Source · Select Committees · Public Accounts Committee
Recommendation 19
19
Accepted
MoD's funding shortfalls and uncommitted contracts undermine defence suppliers' confidence.
Recommendation
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
Government Response 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.
Government Response
Accepted
HM Government
Accepted
4.1 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2025 4.2 The department agrees with the need to provide a clearer signal to industry on future 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. 4.3 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. 4.4 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. 4.5 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. 4.6 The department continues to publish the Acquisition Pipeline twice yearly, in April and October.