Source · Select Committees · Defence Committee
Recommendation 123
123
Accepted
MOD-defence industry relationship ineffective for strategic readiness despite acknowledged reliance
Conclusion
Despite the acknowledged reliance on industry, both General Lord Houghton and General Sir Nick Carter questioned whether the relationship between the MOD and industry was effective in supporting strategic readiness. General Lord Houghton told us that despite numerous reviews on defence procurement, the relationship between Defence and the defence industry “is still not anywhere close to where it needs to be”.245 General Sir Nick Carter pointed out that defence industry reports to its shareholders rather than Government and so if the Government required resilience from industry then it would need to incentivise that rather than focusing on efficiency and value for money.246 Professor Sir Lawrence Freedman described the lack of thinking about industrial capacity as a strategic failure.247
Government Response Summary
The government is reforming the defence acquisition system with a new Integrated Procurement Model and committing to earlier engagement with industry under DCP23 to create a more resilient industrial base.
Government Response
Accepted
HM Government
Accepted
The department is reforming the defence acquisition system to address the challenges identified in this report and in the Defence Sub-Committee’s 2023 report on Defence Equipment and Support. Details of the new Integrated Procurement Model were set out in an oral statement by the Minister for Defence Procurement on 28 February 2024 and a supporting document is available at 20240228_Integrated_Procurement_Model (publishing.service.gov.uk). Through commitments made in DCP23, Defence is prioritising the things that will make those capabilities more lethal and ready, such as stockpiles, munitions, and enablers including storage facilities and our transformed partnership with industry, where we will engage much earlier in strategic conversations to create a more resilient, reliable, and adaptable industrial base. This will not only bolster UK industry and diplomatic influence, but also helps sustain Ukraine in the fight in 2024 and develops its economy beyond.