I believe the quote you seek is "the MoD is a metropolis of waste". It's been reported a number of times - Max Hastings likes using it.
To my knowledge he doesn't say the MoD is a waste of money, only that they waste money.
In saying this he is, of course, absolutely right. What this simple truth doesn't convey however, is the sheer scale of the waste. The difference now is that he is PM, and supposedly has the muscle to do something about it. He should start by sacking those who knowingly waste money and who lend support to those who order waste. It would also be nice if were to retrospectively strike from the record the disciplinary action taken against those who (a) reported waste, and (b) disobeyed orders to knowingly waste money. But I guess that's asking too much.