Recommendations & Conclusions
27 items
2
Conclusion
Nineteenth Report - MoD Equipment Plan …
Acknowledged
The Plan is inconsistent because some parts of the Armed Forces include the costs of all capabilities that the government expects them to deliver, while others only include those they can afford. The MoD’s aim is that the Plan provides a reliable assessment of the affordability of its equipment programme …
Read more
The Plan is inconsistent because some parts of the Armed Forces include the costs of all capabilities that the government expects them to deliver, while others only include those they can afford. The MoD’s aim is that the Plan provides a reliable assessment of the affordability of its equipment programme and demonstrates to Parliament how it will manage its funding to deliver equipment projects. The MoD headquarters provides the Front Line Commands and other budget holders with guidance on preparing their cost forecasts. However, it allows the budget holders to take different approaches to whether they include in their forecast costs all the capabilities they need to meet government’s expectations, or just those capabilities that they can afford. This flexibility has created an inconsistency of approach, which means that users of the Plan cannot compare Commands and other budget holders on a like-for-like basis. For example, the Royal Navy has included in the Plan predicted costs for all the capabilities the MoD expects it to deliver, and it has reported a deficit of £15.3 billion. In contrast, the Army has reported a deficit of £1.2 billion in the Plan, because it only includes those projects it can afford. However, its deficit would increase by around £12 billion if it had included all the capabilities the government has requested. The MoD conceded that a Plan compiled on a consistent basis would clearly be easier to interpret. 1 The date of the general election will be determined by the government, but must happen no later than 28 January 2025 according to the Electoral Commission. 6 MoD Equipment Plan 2023–2033 Recommendation 2: In future Plans, the MoD should ensure that all budget holders adopt the same approach to including forecast costs. This will help the Plan to achieve its aim of providing a reliable assessment of the affordability of its equipment programme, and improve transparency so allowing the Plan’s users, including Parliament, to compare contribu
Show less
Government response AI summary
The government agrees with the recommendation and states that, for transparency and ease of comparison, the department will seek to standardise the data produced and presented for the Equipment Plan starting from the Annual Budgeting Cycle planning round process.
Read full response →
HM Treasury
3
Conclusion
Nineteenth Report - MoD Equipment Plan …
Rejected
The MoD’s prioritisation of the Defence Nuclear Enterprise carries a risk that this will further squeeze budgets for conventional capabilities. Maintaining the nuclear deterrent remains the MoD’s highest defence priority. This year’s Plan is the first time that the MoD has set out its nuclear budget separately from other defence …
Read more
The MoD’s prioritisation of the Defence Nuclear Enterprise carries a risk that this will further squeeze budgets for conventional capabilities. Maintaining the nuclear deterrent remains the MoD’s highest defence priority. This year’s Plan is the first time that the MoD has set out its nuclear budget separately from other defence spending, and it has sought to limit the long-term costs of its nuclear programmes by prioritising their quicker delivery over immediate cost constraints. The MoD said that its nuclear programmes are in a much healthier position than for many years and that the £7.9 billion deficit in the nuclear budget is manageable. To deliver these savings requires significant work and is a huge challenge. We are concerned that this will be difficult to deliver. The MoD has agreed a minimum budget with HM Treasury for its nuclear activities, and it said that it might ask HM Treasury for more money for nuclear programmes in future planning rounds. If additional money is not forthcoming, the MoD has the flexibility to redirect money from its budgets for conventional equipment to nuclear programmes. However, the current budget for conventional equipment is £9 billion less than forecast costs, and HM Treasury recognises that it will be difficult for the MoD to fund fully its nuclear requirements through the reprioritisation of conventional capabilities. Recommendation 3: The MoD should build upon the transparency it introduced in this year’s Plan regarding nuclear costs and budgets by reporting trends in nuclear funding and how these might affect budgets for conventional capabilities in future Plans.
Show less
Government response AI summary
The government rejected the recommendation, stating that hypothesizing about future funding shifts from conventional to nuclear budgets would be speculative and not useful for planning.
