Source · Select Committees · Public Accounts Committee
Recommendation 6
6
Acknowledged
We are concerned that the Department has not yet developed a supply chain that can...
Recommendation
We are concerned that the Department has not yet developed a supply chain that can reliably and quickly deliver the capabilities and stockpiles it needs. The Department has started to replenish stocks gifted to Ukraine, the cost of which HM Treasury will cover through the Reserve. It is also working with HM Treasury on a case-by-case basis to agree on a reasonable replacement when items are no longer in production or where the UK’s requirement has changed. However, the Department does not expect to replenish all depleted stocks, such as NLAW anti- tank weapons, for at least two years. The Department says that one important lesson from the Ukraine conflict has been the need to shift from its approach of buying batches of munitions to supporting continuous production lines which suppliers can ramp up when required. It says it has started to work with key UK suppliers to secure production lines, and the 2022 Autumn Statement provided an additional £560 million over the next two years to help support this. The Department is also discussing with NATO allies how to stimulate the wider supply chain to meet the alliance’s long-term needs. Recommendation 6: The Department should write to us alongside its Treasury Minute response setting out its progress in developing a plan with the wider defence industry to improve the scale and efficiency of its supply chain. 8 MoD Equipment Plan 2022–2032 1 The Equipment Plan in a more volatile world
Government Response Summary
The government agrees and says it has published a Defence Supply Chain Strategy last year and is implementing initiatives including a MOD Supply Chain Development Programme, a Supply Chain Contingency Fund, and a tool to manage supply chain issues. It recognises collaboration with the defence industry is vital.
Government Response
Acknowledged
HM Government
Acknowledged
The government agrees with the Committee’s recommendation. demands upon the Defence supply chain and its ability to deliver capabilities to our Armed Forces. Working with our industry partners, the department has adapted its supply chains and how they are managed on many critical programmes. In tandem with programme level action, the Defence Supply Chain Strategy was published last year which focuses on reviewing and improving aspects of Defence support and logistics. The department is now implementing a range of initiatives in support of this Strategy and the and wider supply chain commitments MOD has made. These including the creation of a MOD Supply Chain Development Programme to support Mid Tiers and SMEs, a Supply Chain Contingency Fund, and beginning the implementation of a tool that enables MOD to proactively manage supply chain issues at lower tiers. The department recognises that collaboration with the defence industry is vital for the delivery of these initiatives. The Defence Suppliers Forum, the principal mechanism for MOD- Industry engagement, continues to be fully utilised and is being refocused with support from industry to ensure that we are addressing the most important issues facing UK defence. Although these efforts and initiatives are substantial, the scale of the supply chain challenge means that MOD is looking at where it should invest more broadly into our supply chain design and management. MOD understands the need to consider supply chain aspects right from the very early stage of capability planning and aims to improve our ability to create supply chain for future capabilities that better support resilience and other defence priorities.