Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Accepted
Develop and communicate clear, funded schedules for military equipment procurement and support work.
Conclusion
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
Government Response 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.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. demand. Greater transparency of the future pipeline is an important element of the new Integrated Procurement Model, building on earlier commitments in the Defence and Security Industrial Strategy (DSIS) and Defence Command Paper Refresh. Since publication of the DSIS, the Defence Capability Framework, the Acquisition Pipeline, a number of sector specific strategies and most recently the Science and Technology Collaboration and Engagement Strategy all mark significant progress on this commitment and allow industry to plan ahead. Under the Integrated Procurement Model, the department is continuing to improve visibility of long-term planning processes to inform industry’s future plans and investment. The department is forming a new alliance with industry, moving beyond the traditional customer- supplier relationship, developing long-term strategic alignment that not only delivers the capabilities required now, but binds the department and industry into a joint endeavour that can sustain the nation in times of conflict. The department is also bringing industry into the fold much sooner, from the conception and development of ideas through to the final stages of delivery and are involving industry at all levels earlier in the military capability development processes. The department is working to ensure there is a collaborative technical environment, operating at secret levels of classification, to share information with industry in a much more dynamic way. The department continues to publish the Acquisition Pipeline twice yearly, in April and October.