Read full response →
HM Treasury
4
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
Uncertainty about the MoD’s future demand for equipment hinders its work with industry to develop a resilient, responsive, and cost-effective supply chain. Key lessons from the war in Ukraine include the need for the Armed Forces to invest in weapon stockpiles and ensure resilience and agility in sustaining military capabilities. …
Read more
Uncertainty about the MoD’s future demand for equipment hinders its work with industry to develop a resilient, responsive, and cost-effective supply chain. Key lessons from the war in Ukraine include the need for the Armed Forces to invest in weapon stockpiles and ensure resilience and agility in sustaining military capabilities. The MoD has earmarked £5 billion during the decade to 2032–33 to do this, half of which is additional funding provided by the HM Treasury across 2023–24 and 2024–25. The MoD recognises that building capacity, including the industrial skills base, will take time, and that in order to invest industry must have the confidence that the level of demand will continue. The MoD has launched some initiatives to provide assurance regarding future demand, including an order with BAE Systems for 155mm artillery shells. It is also engaging with industry to discuss technical developments which are occurring at fast pace because of the war in Ukraine. However, the failure to provide budgets that match ambition, such as the £5.9 billion funding shortfall in the shipbuilding pipeline, risks undermining suppliers’ confidence to invest in their capacity. Recommendation 4: In order to build industry’s confidence to invest in supply chain capacity, the MoD should develop and communicate clear and funded schedules of work for the procurement and support of its military equipment. MoD Equipment Plan 2023–2033 7
Show less
Government response AI summary
The government agreed, stating it is already addressing the recommendation through the Integrated Procurement Model, Defence and Security Industrial Strategy, and other initiatives, including continuing to publish the Acquisition Pipeline twice yearly.
Read full response →
HM Treasury
5
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
The MoD’s strategy for replacing ageing capabilities is undermined by the slow delivery of new systems, resulting in military capability gaps. Despite the MoD working with prime contractors to better understand its supply chain, increased international demand for key components and skilled workers has contributed to the slow delivery of …
Read more
The MoD’s strategy for replacing ageing capabilities is undermined by the slow delivery of new systems, resulting in military capability gaps. Despite the MoD working with prime contractors to better understand its supply chain, increased international demand for key components and skilled workers has contributed to the slow delivery of defence equipment, including digital communications, armoured vehicles, and Royal Navy ships. For example, technical issues developing the state-of- the-art Type 26 frigate have contributed to delays, and the delivery of new warships for the Royal Navy is considerably slower than in other countries such as Japan. It has also been difficult for the defence industry to attract suitable candidates because the skilled people it requires, such as engineers, are in high demand globally. As a result, only two of the 46 MoD equipment programmes that are included in the Government Major Projects Portfolio (GMPP) are rated as being highly likely to be delivered to time, budget, and quality. Successful delivery appears to be unachievable for five GMPP programmes, including replacement communications technology, nuclear submarine reactors, and missiles. The MoD said that an emphasis on pace would be a key aspect of the new procurement strategy, which was subsequently announced in the House on 28 February 2024 as the new “Integrated Procurement Model” (IPM). In the meantime, the intensive use of existing equipment is creating a maintenance backlog that will take more time and money to address, leaving the UK’s Armed Forces having to make do with fewer pieces of ageing equipment. Recommendation 5: The MoD should include in next year’s Plan an assessment of what impact its new procurement strategy has had on improving the delivery of new capabilities and set out how this will provide continued improvement going forward.
Show less
Government response AI summary
The government agreed, outlining that the new Integrated Procurement Model's implementation begins in April 2024 and will continue through 2024-2025, with monitoring of delivery pace and appropriate updates.
Read full response →
HM Treasury
6
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
The MoD is becoming increasingly reliant on the UK’s allies to protect the UK’s national interests, which carries the risk that such support might not always be available. Recent international developments, including the war in Ukraine, have reinforced the importance of strategic international partnerships for the UK. The UK has …
Read more
The MoD is becoming increasingly reliant on the UK’s allies to protect the UK’s national interests, which carries the risk that such support might not always be available. Recent international developments, including the war in Ukraine, have reinforced the importance of strategic international partnerships for the UK. The UK has been working with its allies, including Ukraine, to develop interoperable equipment, pool essential munitions and encourage industry to build its capacity to supply the necessary equipment. However, for deterrence to be effective the UK’s Armed Forces must be credible. Such credibility is undermined by widely reported recruitment and retention issues, with more people leaving the Armed Forces than are being recruited, the mothballing of Royal Navy ships because of crew shortages, and the unavailability this year of the only Royal Navy ship able to fully replenish the UK’s aircraft carriers because of a refit. Given the changing global security picture, it is vital for the MoD to work with industry, including through the Defence Suppliers Forum, and also the higher education sector to ensure sufficient supply of highly skilled workers and also apprentices to the defence sector. With the support of its allies, the UK’s Armed Forces continue to fulfil a crucial role internationally. However, many allies are facing similar challenges to the UK, which might affect their ability and willingness to continue providing extensive support. Recommendation 6: The MoD should assess the extent to which its capability requirements are reliant on support from the UK’s allies and develop mitigations for how it would manage the risk of allied support being curtailed or withdrawn. 8 MoD Equipment Plan 2023–2033 1 The affordability of the Equipment Plan
Show less
Government response AI summary
The government agreed, stating that allied support is already understood, reviewed as part of capability planning, and rigorously scrutinized during force testing, with identified risks regularly captured and reviewed for mitigation.
