Recommendation 13

HM Government Acknowledged

The Government is grateful to the Committee for the insights it offers. As the Committee notes, we have provided substantial support to those within the defence supply chain and have publicised the opportunities available, which include funding streams from sources such as the Aerospace Technology Institute. will seek to further enhance related communications to SMEs, while noting that we have received much positive feedback. The MOD is working closely with the Cabinet Office Strategic Partnering Team, BEIS and DIT to make sure that the right messages are getting through to defence industry on a broad scale. We recognise the challenges facing smaller businesses and the department’s communications strategy has focused on signposting the various sources of Government guidance and support. The MOD adopted a multi-channel strategy to communicate Fifth Special Report of Session 2019–21 9 Covid support measures, including interim payments to maintain cash flow to our supply chain, utilising a combination of direct communications facilitated through the Defence Contracts Online portal, social media (via our Twitter channel @DefenceProc), and through engagement with the Defence Suppliers Forum. We have also worked closely with Strategic Suppliers and Trade Associations to ensure that messaging was cascaded as far as possible into the supply chain, with a focus on reaching smaller suppliers. Support measures were made available to direct suppliers, with the expectation that these would be flowed down through the supply chain. The then-Permanent Secretary wrote to Defence industry Chief Executives on 27 March and 6 May 2020 to emphasise our very clear expectation that the whole of the defence supply chain should benefit from the approach we are taking to support defence contractors, and that our direct suppliers would, in turn, safeguard their subcontractors, and particularly vulnerable suppliers including SMEs, by continuing to pay promptly and maintain cashflow. Regular communication with industry, including SMEs, has been a vital part of our response to the pandemic and we are continuing this dialogue. The MOD assessed and monitored the financial resilience of more than 600 of our critical suppliers to better understand supply chain resilience, continued running the Defence Suppliers Forum Executive Group, and established regular meetings with the mid-tier and SME communities to ensure the requirements of different tiers of the supply chain are understood. We work closely with UK defence industry trade organisations including the ADS Group (which represents companies in the UK Aerospace, Defence, Security and Space sectors) and Northern Defence Industries Ltd, which focuses on defence and aerospace supply chains. The MOD is grateful for the Committee’s recommendation that it should improve its communication strategy with SMEs to ensure that they are aware of the support that they are eligible for at this difficult time. Improved communication features within the Department’s SME Action Plan, which outlines the commitment to improving engagement with SMEs across the defence supply chain and addressing behavioural, policy and process change. In addition, we have established a new SME Working Group under the Defence Suppliers Forum, to develop a challenging but achievable programme of work to improve SME engagement and to meet the aspirations contained within the SME Action Plan. We plan to publish a refreshed SME Action Plan later this year and will seek to implement any lessons learnt from the handling of the pandemic.