LONDON - The 'black hole' in Britain's defence equipment budget grew significantly in the final year of prime minister Gordon Brown's administration, the watchdog on government spending said Friday.

Brown's Labour government went 3.3 billion pounds (S$6.9 billion) over budget during the year ending March 2010, the National Audit Office (NAO) said.

Defence Secretary Liam Fox said the cost over-runs were 'the direct result of the incompetence of ministers' in Brown's government, which left office after the May general election. The NAO blamed a failure to set 'realistic' budgets, resulting in a 'mismatch' between the Ministry of Defence (MoD)'s planned expenditure and its forecast funding.

The new Conservative-Liberal coalition government's Strategic Defence and Security Review due out next week is expected to usher in a major reconfiguration of Britain's military capability and funding.

The new government says there is an overall 38-billion-pound 'black hole' in the MoD budget over the next 10 years - the gap between MoD funds and spending commitments - forcing them to seek significant cuts.

The increase reported by the NAO was put down to cost surges in two procurement programmes: Typhoon fighter jets, up 2.7 billion pounds; and two planned new aircraft carriers, up 650 million pounds. The long-term cost 'represents poor value for money for the taxpayer,' the NAO said.

UK defence 'black hole' widens