Select committee: Scottish Affairs Committee
Conclusion 4
First Report - Defence in Scotland: military landscape
Published 24 Jun 2022
Paragraph 32
Addressed to Scotland Office
Scottish Affairs Committee Defence in Scotland All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
We welcome the MOD’s high level of spending with Scottish industry (around 10% of total spending with industry) but are concerned that this spending is very heavily skewed towards major international prime contractors rather than SMEs. This is illustrated by the fact that only 2.5% of the MOD’s spending with UK SMEs goes to Scottish businesses. While this figure is higher than the MOD’s spending with SMEs in the North West of England, Wales and Northern Ireland, it is far lower than both the UK average and Scotland’s population share of the UK. Scottish SMEs have the skills and ambition to match any other part of the UK yet are losing out. While the MOD’s SME Action Plan is timely and relevant, it is unlikely to tackle engrained hesitancy within the defence sector towards working with Scottish SMEs.
From: Scottish Affairs Committee, First Report - Defence in Scotland: military landscape (HC 82), paragraph 32, 24 June 2022
Government response
The government responded to the whole report on 26 September 2022.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government welcomes the Committee's recognition of defence investment in Scotland, rejects the claim of 'engrained hesitancy' towards Scottish SMEs, and mostly notes or commits to continue existing work on the other recommendations.
- On SMEs, the MOD says it "reject[s]" the view that there is an "engrained hesitancy" in the defence sector towards Scottish SMEs. It notes the recommendation to reach 8% of SME spending in Scotland, and points instead to its UK-wide target that 25% of procurement spend goes directly and indirectly to SMEs by the end of 2022.
- On warship procurement, it says the build location of specific vessels "cannot be guaranteed" and that each class of ship will be determined "on a case-by-case basis".
- On local authority collaboration, it notes the recommendations and says it will continue to work with local authorities. It states that "Local economic assessments are not routinely conducted", and is committed to formal partnership arrangements "where appropriate".
- On the recommendations to the Scottish Government about funding and income tax, it says the matters sit outside the MOD's remit and that officials have been asked to share them with Scottish Government counterparts.