SDSR 2015 and the Army Contents

6Army equipment


123.In addition to setting out the mission for the Army, SDSR 2015 contained details on an extensive equipment programme for it. In this section we will consider the Army’s major projects and the risks attached to their delivery.

Army equipment projects

124.The key elements of the Army’s equipment plan are as follows:

The MoD considered these capabilities to be critical to delivering a modern ground manoeuvre warfighting capability.247

125.By 2025, the Army should also start to take delivery of the new Mechanized Infantry Vehicle (MIV) and Multi-Role Vehicle (Protected) (MRV-P) projects.248 In the same timeframe, the delivery of the next generation of Attack Helicopters (at a cost of $2.3 billion)249 should be well underway alongside the continued build–up of the new Wildcat armed utility helicopter, the modernisation of the Puma force, an upgrade of the Chinook heavy lift helicopter, and the replacement of the Sea King by the Merlin Mk 4 in the Commando Helicopter Force.250

126.According to the MoD, this ambitious programme will add “significant capability to the warfighting division”.251 The MoD told us that:

Underpinning all of these new capabilities will be the new land environment tactical communication and information systems project. By 2025, this will have delivered the next generation of combat net radio and wide area network for both voice and data communications across the warfighting division.252

The AJAX programme

127.The AJAX fleet of armoured reconnaissance vehicles is being developed for the British Army’s armoured cavalry regiments in both the armoured infantry and the new planned Strike Brigades.253 Between 2017 and 2024, 589 AJAX will be manufactured at a cost of £4.5 billion and will replace the Army’s Combat Vehicle Reconnaissance (tracked) armoured vehicles.254 The reconnaissance vehicle will contain a family of variants in support and logistic roles. The breakdown of the AJAX variants will be as follows:

128.According to the MoD, the new multi-role AJAX armoured fighting vehicle will transform the Army’s medium armour and advanced intelligence, surveillance, target acquisition and reconnaissance (ISTAR) capability.256 Furthermore, it will be able to conduct sustained, expeditionary, full spectrum operations with a reduced logistic footprint, in a wide range of combat situations and operating environments. The Chief of the General Staff regarded the procurement of the AJAX vehicles as an important component of the strategy to counter the re-emergence of the state-on-state threat and the ability of potential adversaries to conduct “anti-access area denial”.257

129.Those AJAX vehicles assigned to the Strike Brigades will provide the capability to project combat power across distances of up to 2,000km; to disperse and concentrate very rapidly; and to dominate ground and population mass.258 The Chief of the General Staff described AJAX as genuinely networked and genuinely mobile, with good firepower and good protection. He also explained that the Army was taking a “methodical and deliberate” approach to the AJAX capability and the plan was to “test it to destruction and to experiment with it” at an early stage so that, by 2021, the Army would have a known initial operating capability.259

130.Each regiment equipped with AJAX will have between 50 and 60 vehicles,260 and the two Strike Brigades are each predicted to have two AJAX regiments and two mechanised infantry battalions. Once the Army reaches full operating capability, the Chief of the General Staff expected that one of those brigades would be at 30 days’ notice to move.261

131.AJAX will come with very sophisticated electronic systems to allow it to conduct networked-enabled warfare to create a battle picture for the divisional HQ.262 This will provide the Army with a significant uplift in capability. However, it should be noted that a similar previous project, the Future Rapid Effects System (FRES), had also encountered difficulties during procurement due to its complexity, affordability and delivery timetable.

132.Dr Warren Chin questioned whether General Dynamics—the producer of AJAX—had learned the lessons of the FRES programme.263 He was particularly concerned about factors which lay outside the control of the Army, such as “affordability, technological feasibility and the means to ensure that it came off the production line successfully”.264 He was concerned that AJAX was being portrayed as a ‘silver bullet’ for the Army to succeed under an airspace which it did not control and in theatres to which the sea lanes of communication might be in jeopardy.265 Sir Paul Newton agreed:

I don’t see Ajax as the silver bullet. If you look back two years and think how far upgrading the capability has gone in that time, the Warrior programme is being upgraded for the armoured infantry, the Challenger programme is being upgraded; attack helicopters are being upgraded, Chinooks are being upgraded. Those are not rhetorical; they are actual programmes that are happening. Ajax is essential to be able to give close recce, because our capability there is a gap.