Read full response →
HM Treasury
1
Conclusion
Nineteenth Report - MoD Equipment Plan …
Rejected
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Defence (the MoD) on the Equipment Plan 2023–2033 (the Plan).2
Government response AI summary
The government disagreed with an unspecified recommendation, which it interpreted as a request to set out a list of capabilities that would be cut if budget assumptions are not met, stating this would create operational security risks and undermine industry confidence.
Read full response →
HM Treasury
7
Conclusion
Nineteenth Report - MoD Equipment Plan …
Rejected
The MoD told us that if the government fulfils its commitment to spending 2.5% of Gross Domestic Product (GDP) each year on defence, the Plan could well be affordable.18 The current defence budget is 2.1% of GDP, which increases to 2.25% when the UK’s support for Ukraine is included. The …
Read more
The MoD told us that if the government fulfils its commitment to spending 2.5% of Gross Domestic Product (GDP) each year on defence, the Plan could well be affordable.18 The current defence budget is 2.1% of GDP, which increases to 2.25% when the UK’s support for Ukraine is included. The MoD said that the difference between 2.25% and 2.5% of GDP is about £6 billion or £7 billion.19 However, the government will only increase non- Ukraine defence spending to 2.5% of GDP if fiscal and economic circumstances allow, and there is no certainty when or whether this will occur.20
Show less
Government response AI summary
The government disagrees with the implied recommendation, stating the Prime Minister's commitment to 2.5% GDP by 2030 and explaining that it will not set out a list of potential capability cuts due to operational security risks.
Read full response →
HM Treasury
8
Recommendation
Nineteenth Report - MoD Equipment Plan …
Rejected
The MoD asserted that it was not a gamble to assume that its budget will increase to 2.5% of GDP.21 At present, however, the MoD has budget certainty only to the end of March 2025, which hinders its ability to plan with any degree of precision over 10 years.22 The …
Read more
The MoD asserted that it was not a gamble to assume that its budget will increase to 2.5% of GDP.21 At present, however, the MoD has budget certainty only to the end of March 2025, which hinders its ability to plan with any degree of precision over 10 years.22 The MoD said that it made sense for defence to have a multi-year settlement.23 From a military perspective, a five-year settlement would help the MoD provide long-term deterrence by allowing it to build the confidence the defence industry needs to invest in its capacity.24 The MoD also told us that if government’s ambition for defence spending was reduced to less than 2.5%, it would need to revise the level of capability it could buy to match the smaller budget.25 12 Q 12; Correspondence from MoD to PAC, 4 December 2023 13 Q 12; C&AG’s Report, para 1.8 14 Qq 12, 13 15 Q 62 16 Qq 13, 68, 69 17 Q 16 18 Qq 19, 20, 136–138 19 Q 99 20 Q 13; C&AG’s Report, para 2.25 21 Q 66 22 Qq 18, 19, 93 23 Qq 70, 71 24 Q 73 25 Q 67 10 MoD Equipment Plan 2023–2033 Inconsistencies in the Plan
Show less
Government response AI summary
The government explicitly disagreed with the committee's implied recommendation for more budget certainty, stating the Prime Minister's commitment to 2.5% GDP defence spending by 2030 and detailing existing commercial policy changes. It also stated it would not set out a list of capability cuts.
Read full response →
HM Treasury
9
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
The MoD’s aim is that the Plan provides a reliable assessment of the affordability of its equipment programme and demonstrates to Parliament how it will manage its funding to deliver equipment projects.26 The MoD’s headquarters provides the Front Line Commands and other budget holders with guidance on preparing their cost …
Read more
The MoD’s aim is that the Plan provides a reliable assessment of the affordability of its equipment programme and demonstrates to Parliament how it will manage its funding to deliver equipment projects.26 The MoD’s headquarters provides the Front Line Commands and other budget holders with guidance on preparing their cost forecasts. However, it allows the budget holders to take different approaches to whether they include in their forecast costs all the capabilities they need to meet government’s expectations, or just those capabilities that they can afford.27 For example, the Royal Navy has included in the Plan predicted costs for all the capabilities the MoD expects it to deliver, and it has reported a 10-year budget deficit of £15.3 billion. In contrast, the Army has reported a deficit of £1.2 billion because it only includes those projects it can afford: its deficit would increase by around £12 billion if it included all the capabilities it needs.28
Show less
Government response AI summary
The government agrees and will standardize the data production and presentation for the Equipment Plan from the Annual Budgeting Cycle planning round process to improve transparency and comparability, with a target implementation date of Spring 2025.
