Recommendation 4

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