Nick Smith

Working for you in Blaenau Gwent

Blog: A Coherent Strategy for Defence Procurement

Since being elected to parliament I have been lucky enough to be elected to the Public Accounts Committee, responsible for overseeing government spending and identifying poor value for taxpayer’s money. Defence procurement is an area that regularly fails to achieve value for money, and today we saw a dire example of this in the case of armoured vehicles.

‘Armoured vehicles’ is a term that includes a range of military platforms, from tanks to engineering vehicles, and reconnaissance vehicles to personnel carriers. They provide protection for our brave service men and women on duty from a variety of threats, and can at times provide a platform for mounting weapons and other military systems. All in all, armoured vehicles are a critical asset to our forces when they are engaged in humanitarian, peace keeping or combat operations.

 

The Ministry of Defence, over a number of years, has:

 

  • Demanded over complex capabilities from its armoured vehicles
  • Seen postponing armoured vehicle contracts as an easy way to save money in the short-term
  • And, failed to strike a balance between capabilities, our sovereign capacity to make these vehicles in the future, and value for money.

 

Too often the government has failed to compromise on the capabilities it demands from armoured vehicles when commissioning private sector contracts. This ‘gold-plating’ often leads to delays in delivery, increases costs and increases the risk of vehicles failing to do what they are designed for. In the future the Ministry of Defence would be better off demanding less sophisticated technology on their armoured vehicles. This would allow more firms to compete for the contracts, and so drive down the price, it would allow the vehicles to be built and dispatched out into the field quicker, so providing better protection for our brave troops, and reduce the risk of technical failure on combat operations.

 

The MoD spent over £30 billion on major equipment projects last year, many of which required long complex agreements with industry to produce. Armoured vehicles are easier to produce than aircraft carriers, and require shorter, less expensive, and less complex agreements than larger equipment contracts. This has meant that the government has too often seen postponing armoured vehicle contracts as an easy way to achieve short-term savings in the equipment budget. These postponements have led to spiralling costs and eventual cancellations, in fact since the 1998 Strategic Defence and Security Review £321 million has been spent on armoured vehicle programmes that will no longer deliver a single vehicle.

 

These delays have led to a shortfall in the equipment our service men and women need to carry out their dangerous missions overseas, so the government has had to fall back on Urgent Operational Requirements, spending £2.8 billion on off-the-shelf equipment for specific operations. The nature of the equipment means that it is often designed for a specific need and so unable to be used for a range of tasks in the future. This shortfall has left our soldiers underequipped. The army will be without the vehicles deemed top priorities by the recent Defence Review until 2024-25.

 

The government has a larger problem in its procurement strategy. It faces difficult decision as to whether to buy proven and readily available equipment off-the-shelf or tailor-made equipment specifically designed for the challenges we face. These new equipment contracts sustain skilled manufacturing jobs around the country, provide millions of pounds for SMEs subcontracted to make parts or carry out work in the development of these projects, and protects vital skills we may need in the future. The sovereign capacity argument is a compelling one. If government does not continue to purchase complex military equipment from British firms, they will let the highly skilled workers who make this equipment go, they will find other jobs, and the country will lose the ability to make these products forever.

 

Labour’s recent report on defence procurement sets out a coherent strategy for purchasing this expensive equipment. We should aim to sustain British skills and industry purchasing through tailor-made equipment, that will give us the capacity to face the challenges we expect in the future, but we must avoid ‘gold-plating’ equipment so that it is cheaper, more reliable and arrives on time. It is better to have a vehicle that has 80 per cent of the capacity but is available on the ground, than one designed with extra bells and whistles that never hits the tarmac. Too often in this area the best is the enemy of the good.

 

In future the MoD needs to consider more carefully the role it requires our armoured vehicles to carry out. We want our armed forces to have the latest, most advanced equipment, but must not get carried away with unnecessary features that slow down or halt production and leave our service men and women in harm’s way.

 

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