Read full response →
HM Treasury
10
Recommendation
Nineteenth Report - MoD Equipment Plan …
Accepted
This flexibility means that users of the Plan, including Parliament, cannot compare Commands and other budget holders on a like-for-like basis.29 The MoD assured us that its ability to understand the Armed Forces’ capability and operational risks was unaffected by budget holders using different approaches to costing.30 However, as the …
Read more
This flexibility means that users of the Plan, including Parliament, cannot compare Commands and other budget holders on a like-for-like basis.29 The MoD assured us that its ability to understand the Armed Forces’ capability and operational risks was unaffected by budget holders using different approaches to costing.30 However, as the Minister of State for Defence said in the House of Lords on 7 December 2023: “I have looked at budgets for the last 40 years and I have never seen a budget that resembles anything like this one, and that is not just the absolute figures. The way in which it is constructed means that it is very difficult to get to exactly the way in which the money moves around”.31 We are similarly puzzled about how the Plan can be allowed to contain such inconsistent approaches.32 The MoD conceded that this was not the most transparent part of its planning process, and that a Plan compiled on a consistent basis would clearly be easier to interpret.33 The MoD confirmed that it was happy to accept the NAO’s recommendation that the Plan should be prepared on a more consistent basis, and also conceded that the current approach made it difficult for us to hold the MoD to account.34 Funding the Defence Nuclear Enterprise
Show less
Government response AI summary
The government agrees with the recommendation and commits to standardizing the data produced and presented for the Equipment Plan from the Annual Budgeting Cycle planning round process, with a target implementation date of Spring 2025.
Read full response →
HM Treasury
11
Conclusion
Nineteenth Report - MoD Equipment Plan …
Rejected
Maintaining the nuclear deterrent remains the MoD’s highest defence priority. This year’s Plan is the first time that the MoD has set out its nuclear budget separately from other defence spending.35 The MoD has sought to de-risk and limit the long-term costs of its nuclear programmes by prioritising their quicker …
Read more
Maintaining the nuclear deterrent remains the MoD’s highest defence priority. This year’s Plan is the first time that the MoD has set out its nuclear budget separately from other defence spending.35 The MoD has sought to de-risk and limit the long-term costs of its nuclear programmes by prioritising their quicker delivery over immediate cost constraints.36
Show less
Government response AI summary
The government rejects the committee's observation regarding the nuclear budget, stating that speculating on future funding shifts from conventional to nuclear is unhelpful for planning, and nuclear funding is ringfenced.
Read full response →
HM Treasury
12
Conclusion
Nineteenth Report - MoD Equipment Plan …
Rejected
The MoD said that its nuclear programmes are in a much healthier position than for many years.37 The MoD has agreed a minimum 10-year budget with HM Treasury for its nuclear activities of £109.8 billion, and it said that the £7.9 billion deficit in the 26 C&AG’s Report, para 1.3 …
Read more
The MoD said that its nuclear programmes are in a much healthier position than for many years.37 The MoD has agreed a minimum 10-year budget with HM Treasury for its nuclear activities of £109.8 billion, and it said that the £7.9 billion deficit in the 26 C&AG’s Report, para 1.3 27 Qq 24, 25 28 Q 26; C&AG’s Report, para 1.12 29 C&AG’s Report, para 1.13 30 Qq 24, 25 31 House of Lords, Ministry of Defence: Equipment Plan, volume 834, 7 December 2023 32 Q 26 33 Qq 27, 65 34 Q 26 35 C&AG’s Report, paras 16, 2.16 36 Q 12; C&AG’s Report, para 2.17 37 Q 78 MoD Equipment Plan 2023–2033 11 nuclear budget compared to forecast costs was broadly manageable.38 However, the MoD acknowledged that it cannot rule out asking HM Treasury for more money for nuclear programmes in future planning rounds.39
Show less
Government response AI summary
The government rejects the committee's observation regarding the nuclear budget, stating that speculating on future funding shifts from conventional to nuclear is unhelpful for planning, and nuclear funding is ringfenced.
