This gave the financial markets plenty of time to line up and get the men from the ministry in their sights. Sure enough, the very day that the MoD went out to raise the bank finance, lending rates went up.Worse was to come. It was only after the contract had been signed that the MoD discovered the refurbished building would not be big enough to accommodate an extra 500 staff who then had to be billeted elsewhere. Perhaps a full survey would have helped but then the MoD was only spending £750m on a new HQ, not buying a new house.Having watched the cost of the project escalate by some 15 per cent, the MoD then engaged in a frantic effort to beat its chosen contractor down on price, refusing to sign off the deal under the cost was fractionally below that of funding it through the public sector. The saving, calculated by the MoD at £100,000 or 0.015 per cent, is, as the Public Accounts Committee now diplomatically puts it, spurious at best.The most remarkable thing about this ill-fated project is that it does not appear to have done the private sector contractor many favour either.

Amey, which was part of the consortium selected by the MoD, has just sold its equity stake in the project for a fifth of its estimated value. The only winners, as usual, appear to have been the banks.It would be nice to think the MoD is better at letting contracts when it comes to its front-line forces. Alas, the £10bn aircraft carrier procurement deal, due to be announced today, looks like being the mother of all compromises. A French design built in British yards with the prime contractorship split between two rival bidders Oh dear. One for the PAC to get its teeth into a few years down the line.Audit shake-upPatricia Hewitt has rightly resisted the temptation to introduce a corporate equivalent of the Dangerous Dogs Act in response to the string of financial scandals that have swept in from across the Atlantic.The measures announced yesterday to tighten up on company auditing were predictably described as tough. But in truth the Trade and Industry Secretary has been a pussycat compared to the mauling the Sarbanes-Oxley law is inflicting on US companies.Britain's recent corporate scandals have been caused by incompetence and not mendacity and therefore a sense of proportion is appropriate.

Furthermore, when big companies only have four multi-national audit firms to chose from, the art of the possible becomes more important than what is strictly desirable.It therefore makes sense not to demand compulsory rotation of auditors. But it is also sensible to require lead audit partners to change every five years and prevent auditors from going on to work for their clients without a proper quarantine period.As for barring audit firms from undertaking non-audit work for the same clients, the best safeguard of their independence is to require maximum transparency. The creation of a single regulator and a new independent audit inspection unit are good housekeeping measures.There are already more than enough rules and regulations and boxes to be ticked without adding a new layer of bureaucracy or requiring directors to swear to the honesty of their accounts on pain of imprisonment.The trickiest bit of the Hewitt reforms to implement will the plan to give increased powers to company audit committees. The Higgs review already threatens to cause a run on decent non-execs and so finding the talent to staff these new committees will be far from easy.Generation gapOnce upon a time the future was orange Now it's black. 3, the self-conscious name by which Hutchison Whampoa is entering the third-generation mobile phone market, opened its doors yesterday to the world. The svelte, ebony- clad young men who will staff its flagship store on Oxford Street may appeal to the fashionistas who patrol the West End.