Source · Select Committees · Public Accounts Committee
Recommendation 12
12
Accepted
Resilient industrial capacity and supply chains are crucial for sustaining armed forces equipment.
Conclusion
The final lesson is the importance of having the industrial ability and capacity to sustain equipment if supply chains are disrupted. The Department said that this means making sure that the armed forces could continue to operate equipment, even if the UK’s allies have been disrupted for political or technical reasons.20 The Department regards factories as in effect being part of weapon systems because they are fundamental to the UK’s ability to fight and sustain its armed forces.21 The Department explained that the UK defence industry needs to be reorganised to increase its capacity when needed to meet greater demand.22
Government Response Summary
The government agrees with the committee's observation and commits to fundamentally changing procurement processes by tailoring acquisition, engaging early with industry, adopting spiral acquisition, and has established UK Defence Innovation (UKDI) as of July 2025 to accelerate defence capability delivery.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee’s recommendation. Target implementation date: June 2026 2.2 As the report recognises, the government has identified and implemented numerous lessons learned from supplying Ukraine into how it is reforming the department’s procurement processes, and the department is committed to continuing to learn from this conflict. 2.3 The conflict in Ukraine has shown that the department must fundamentally change the way it procures. The rapidly changing threat and technology environment requires the department to increase the pace of military capability delivery, maximise the output from the defence budget, and ensure that the department can innovate at a wartime pace. 2.4 The Strategic Defence Review (SDR) recognised the complexity of the defence operating environment and the imperative to reflect national and industrial needs in the department’s procurement strategies. The department’s response to Ukraine has shown that the system can work in an agile and accelerated way, balancing risk to deliver capability at pace. The vision set out in the SDR is now being delivered through Defence Reform. 2.5 As such, the department is reforming its acquisition system to drive increased pace and agility in capability delivery. A new segmented approach to procurement will enable tailoring of acquisition processes to the type of capability, supplier and risk involved. The department will also engage with industry early, rewarding productivity and risk-taking and sharing risk with suppliers earlier in capability development to increase the speed of delivery whilst ensuring alignment. 2.6 The department will drive pace through approaches such as spiral acquisition to deliver a minimum deployable capability to the front line more rapidly and then iterate it to adapt quickly to a changing environment. 2.7 On 1 July 2025, the department stood up UK Defence Innovation (UKDI), a new organisation that draws on lessons learned from Ukraine, MOD’s own best practice and the experience of international partners. UKDI will ruthlessly prioritise to focus on the areas with most potential, with significant freedoms to contract with speed, simplicity, and flexibility, harnessing and bolstering the competitiveness of the UK’s tech sector, as well as further supporting UK SMEs.