Read full response →
HM Treasury
13
Conclusion
Nineteenth Report - MoD Equipment Plan …
Rejected
The MoD’s prioritisation of the nuclear enterprise carries a risk that this will further squeeze budgets for conventional capabilities, because if additional money is not forthcoming, the MoD has the flexibility to redirect money from its conventional equipment budgets to nuclear programmes.40 However, HM Treasury recognises that it will be …
Read more
The MoD’s prioritisation of the nuclear enterprise carries a risk that this will further squeeze budgets for conventional capabilities, because if additional money is not forthcoming, the MoD has the flexibility to redirect money from its conventional equipment budgets to nuclear programmes.40 However, HM Treasury recognises that it will be difficult for the MoD to fund fully its nuclear requirements through the reprioritisation of conventional capabilities, given that the forecast cost for conventional equipment is £9 billion more than the expected budget.41 38 Q 77; C&AG’s Report, para 2.17 39 Q 78; C&AG’s Report, para 2.15 40 Qq 80, 82; C&AG’s Report, para 2.19 41 C&AG’s Report, para 2.19 12 MoD Equipment Plan 2023–2033 2 Wider issues affecting the Equipment Plan Working with the supply chain
Show less
Government response AI summary
The government rejects the committee's observation regarding the nuclear budget, stating that speculating on future funding shifts from conventional to nuclear is unhelpful for planning, and nuclear funding is ringfenced.
Read full response →
HM Treasury
14
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
The Ministry of Defence (the MoD) is working with industry to develop a resilient, responsive, and cost-effective supply chain. For example, it told us that it has been working with the Defence Suppliers Forum, which covers about 80 companies directly and the whole supply chain through trade associations, to ensure …
Read more
The Ministry of Defence (the MoD) is working with industry to develop a resilient, responsive, and cost-effective supply chain. For example, it told us that it has been working with the Defence Suppliers Forum, which covers about 80 companies directly and the whole supply chain through trade associations, to ensure that its suppliers are monitoring supply chain fragility. It has also worked with its prime contractors to get visibility of at least four levels down in its supply chain.42
Show less
Government response AI summary
The government agrees with the implied recommendation to strengthen supply chain resilience and transparency, committing to provide a clearer signal to industry on future demand through the new Integrated Procurement Model and continued publication of the Acquisition Pipeline, with a target implementation date of Spring …
Read full response →
HM Treasury
15
Recommendation
Nineteenth Report - MoD Equipment Plan …
Accepted
Key lessons from the war in Ukraine include the need for the Armed Forces to invest in weapon stockpiles and ensure resilience and agility in sustaining military capabilities.43 The MoD has earmarked £5 billion over the decade to 2032–33 to develop this, half of which is additional funding provided by …
Read more
Key lessons from the war in Ukraine include the need for the Armed Forces to invest in weapon stockpiles and ensure resilience and agility in sustaining military capabilities.43 The MoD has earmarked £5 billion over the decade to 2032–33 to develop this, half of which is additional funding provided by HM Treasury in 2023–24 and 2024–25.44 The MoD has started using the new money from HM Treasury on both enhancing production capacity and working down through the supply chain to secure the supply of essential commodities, such as chemicals.45
Show less
Government response AI summary
The government accepted the recommendation, agreeing to provide clearer signals to industry on future demand through the new Integrated Procurement Model and existing tools like the Acquisition Pipeline, with a target implementation date of Spring 2025. It also committed to forming a new alliance with …
Read full response →
HM Treasury
16
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
The MoD recognises that building capacity, including the industrial skills base, will take time, and that for industry to invest in this it must have confidence that the MoD’s demand will continue.46 For example, the MoD estimates that over the next 10 years industry probably needs an extra 10,000 or …
Read more
The MoD recognises that building capacity, including the industrial skills base, will take time, and that for industry to invest in this it must have confidence that the MoD’s demand will continue.46 For example, the MoD estimates that over the next 10 years industry probably needs an extra 10,000 or so apprentices, graduate engineers and other staff to deliver the MoD’s defence nuclear programme.47 The MoD is working with industry through the Defence Suppliers Forum to try to get more apprenticeships created, and with the higher education sector to attract more people with science, technology, engineering and mathematical qualifications into the defence industry.48 The MoD is also seeking to encourage industry to train enough skilled tradespeople, such as master welders, who then go on to teach the apprentices.49 However, the MoD said that the defence industry has struggled to attract suitable candidates because the skilled people it requires, such as engineers, are in high demand globally.50
Show less
Government response AI summary
The government agrees with the implied recommendation to build industrial capacity and skills, committing to provide a clearer signal to industry on future demand through the new Integrated Procurement Model and improved visibility of the acquisition pipeline by Spring 2025.
