The UK Ministry of Defence (MoD) has reiterated its opposition to an April report by the Public Account Committee which said that the department’s procurement system was “broken”, stating the claims by the PAC were “unsubstantiated”.
Released on 19 April, the PAC report into whether the UK could afford its military equipment plan said that “optimism bias” was affecting the MoD’s budget planning and that financial risks had been “ignored”.
In addition, the MoD, according to the PAC, had failed to adapt the 10-year rolling Equipment Plan and lacked the urgency required to develop and deliver the capabilities required by the UK military. Land forces were particularly badly hit, with the domain needing to “catch up” to fulfill Nato commitments.
The PAC report “expressed series doubts” about whether the MoD Equipment Plan was affordable, or agile and responsive enough to react to a changing threat environment brought about by Russia’s invasion of Ukraine. There was a “significant risk” that the UK could not provide Nato with an operational Army division, with programmes such as the Ajax armoured vehicle and Morpheus communications system “beset by problems and delays”.
In breaking down the financial plans of the MoD’s procurement, the PAC was unsure whether the £2.1bn increase in costs predicted accurately reflected inflation and outlined a forecast deficit of £2.6bn in the first seven years of the Equipment Plan. The MoD’s would offset this deficit with a budget surplus of £5.2bn in the Equipment Plan’s final three years.
“The [Equipment] Plan’s affordability also assumes a reduction in project costs by £30.4bn during the next ten years. This depends on the MoD achieving all planned efficiencies and savings, though there are not yet plans for £1.6bn cost reductions and £3.4bn efficiency savings, of which it needs over £2bn in the next three years,” the PAC report read.
Sir Geoffrey Clifton-Brown, Deputy Chair of the Public Accounts Committee, said that each year the MoD saw “multi-billion-pound procurement problems”, with equipment arriving years late and over-budget.
“There needs to be meaningful change of this broken system. The department needs to break from this cycle of costly delay and failure and deliver a fundamental, root and branch reform of defence procurement,” said Clifton-Brown, at the release of the report last month.
In response to a UK parliamentary written question, James Cartlidge, Minister for Defence Procurement at the MoD, said on 19 May the MoD “does not recognize the claims of a broken procurement system” and that the majority of programmes were delivered on or ahead of time and budget.
“The Public Account Committee’s claim that the Equipment Plan does not align with the lessons learnt from the Ukraine conflict is unsubstantiated. The events in Ukraine have largely confirmed our 2019 warfighting analysis that underpins in the Equipment Plan and Defence and Security Industrial Strategy,” Cartlidge said.
UK defence procurement difficulties
Defence procurement in the UK has long-been the subject of scrutiny, with innumerable programmes across all domains over the decades running over budget, late, or cancelled while part way through the deliver phase.
The British Army has been particularly badly affected, with key land programmes either failing to deliver at all, or else pushing the timeline persistently to the right, forcing an ageing equipment fleet to persist long past its expected out-of-service date.
The Warrior Capability Sustainment Programme (WCSP), cancelled in 2021 with hundreds of millions of pounds already invested, was set to deliver an significant upgrade to the existing Warrior armoured fighting vehicle (AFV) fleet, including a new turret and main gun system. The upgrade would see the fleet retained in service until 2040.
A 2020 report by KPMG, commissioned by Lockheed Martin, the defence prime responsible for the WCSP, stated that a production Warrior contract would have added up to £1bn to the UK economy. Around 80% of the WCSP solution was sourced from British suppliers.
The KPMG report added that a contract for the production of 275 vehicles between 2021 and 2029 would have delivered 100 annual Full-Time Equivalent (FTE) jobs and up to 2,000 annual FTE jobs through the supply chain and direct employment at the peak of production.
KPMG also found that a production contract could have generated £278.9m in direct Gross Value Added (GVA), £484.3m in indirect GVA from the supply chain and £280.4m in GVA created through Lockheed Martin employees spending Warrior CSP-related wages.
Instead, the Warrior will be retained until its OSD of 2025, when it will begin to be replaced by the Boxer armoured personnel carrier. The wheeled Boxer vehicle, being produced by RBSL in the UK, offers a range of potential modular weapon solutions, although the UK has yet to commit beyond the standard armoured personnel carrier variant.
Elsewhere, the Ajax AFV programme has also suffered significant delays to its introduction into service, with the test and trials phase halted for a second time in 2021 due to aural injuries and severe vibrations sustained by crews, which required medical attention.
In early 2023 the programme finally completed its User Validation Trials to move towards the Reliability Growth Trials. Personnel operating Ajax in Reliability Growth Trials used a ‘dual layer’ headset, comprising of the in service Crewguard Mk2 outer headset and Communications Ear Piece inner headset.
In March 2023 the initial operating capability for Ajax was stated as being between July and December 2025, with full operating capability being delivered between October 2028 and September 2029.