon whether the vibration and noise problems that made the armament unusable had been overcome.
Ajax is due to replace Scimitar, a smaller, lighter reconnaissance vehicle which entered service in 1971. It is the third attempt to replace Scimitar after 1992’s Tracer – the Tactical Reconnaissance Armoured Combat Equipment Requirement, which was cut after nine years. That was followed by the Future Rapid Effects System which was in turn cancelled in 2008.