Read full response →
HM Treasury
17
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
Because of high and volatile inflation, the MoD has changed its approach to contracting with suppliers. Formerly, around 25% of contracts were ‘firm price’, whereby the supplier bore the inflation risk.51 However, the MoD said that the cost of such firm price contracts has now become too great, and that …
Read more
Because of high and volatile inflation, the MoD has changed its approach to contracting with suppliers. Formerly, around 25% of contracts were ‘firm price’, whereby the supplier bore the inflation risk.51 However, the MoD said that the cost of such firm price contracts has now become too great, and that it was not getting good value for money offers when 42 Q 112 43 Q 31; C&AG’s Report, para 2.20 44 Qq 130, 132; C&AG’s Report, para 2.20 45 Q 113 46 Qq 118, 119 47 Q 83 48 Q 108 49 Qq 128, 129 50 Q 108 51 Q 21; C&AG’s Report, para 2.4 MoD Equipment Plan 2023–2033 13 trying to get suppliers to bear the cost of inflation through new contracts.52 Instead, the MoD has decided to take on more inflation risk itself by linking cost increases in contracts to appropriate indices.53
Show less
Government response AI summary
The government agrees with the implied recommendation to foster good industry relations, committing to improve visibility of long-term planning and form a new alliance with industry through the Integrated Procurement Model by Spring 2025, thereby supporting industry's ability to plan and invest.
Read full response →
HM Treasury
18
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
The MoD has also launched some initiatives to demonstrate a long-term commitment to industry regarding future demand, including an order with BAE Systems for 155mm artillery shells.54 The MoD told us that it wanted to develop an “always-on production line on munitions”, so that it could surge supply when necessary.55 …
Read more
The MoD has also launched some initiatives to demonstrate a long-term commitment to industry regarding future demand, including an order with BAE Systems for 155mm artillery shells.54 The MoD told us that it wanted to develop an “always-on production line on munitions”, so that it could surge supply when necessary.55 It is also engaging with industry to discuss technical developments which are occurring at fast pace because of the war in Ukraine. The MoD said that without government giving industry appropriate guidance, industry cannot make long-term commitments because the chances of it developing something that would not be marketable is high. The volatility in the nature of the threat means that what is most important is to build adaptable capabilities that can respond to changing requirements.56
Show less
Government response AI summary
The government agrees with the implied recommendation to demonstrate long-term commitment and guidance to industry, committing to provide a clearer signal on future demand and improve visibility of long-term planning through the new Integrated Procurement Model by Spring 2025.
Read full response →
HM Treasury
19
Recommendation
Nineteenth Report - MoD Equipment Plan …
Accepted
The MoD said that it tries to publish as much of its defence pipeline as it can to build supplier confidence.57 However, its failure to provide budgets that match ambition, such as the £5.9 billion funding shortfall in the shipbuilding pipeline, risks undermining suppliers’ confidence to invest in their capacity.58 …
Read more
The MoD said that it tries to publish as much of its defence pipeline as it can to build supplier confidence.57 However, its failure to provide budgets that match ambition, such as the £5.9 billion funding shortfall in the shipbuilding pipeline, risks undermining suppliers’ confidence to invest in their capacity.58 Furthermore, the MoD’s focus on not committing to contracts for new projects—only about 25% of its 10-year budget is committed—might undermine its attempts to build supplier confidence.59 Delivering equipment programmes
Show less
Government response AI summary
The government agrees with the recommendation to build supplier confidence, committing to provide a clearer signal to industry on future demand and improve visibility of long-term planning through the new Integrated Procurement Model by Spring 2025, continuing to publish the Acquisition Pipeline twice yearly.
Read full response →
HM Treasury
20
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
Only two of the 46 MoD equipment projects that are included in the Government Major Projects Portfolio (GMPP) are rated as being highly likely to be delivered to time, budget and quality (green).60 Successful delivery appears to be unachievable for five GMPP projects (red), including replacement communications technology, nuclear submarine …
Read more
Only two of the 46 MoD equipment projects that are included in the Government Major Projects Portfolio (GMPP) are rated as being highly likely to be delivered to time, budget and quality (green).60 Successful delivery appears to be unachievable for five GMPP projects (red), including replacement communications technology, nuclear submarine reactors, and missiles.61 The rest of the GMPP projects are rated amber, which means that delivery appears feasible, but there exist significant issues requiring management attention.62 The MoD told us that it has introduced several initiatives to address this, including regular GMPP review meetings, started by the Minister for Defence Procurement, which focus on red- and amber-rated projects, and project review meetings led by non-executive directors on the board of Defence Equipment & Support.63
Show less
Government response AI summary
The government agrees and will implement the Integrated Procurement Model from April 2024, aiming to drive increased pace in delivery of military capability through new services, guidance, and independent advice, with full implementation continuing through 2024-2025.
