UK defence procurement system 'broken', cross-party committee of MPs finds
The Defence Committee has published a new, highly critical report on UK defence procurement, urging the Ministry of Defence (MOD) to "act now" in fixing it.
The report, titled 'It is broke – and it’s time to fix it', was based upon a six-month enquiry into Defence Equipment and Support (DE&S) and led by the Sub-Committee Chair Mark Francois.
Mr Francois said the report found the MOD's "approach to procurement is well and truly broken".
'Urgently needs to change'
The Conservative MP added: "Bureaucratic, siloed and slow-moving – this is a dysfunctional system that has left multiple programmes floundering in its wake. This urgently needs to change.
"Bureaucratic buck-passing and the shirking of responsibility has meant that there is all too often no-one to hold personally accountable when highly expensive programmes fail."
Mr Francois added: "Today's report outlines how to align accountability with responsibility, to prevent this in the future.
"Worst of all, this dysfunction has put Armed Forces personnel in harm's way, with some troops suffering permanent injuries."
'We need to act now'
The Ajax trials are a black mark on the record of the MOD.
Concerns around safety should not be swept under the rug, and the Defence Committe is calling for the Army's Safety System to be completely reviewed.
"Russia's invasion of Ukraine has made the world a more dangerous place: this is now a matter of urgency," said Mr Francois.
He added: "This report offers a roadmap for reform – including 22 practical recommendations for the Ministry of Defence to take forward. We need to act now."
It found the UK's defence procurement system is "broken", with "multiple, successive reviews" not yet fixing it.
The sub-committee said it found "a UK procurement system which is highly bureaucratic, overly stratified, far too ponderous, with an inconsistent approach to safety, very poor accountability and a culture which appears institutionally averse to individual responsibility".
As a result, it said the UK had been left with "an extremely limited reserve of fighting equipment, including warships, modern armoured vehicles or combat aircraft" – despite Russia's invasion of Ukraine.
MOD need to stop rewarding failure
The report called on the MOD to stop rewarding failure and be more robust with contractors when, and if, programmes get into serious difficulty.
This is consistent with a reluctance, throughout the procurement system, to cancel failing programmes and the report called on officials and MPs to stop with an "optimism bias" and cancel obviously failing programmes.
It also called on the MOD to learn from Israel, particularly as best practice, with the country employing 300 staff in the procurement department as opposed to the 11,500 staff currently working at DE&S.
Prolonged timelines and no urgency
The Defence Committee said the programmes are often delayed or "slipped to the right" so the costs can be spread out due to the funding cycle or a lack of a fixed long-term budget.
Also, the report called on the MOD to make greater use of the Urgent Capability Requirements (UCR) method – ultimately reviewing the barriers in standard processes that could be removed from all defence procurements.
It also demanded "the obsession with annually" to change, urging the MOD to make use of funding flexibility by the HMS Treasury.
Stressed was that the Treasury has "grown weary" due to multiple, costly, high-profile procurement failures.
Accountability and responsibility
The report said the Chief Executive Officer of DE&S should be given a seat on the Defence Board, which is chaired by the Defence Secretary.
It also said the CEO should be made the Accounting Officer to Parliament on all equipment and support matters, rather than the Permanent Under-Secretary, as at present.
The Sub-Committee said its reasoning was that Senior Responsible Owners (SROs) are critical to the success of a procurement programme.
But, in its inquiry, it found high turnover, frequent multiple hatting and tension between SROs and DE&S can have a negative impact.
Furthermore calling for SROs to have more power, including the ability to go directly to Ministers and the CEO of DE&S if a programme is going wrong.
Case Studies
The report used the Type-26 Frigate, E-7 Wedgetail and the Ajax Fighting Vehicle, for the Navy, RAF and Army respectively, as examples of highly troubled programmes.
It said each case study highlights the negative results of serious delays to the projects, each with billions of pounds.
After personnel were left with permanent injuries from the trial of the Ajax vehicle, the report stated the Army's safety system needs a rigorous overhaul.
In response to the Defence Committee's report, an MOD spokesperson said: "Defence procurement is not broken.
"There is no evidence to suggest poor oversight on the Type 26 programme, and through decisions on E-7 we have made savings of £720m.
"We are delivering next-generation capabilities on programmes across the defence portfolio, including Ajax which is now delivering vehicles for the British Army.
"With an uplift of £5bn over the next two years to improve readiness and resilience, we continue to ensure we deliver world-leading equipment and provide our people with the capabilities our Armed Forces need."
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