Royal Navy loses nearly half a BILLION pounds as staggering cost of retirement bill laid bare

Both were Albion-class Landing Platform Docks and served as flagships before they were removed from service in November 2024.

The decision on their decommissioning, part of Labour's £500million defence cuts, came despite the ships undergoing extensive and expensive refurbishment in Plymouth.

Former defence procurement minister Maria Eagle disclosed that £132.7million had been invested in refurbishing the two vessels from 2010 onwards.

This is understood not to include HMS Bulwark's refit programme, scheduled to run from 2022 to 2025, carrying an estimated price tag of £72.1million.

The timeline of the works meant that extensive funds were being ploughed into ships that were not intended to return to active service.

Now, the MoD accounts place the ships in the "constructive losses" section of its accounts, noting the daunting £428million loss in asset value.

This staggering figure is listed as a book value, meaning how much an individual asset is worth when appearing in a balance sheet.

A book value shows the initial cost of acquiring the asset, which is then adjusted over time depending on depreciation, amortisation, among other factors.

Looking ahead, the future of the ships appears to have been decided with the signing of an agreement with Brazil aboard HMS Mersey at the Defence & Security Equipment International conference in September.

Brazil is understood to be paying just £20million for both ships, despite the MoD spending 10 times this on upkeep to the ships in the last 15 years.

The deal will see HMS Bulwark sold to the South American nation, where she will be renamed NDM Oiapoque once her refit is completed this year.

Reacting to the sale, Shadow Armed Forces Minister Mark Francois said: "A few years ago, the Commons Defence Committee described the idea of disposing of these two key amphibious ships as 'militarily illiterate'.

"Given how much the MoD has spent on refitting them in recent years, to suddenly flog them off at a knock-down price, is 'financially illiterate' as well," he fumed.

MoD accounts revealed further naval asset write-offs beyond the Albion-class vessels.

HMS Northumberland's retirement resulted in a £66.77million loss in asset value.

Two Royal Fleet Auxiliary tankers also contributed to the financial impact, with RFA Wave Knight and RFA Wave Ruler together accounting for approximately £58million in decommissioned asset value.

A Royal Navy spokesman addressed the retirements, stating: "Neither HMS Albion nor HMS Bulwark were due to go to sea ahead of their out-of-service dates in 2033 and 2034.

"Their disposal shows that we are delivering for defence by disinvesting ourselves of old capabilities to make way for the future," they added.

Defence Secretary John Healey defended the retirement decision in Parliament last year, stating that maintaining the vessels on paper alone incurred annual costs of £9million without any plans for their return to active duty.

He argued the decommissioning would generate substantial savings for taxpayers, projecting £150million in reduced expenditure over the following two years.

Looking further ahead, Mr Healey estimated the decision would save up to £500million over the next five years.

These projections formed part of the Government's rationale for disposing of the vessels despite the galling book value losses and recent refit investments.

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