Read full response →
HM Treasury
21
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
The MoD has made some progress with training senior responsible owners (SROs) and increasing the proportion of their time spent on delivering projects.64 SROs also now 52 Q 23 53 Qq 21, 23; C&AG’s Report, para 2.4 54 Qq 31, 113; C&AG’s Report, para 2.6 55 Q 30 56 Q …
Read more
The MoD has made some progress with training senior responsible owners (SROs) and increasing the proportion of their time spent on delivering projects.64 SROs also now 52 Q 23 53 Qq 21, 23; C&AG’s Report, para 2.4 54 Qq 31, 113; C&AG’s Report, para 2.6 55 Q 30 56 Q 75 57 Q 75 58 Q 26; C&AG’s Report, para 2.6 59 Qq 15, 16 60 Q 102; C&AG’s Report, para 2.11 61 Q 106; C&AG’s Report, paragraph 2.11; “The full definition of ‘red’ is that “Successful delivery of the project appears to be unachievable. There are major issues with project definition, schedule, budget, quality and/or benefits delivery, which at this stage do not appear to be manageable or resolvable. The project may need re- scoping and/or its overall viability reassessed.” 62 C&AG’s Report, para 2.11 63 Q 111 64 Q 122 ; C&AG’s Report, para 2.12 14 MoD Equipment Plan 2023–2033 have a direct route to contact senior MoD staff if they are concerned about progress.65 However, the MoD has faced difficulties both in funding teams to support SROs, and in recruiting and retaining suitably qualified and experienced staff.66 The MoD said that it is facing a slow and steady attrition of skilled staff, because they have attractive skillsets that are wanted by many industries in a vibrant job market.67 In March 2023, recruitment and retention problems resulted in SROs for 24 out of 30 major MoD equipment projects rating the availability of skills and capabilities for their projects as amber, while four rated it red.68
Show less
Government response AI summary
The government agrees and will implement the Integrated Procurement Model from April 2024, aiming to drive increased pace in delivery of military capability through new services, guidance, and independent advice, with full implementation continuing through 2024-2025.
Read full response →
HM Treasury
22
Recommendation
Nineteenth Report - MoD Equipment Plan …
Accepted
Since the end of COVID-19 restrictions, there has been increased international demand for key components and skilled workers from other sectors, such as the car and commercial aviation industries.69 This has contributed to the slow delivery of defence equipment, including digital communications, armoured vehicles and Royal Navy ships.70 For example, …
Read more
Since the end of COVID-19 restrictions, there has been increased international demand for key components and skilled workers from other sectors, such as the car and commercial aviation industries.69 This has contributed to the slow delivery of defence equipment, including digital communications, armoured vehicles and Royal Navy ships.70 For example, solving technical issues affecting the state-of-the-art Type 26 frigate has contributed to delays, while demand for semiconductors by other industries has affected the progress of the Army’s Boxer armoured fighting vehicle project.71 The delivery of new warships for the Royal Navy is currently considerably slower than in some countries such as Japan, although the MoD is hopeful that the pace will quicken as projects, such as Type 31 frigates, become more established.72
Show less
Government response AI summary
The government accepted the recommendation, stating it has introduced a new Integrated Procurement Model, announced in February 2024, to increase the pace of military capability delivery, with implementation beginning in April 2024 and continuing through 2025.
Read full response →
HM Treasury
23
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
An emphasis on pace is one of five key features of the new “Integrated Procurement Model” which the Minister for Defence Procurement announced on 28 February.73 For example, the MoD plans to get new capabilities into the hands of the Armed Forces more quickly by introducing them into service when …
Read more
An emphasis on pace is one of five key features of the new “Integrated Procurement Model” which the Minister for Defence Procurement announced on 28 February.73 For example, the MoD plans to get new capabilities into the hands of the Armed Forces more quickly by introducing them into service when the “minimum deployable capability”— 60% or 80% of the capability—has been developed, then adding the remaining capability when in service (this technique is sometimes referred to as ‘spiral development’). In our session, the MoD cited its modular approach to the Boxer armoured vehicle project to illustrate this method.74 The new procurement model also includes a joined-up approach based on “pan-defence affordability”; a new Integration Design Authority; prioritising exportability to maximise the potential market for UK-developed defence capabilities; and closer engagement with industry to encourage innovation and make supply chains more resilient.
Show less
Government response AI summary
The government agrees and confirms the implementation of the Integrated Procurement Model from April 2024, designed to drive increased pace in military capability delivery through new services, guidance, and independent advice, with full implementation continuing through 2024-2025.
