We were delighted to welcome the former Secretary of State for Defence, the Rt. Hon. Liam Fox MP. He was able to draw on his experience to consider whether the UK gains operational advantage from having all of its defence manufacturing on shore. The main points arising were:
He drew attention to the lack of any apparent cost control process at MOD, when he entered office. He instituted a Major Projects Board to manage both progress and costs of the MOD’s major projects. He estimated that in 2010 the 10 biggest projects accounted for 90% of the equipment budget.
He considered that any Secretary of State has to balance the questions of cost control, operational utility and the domestic economy (the Prosperity agenda) when assessing what equipment to buy.
Concerning the acquisition of platforms, such as ships and other systems, the real value lies in the systems and sensors to be used for missions, that provides operational utility. This also enables the UK to retain the Intellectual Property Rights (I P) throughout the lifetime of that particular system.
A key element to ensure proper cost control is the avoidance of ‘re spec-ing’, where a project is re-evaluated with additional attributes, causing delay and costs.
He considered that it was unlikely, given budgetary constraints, that the UK could ever buy all of its equipment needs on shore. Defence Secretaries need to be able to assess what the UK really needed, plus what could usefully be shared with allies.
Following the Covid 19 pandemic, he felt that the matter of supply chains across a range of activities would be re-assessed. It is likely that increased stocks of spares & supplies would be needed for the foreseeable future.
An important matter to consider was the nature of the threat. The advent of Hybrid – Grey zone conflict means that the enemy is becoming invisible. In which case numbers of platforms becomes less of a consideration, so much as the ability to operate in a conflicted environment, particularly where access to space-based communications, or in the face of a sizable cyber-attack. In this instance, a low-cost platform (such as an OPV) equipped with good sensors can perform the same task as a high spec frigate.
Working with partners entails risks if political priorities diverge, but the benefit is increased inter-operability if joint operations are undertaken (e.g. NATO allies).
There is a strong case for the professionalisation of the procurement cadre – with wider education in the economic arena. The present system means that too many people are re-learning lessons during the lifetime of a project. The risk is that the contractors manage the MOD, rather than the other way around.
Technology transfer within the UK is a good way to re-coup investment costs & retain I P. This is especially the case where IT applications are concerned e.g. Artificial Intelligence etc.
The UOR process used during the Iraq campaign (and other campaigns) showed what the acquisition system can achieve, given the will & the necessary political impetus.
APPG for Sovereign Defence Manufacturing Capability 