MEMORANDUM SUBMITTED BY THE DEFENCE INDUSTRIES
COUNCIL (24 MAY 2000)
Thank you for the opportunity to input our views
to the Committee as it examines the MoD's latest proposals for
a public-private partnership at DERA.
As a result of MoD's announcement on 17 April
the Defence Industry has been assembling views to put into the
Department by their deadline of 9 June so at this stage I can
only give you indications of the issues we will be raising.
You have already taken evidence from Baroness
Symons who recorded her understanding that the DIC were supportive
of this new proposal for DERA's future. For the record I attach
my letter to her on this issue which underpins her comment but
does indicate some key issues for which we still need detailed
dialogue with the department in order to be sure that our concerns
will be met.
In addition to these there are also important
and I believe quite complex issues surrounding the handling of
Intellectual Property, achieving fair competition between the
privatised DERA and other sources for research and the definition
of "Defence Manufacturing" which is to be prohibited
to NDERA. This latter question lies at the heart of whether the
Defence Industry will be able to form a trusting relationship
with NDERA that is essential for this new arrangement to achieve
wealth creating benefit for the UK.
Finally, we do remain very concerned that Government
appears to be relying on the private sector to replace public
funding of Defence Research and Technology to an extent which
is frankly unrealistic.
Industry is bound to have to focus on near to
market technology investment where a clearer return is visible.
Government cannot avoid taking responsibility for the longer term
work if we are to sustain an adequate level of modern defence
capability delivered through a smart procurement process.
Annex
Letter to the Minister for Defence Procurement
from the Defence Industries Council (9 March 2000)
DERA PPP
At the last National Defence Industries Council
meeting in December, which you chaired, we discussed DERA PPP.
Colin Balmer told that meeting that one of the
options being considered was the Core Competence model with its
implication that DERA would be divided between a part retained
by MoD and a part put into a public private partnership. I commented
that industry would broadly welcome this choice as against the
other alternatives and that is still the case. We still see the
following tasks as crucial to remain within MoD.
— Defence doctrine and scenario analysis.
— High level systems assessment and
operational analysis.
— Risk assessment and management.
— Technology insertion and evolution
strategy—planning S&T investment for both CRP and ARP.
— Independent and impartial assessments
for equipment selection procurement and support.
— Control of Government to Government
relationships.
Dialogue between David Marshall and Terence
Jagger has given confidence that the retained part of DERA will
perform these tasks but there remain many key issues to resolve
if you go forward to implementation of this model.
Industry is very keen to support you in this
as we have done with Smart Procurement and you might think it
appropriate to have both a high level oversight group with industry
presence and support at working level either through secondment
or regular access to appropriate individuals.
I look forward to hearing from you on how you
believe we can most appropriately help this critical development.
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