Select committee: Defence Committee
Conclusion 19
Ninth Report - It is broke — and it’s time to fix it: The UK’s defence procurement system
Published 16 Jul 2023
Paragraph 143
Defence Committee All items in this report Report on parliament.uk ↗
Conclusion (the committee's words)
The Ministry of Defence must stop rewarding failure. On too many occasions, industry have been able to delay programmes with no financial sanctions. There is a reluctance from every part of the procurement system to cancel a failing programme. This also allows the Front Line Commands to spend irresponsibly and for industry to increase their profits, through multiple change orders. The Ministry of Defence should take, if necessary, a more robust attitude towards its contractors if programmes get into serious difficulty. Allied to this, Ministers should be prepared to cancel programmes that are obviously failing, rather than exercising constant ‘optimism bias’ to the detriment of the UK taxpayer.
From: Defence Committee, Ninth Report - It is broke — and it’s time to fix it: The UK’s defence procurement system (HC 1099), paragraph 143, 16 July 2023
Government response
The government responded to the whole report on 20 September 2023 (deadline 16 September 2023).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government does not agree that the procurement system is broken, but accepts "the need for reform" and sets out reform work already under way across Defence.
- On the Committee's P75 recommendation, it agrees there is "a strong argument" for higher probability figures for schedule approval of complex programmes, and has issued guidance making P70 "the norm on schedule" for Government Major Projects Portfolio programmes. It says approval at a higher P value "will not improve project performance".
- It agrees on the need for more consistent dialogue with industry and on "an increased emphasis on time", but says it "would therefore not be desirable" to use the Urgent Capability Requirements approach across the whole defence portfolio.
- On accountability, it "recognises the need to clarify internal accountabilities", and says this will be addressed in the Defence Operating Model review. It says "active consideration" is being given to the CEO of DE&S joining the Defence Board.
- On SRO tenure, it notes there is "no formal mechanism" to keep an individual in post for five years, but says it continues to explore how to use available levers such as performance pay and pivotal role allowances.