Read full response →
HM Treasury
24
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
In the meantime, the intensive use of existing equipment is contributing to a maintenance backlog that will take more time and money to address, leaving the UK’s Armed Forces having to make do with fewer pieces of ageing equipment nearing the end of their in-service lives.75 For example, there is …
Read more
In the meantime, the intensive use of existing equipment is contributing to a maintenance backlog that will take more time and money to address, leaving the UK’s Armed Forces having to make do with fewer pieces of ageing equipment nearing the end of their in-service lives.75 For example, there is uncertainty about whether two Type 23 frigates that have recently gone into refit will return to active service.76 If they do not, this 65 Q 111 66 C&AG’s Report, para 2.12, 2.13 67 Q 127 68 C&AG’s Report, para 2.13 69 Q 108 70 Q 112; C&AG’s Report, para 2.5 71 Qq 108, 112 72 Q 42 73 Defence Procurement Minister oral statement on the Integrated Procurement Model – 28 February 2024 – GOV. UK (www.gov.uk) 74 Qq 33, 34, 84 75 Qq 46, 114 76 Q 35 MoD Equipment Plan 2023–2033 15 would further curtail the Royal Navy’s already limited capacity to provide escorts.77 The Type 23 class is coming to the end of its in-service life, and the cost of refitting them has increased from £23 million to £100 million because their age means that the necessary work is now much more extensive and takes almost twice as long to complete.78 Reliance on allies
Show less
Government response AI summary
The government agrees with the committee's implied concern regarding equipment readiness and responds by implementing a new Integrated Procurement Model from April 2024, designed to accelerate the delivery of military capability.
Read full response →
HM Treasury
25
Conclusion
Nineteenth Report - MoD Equipment Plan …
Acknowledged
Recent international developments, including the war in Ukraine, have underlined the importance of strategic international partnerships for the UK.79 The UK has been working with its allies, including Ukraine, to develop interoperable equipment, pool essential munitions and encourage industry to build its capacity to supply the equipment they need.80
Read more
Recent international developments, including the war in Ukraine, have underlined the importance of strategic international partnerships for the UK.79 The UK has been working with its allies, including Ukraine, to develop interoperable equipment, pool essential munitions and encourage industry to build its capacity to supply the equipment they need.80
Show less
Government response AI summary
The government agrees with the importance of strategic international partnerships and describes its ongoing efforts to capitalize on the UK's convening power, review allied support, and engage industry, with a target implementation date of Spring 2025.
Read full response →
HM Treasury
26
Conclusion
Nineteenth Report - MoD Equipment Plan …
However, for deterrence to be effective, the UK’s Armed Forces must be credible.81 Such credibility is undermined by widely reported recruitment and retention issues, with eight people leaving the Armed Forces for every five who are recruited.82 Despite the MoD’s assurances that it took this issue very seriously, it accepted …
Read more
However, for deterrence to be effective, the UK’s Armed Forces must be credible.81 Such credibility is undermined by widely reported recruitment and retention issues, with eight people leaving the Armed Forces for every five who are recruited.82 Despite the MoD’s assurances that it took this issue very seriously, it accepted that recruitment and retention is a problem and that this had led to workforce pressures.83 The MoD acknowledged that its current workforce plan was not working in the way it wanted, and said that its number one risk to delivering defence priorities both now and in the future was not attracting the right number of people with the skills that it needs.84 To address this, it is looking at ways to provide greater flexibility in Armed Forces careers, such as “zigzag careers” with people coming in and out of the services.85
Show less
HM Treasury
27
Conclusion
Nineteenth Report - MoD Equipment Plan …
Accepted
In the meantime, the MoD is considering mothballing Royal Navy ships because of crew shortages, and the only Royal Navy ship able to fully replenish the UK’s aircraft carriers is unavailable this year because of a refit.86 With the support of its allies, the UK’s Armed Forces continue to fulfil …
Read more
In the meantime, the MoD is considering mothballing Royal Navy ships because of crew shortages, and the only Royal Navy ship able to fully replenish the UK’s aircraft carriers is unavailable this year because of a refit.86 With the support of its allies, the UK’s Armed Forces continue to fulfil a crucial international role.87 However, many of its allies are facing similar challenges to the UK, which might affect their ability and willingness to continue providing extensive support.88 77 Qq 39, 40 78 Q 41; C&AG’s Report, para 2.5 79 Q 41 80 Qq 76, 116, 118, 120 81 Q 61 82 Qq 8, 11, 49 83 Qq 8, 54 84 Qq 10, 11 85 Qq 6, 125 86 Qq 41, 43, 48–50 87 Q 54 88 Qq 108, 117 16 MoD Equipment Plan 2023–2033
Show less
Government response AI summary
The government agrees with the implied recommendation to address capability challenges, committing to ensuring balanced capabilities, driving cooperative burden-sharing with allies, and rigorously reviewing allied support and identified risks as part of ongoing capability planning and force testing, with a target implementation date of Spring …
Read full response →
HM Treasury