Recommendation 20

HM Government Rejected

While we recognise that Defence procurement is inherently complex and challenging, we do not accept that the Department’s track record of delivering large and complex programmes is abysmal. The MOD manages a portfolio of complex programmes and must contend with a constantly shifting threat environment. Delays may result from a number of diverse factors including that many of these programmes operate at the cutting edge of technology, while it is also sometimes necessary to adjust military requirements in light of evolving information on threats. Although some of our major equipment programmes have faced difficulties, there have also been many successes in providing our Armed Forces with the capability that they need. For example, the P-8A Poseidon programme was delivered to time and within budget; less than four years from the November 15 SDR statement to delivery of the first aircraft (October 2019). The final aircraft was delivered in January 2022. The Type 31 frigate programme has also been transformative for the naval shipbuilding sector, introducing a second pipeline of shipbuilding in Scotland. It is the first competitive warship procurement in a decade, with the Ministry of Defence achieving award of contract in timescales unprecedented for a procurement of its size and complexity. In addition, Defence Equipment and Support (DE&S), as a key delivery agent, is responsible for over £100 billion of the Defence Equipment Plan (EP) over the next 10 years, has delivered £8.3 billion of EP efficiencies for its customers since 2016/17 (of which £5.9 billion has so far been independently assured). Indeed, over the last six years, DE&S has delivered efficiency savings for its customers that have exceeded its operating expenditure budget. We continue to work hard to address the challenges that face complex Defence acquisition programmes, including with our suppliers, and remain focussed on delivering the right capability that is safe to operate, at the best value to the taxpayer. The Infrastructure and Projects Authority already provides additional scrutiny of the department’s major programmes, which are critical to the delivery of Defence’s priorities and are outlined in Defence’s Annual Equipment Report. Defence is also committed to working with international partners to collaborate on the joint development of next gen equipment, for example through the FCAS programme and through AUKUS. The publication of the DSIS saw a step change in the relationship between Government and industry, allowing for a clear assessment of strategic needs, future priorities, and the realities of the market. This new relationship is supported through fundamental reforms of 16 Government Response to the Committee’s Second Report the regulations that govern defence and security procurement and single source contracts, driving increased pace into acquisition. This ensures that we incentivise innovation and productivity and consider long-term value for money. These changes should enable better communication and understanding between the MOD and Industry in the early stages of a procurement. Further, Defence Digital manages and delivers a very large and complex digital services portfolio that successfully supports and underpins Defence’s military and business operations. The overall delivery track record cannot be characterised as ‘abysmal’. We have an inherited legacy environment that is overly aged and fragmented and is not well suited to meeting the needs of the information age. In response, we are leading a programme to modernise skills, process and technology in support of our goal to continually deliver game-changing digital and data technology to the front line. We have made good progress in the early stages of this program and need to ensure we retain support and investment to stay the course through to 2025 and beyond.