Commons Defence Committee: Defence Equipment 2008

On 11th March the House of Commons Defence Commitee published its latest report into defence equipment and expenditure. This year's was particulalrly significant as it came after the first year of operation of Defence Equipment and Support (DE&S), the organisation set up through the merger of the Defence Procurement Agency and the Defence Logistics Organisation in April 2007. The new agency employs about 29,000 staff and has a budget of £16 billion (43% of the total UK defence budget). The merger was intended to provide an integrated equipment and support organisation, to improve the through life management planning of equipment, to
to deliver defence capability more quickly through its Defence Acquisition Change Programme and to streamline the organisation with a staff reduction of by 27% by 2012.

Some findings from the Committee's report:

• Although the re-organisation itself had gone to plan, the DE&S failed to keep to programme on seven of its largest equipment projects where slippage during 2007/08 totalled 6.5 years.
• The Committee was concerned that the MoD considers that it has no control over time slippage on international equipment programmes. The MoD needs to identify why this is the case and what steps it can take to improve its control.
• As at the end of March 2007, the Astute submarine, Type 45 destroyer and Nimrod MRA4aircraft programmes were together forecast to cost some £2.9 billion more than the Approved Cost. The combined in-service date slippage for these three programmes was 166 months—almost 14 years.
• The Nimrod MRA4 programme has experienced further cost growth of some £100 million in 2007-08, bringing the total forecast cost growth on this programme to £787 million or 28% of the Approved Cost. The programme has also experienced further slippage in 2007- 08 which now totals 92 months, some 7.5 years. The MoD should consider scrapping the Nimrod MRA4 programme as it may well not deliver the capability required in the timescale required.
• A400M transport aircraft programme slipped a further 9 months in 2007/08 and will now be two years late in service.
• As the FRES Utility Vehicle will be a "developmental vehicle" to a bespoke design, there are concerns over costs; also of cocern was that an in-service date has not yet been determined.
• The unexplained delay in signing the manufacture contract for the two Future Carriers has had a negative effect on the programme schedule and will impact in-service dates. MPs asked the MoD to define the roles of the carriers.
• There was "surprise" that the MoD doesn't yet know how many Joint Strike Fighter aircraft will be ordered and "disappointment" that they will not be available when the first new carrier is due to come into service (2014).
• The MoD needs to take the difficult decisions which will lead to a realistic and affordable Equipment Programme. This may well mean cutting whole equipment programmes, rather than just delaying orders or making cuts to the number of platforms ordered across a range of equipment programmes. A realistic Equipment Programme will give confidence to our Armed Forces that the equipment programmes that remain will be delivered in the numbers and to the timescale required, and will also allow industry to make informed investment decisions.
• One of the interesting inferences from the report is that the quality and skills of procurement personnel, especially project management skills, need to be developed to ensure that the new control and management mechanisms will be effective

Link> Commons Defence Committee: Defence Equipment 2008 report
Link> MoD Statement on the report