King's College London

Each year since 2012, the Ministry of Defence (MoD) has published a Defence Equipment Plan (the Plan) which sets out how the MoD will deliver and support the equipment the UK Armed Forces require over the next 10 years. The equipment requirements  and budget spend of the MoD are based on its assessments of current and future threats, as set out in regular Strategic Defence and Security Reviews (SDSR). 

'Concerns about the pace of reform were raised by the trade union Prospect, which questioned the ability of DE&S to be “match fit” and deliver its transformation programme on time. The union claimed that DE&S continued to suffer from skills shortages, with “significant numbers of ongoing vacancies and little evidence of an improvement in the effectiveness of the recruitment processes”. Furthermore, its evidence pointed to the difficulties facing DE&S in being match fit at a time when headcount had been cut as part of overall reductions in the civil service.

Professor Andrew Dorman, of King’s College, London, raised concerns in his evidence. He warned that "the MoD was guilty of both making 'big assumption' about savings and being over-optimistic about the revenue that would be raised from the defence estate, not least because not all of the revenue generated would go to the MoD". Indeed, he noted that "the reduction in the defence estate would require moving 'a whole series of units' and that at present, the MoD did not have the cash to move the units”. He noted, “one of the big questions for the UK defence industry is, what is the next generation of equipment and is it going to sell, or is this the last generation of equipment?" To emphasise this point he noted that "the UK had not sold a new destroyer, frigate or submarine since the 1970s. Concerns about this heavy reliance on ‘efficiency savings’ were reiterated during the course of our inquiry.

Professor Matthew Uttley, Chair in Defence Studies at King’s College London, warned of the “risk of over-optimism” on the potential savings the MoD could make, noting that “history tells us that ‘efficiency savings’ are rarely met”. He argued in his evidence that the current defence industrial policy was predicated on, among other factors, “a particular view of value for money.” He suggested that there was “some mileage” in a broader conception of value for money that looked at the: Net economic and security benefits of different acquisition options in terms of where the pound goes, the economic and employment multipliers that are derived from investing in suitable onshore alternatives, fiscal revenues, strategic influence that can be derived from exporting national defence goods and so on”.

According to Professor Uttley, the biggest issue with the single source regulatory system was the “uneven application of the SSRO for significant areas of procurement that are conducted through single sourcing, and that is the foreign military sales”. He argued that the procurement of off-the-shelf equipment had a negative impact on the number of qualified scientists and engineers employed in the UK. In a similar vein, Defence Synergia warned that while increased levels of procurement from the USA may increase “commonality” and “inter-operability” with our key ally, it also had the effect of reducing UK expertise in industrial design, manufacturing and support.