Defence Equipment 2010 - Defence Committee Contents


Introduction

1.  Over the past few years we have carried out regular inquiries into defence procurement. In our Defence Equipment 2009 Report, published on 10 February 2009, we undertook to monitor a number of issues relating to the progress and performance of the Defence Equipment and Support (DE&S) organisation with the Ministry of Defence (MoD) and the funding of defence equipment and support. [1] We announced our Defence Equipment 2010 inquiry on 22 July 2009, and set out the following terms of reference:

The Defence Committee is undertaking an inquiry to examine aspects of the MoD's Defence Equipment programme. It expects to follow up areas of weakness and poor performance identified in its last Report, Defence Equipment 2009 (HC 107), which was published earlier this Session. The Committee intends to focus on armoured vehicles and the future of the FRES (Future Rapid Effect System) programme, strategic air-lift and maritime capability.

2.  Our inquiry also took into account The Review of Acquisition for the Secretary of State for Defence ("The Gray report") which was published on 15 October 2009.[2] In December 2008, the then Secretary of State for Defence, Rt Hon John Hutton MP, commissioned Bernard Gray to assess what steps the Department was making to reform its procurement process and to suggest further recommendations for how that process could be improved. The Gray report concluded that "the MoD has a substantially overheated equipment programme, with too many types of equipment being ordered for too large a range of tasks at too high a specification" and that "this programme is unaffordable on any likely projection of future budgets".[3]

3.  Some of the key findings of the Gray report were endorsed in the National Audit Office's (NAO) Ministry of Defence: Major Projects Report 2009, published on 15 December 2009.[4] The Comptroller and Auditor General, Amyas Morse, gave evidence to us last year in our Defence Equipment 2009 inquiry, in his previous role of Defence Commercial Director. In the NAO press release accompanying the Major Projects Report 2009, he said that "The Ministry of Defence has a multi-billion pound budgetary black hole which it is trying to fix with a 'save now, pay later' approach. This gives a misleadingly negative picture of how well some of the major projects in the MoD are managed, represents poor value for money and heightens the risk that the equipment our Armed Forces require will not be available when it is needed or in the quantities promised."[5] We subsequently received the MoD's Green Paper, Adaptability and Partnership: Issues for the Strategic Defence Review, and its Defence Strategy for Acquisition Reform.[6] These documents, and the Gray report, noted that a high proportion by number of equipment projects are delivered to cost and on time, and that the UK's allies are in general complimentary about the procurement reforms already implemented.[7]

4.  The Committee held four oral evidence sessions with the following witnesses:

  • General Sir Kevin O'Donoghue, Chief of Defence Materiel; Dr Andrew Tyler, Chief Operating Officer (DE&S); and Guy Lester, Director Capability Resources and Scrutiny (MoD) (1 December 2009).
  • Industry representatives—Sir Brian Burridge, Vice President Strategic Marketing, Finmeccanica UK Ltd; Ian Godden, Secretary to the Defence Industries Council and Chairman of ADS Group Ltd; Ian King, Chief Executive BAE Systems plc; and Dr Sandy Wilson, President and Managing Director, General Dynamics UK Ltd; (8 December 2009).
  • Quentin Davies MP, Under Secretary of State and Minister for Defence Equipment and Support; General Sir Kevin O'Donoghue, Chief of Defence Materiel; and Vice Admiral Paul Lambert, Deputy Chief of Staff, Capability (15 December 2009).
  • Bernard Gray and Iain Evans (LEK Consulting); followed by Lord Drayson, Minister for Strategic Defence Acquisition Reform and Sir Bill Jeffrey KCB, Permanent Under Secretary MoD (12 January 2010).

5.  We are grateful to all of those who contributed to our inquiry, including our specialist advisers.


1   Defence Committee, Third Report of Session 2008-09, Defence Equipment 2009, HC 107 Back

2   Review of Acquisition for the Secretary of State for Defence: An independent report by Bernard Gray, "The Gray report", October 2009 Back

3   The Gray report, p 6 Back

4   National Audit Office, Ministry of Defence: The Major Projects Report 2009, 15 December 2009, HC 85 Back

5   NAO, Review of Acquisition for the Secretary of State for Defence: An independent report by Bernard Gray, "The Gray report", October 2009, pp 5-6 Back

6   Ministry of Defence, Adaptability and Partnership: Issues for the Strategic Defence Review, Cm 7794, February 2010 and The Defence Strategy for Acquisition Reform, Cm 7796, February 2010 Back

7   Ministry of Defence, The Defence Strategy for Acquisition Reform, Cm 7796, February 2010, p 6 and p 26 Back


 
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