Warren [Chin] makes an important point about not over-specifying. My understanding is that the Army, as it looks at the Mechanised Infantry Vehicle—the sister project to AJAX—is thinking very hard about making sure it states the absolute requirements, rather than an unachievable shopping list of everything.266

Challenger 2 Main Battle Tank and Warrior Infantry Fighting Vehicles

133.The Army has 227 Challenger 2 main battle tanks, a reduction of 98 from 2010. These are used by the Armoured Infantry Brigades as the Army’s all-weather, mobile, protected, direct-fire anti-tank capability. Challenger 2 is best suited for high-tempo mobile operations against an army of similar sophistication and is equipped with weapons that can engage a wide range of targets—in particular enemy Armoured Fighting Vehicles.267 The tanks are currently divided between the deployable field force, training establishments, storage and long-term maintenance.268 In the context of the restructuring of the Army post-SDSR 2015, the intention is to have four, rather than three, mounted close combat regiments comprising of two Challenger 2 and two AJAX regiments.

134.Challenger 2 is subject to a £700 million Life Extension programme269. This will address key aspects of obsolescence in order for the Army to keep it in service until 2035. In December 2016, the MoD announced that the two preferred bidders for the project’s competitive phase would now develop upgrades. However, the MoD were unable to provide us with any information on the number of tanks that would be upgraded, as this would depend on both the solutions presented by the bidders and lessons identified by the Strike Experimentation Group.270

135.The Warrior Infantry Fighting Vehicle provides protection and support to infantry soldiers on foot.271 In combination, the Warrior and its infantry personnel form a tightly integrated unit. These vehicles are currently part of a programme, Armoured Infantry 2026, which is tasked with the delivery of an upgraded vehicle platform, and extending the out-of-service date from 2025 to 2040. The Warrior Capability Sustainment Programme element of this is expected to cost some £1.3 billion.272

136.The Army’s Warrior fleet (including all variants) stands at 769. As with the Challenger 2 life extension programme, the MoD was unable to provide an estimate of upgraded Warrior Infantry Fighting Vehicles which the Armoured Infantry 2026 programme would deliver as, again, this was subject to assessment and consultation.

137.Equally, the MoD refused to provide, us with information on the numbers of Challenger 2 tanks and Warrior vehicles held at specific levels of readiness—as to do so, they contended, would “compromise operational security, or would be likely to prejudice the capability, effectiveness or security of the Armed Forces”.273

Mechanised Infantry Vehicle and Multi-Role Vehicle (Protected)

138.The Mechanised Infantry Vehicle (MIV) is a new programme which was announced in SDSR 2015.274 It is currently in ‘concept’ pre-design phase, but the MoD’s intention is to procure an off-the-shelf design which would be equipped with a minimum number of UK sourced sub-systems such as remote weapons station, communications, battle management system and seating.275 The MIV will equip the mechanised infantry within the new Strike Brigades. According to Jane’s Defence Weekly, it is expected that the MoD will buy between 300 and 350 MIVs with a potential initial operating capability in 2023. However, as the project is in ‘concept’ pre-design phase, the MoD is unable to provide costings for the programme.276

139.In addition, the MoD’s Equipment Plan, set out the requirements for a Multi-Role Vehicle (Protected) (MRV-P) to provide the Army with a family of adaptable, protected general purpose vehicles for command and logistics.277 Two classes of vehicle are required. MRV-P Group 1 will provide logistics, command and control, and liaison, while MRV-P Group 2 will provide specialist platforms, including Armoured Personnel Carriers (APCs) and protected ambulances.

140.In January 2017, it was confirmed that the Army had started negotiations to purchase the Oshkosh Joint Light Tactical Vehicle from the United States to fulfil the MRV-P Group 1 requirement.278 The expectation is that 750 such vehicles will be acquired. For MRV-P Group 2, which will require a larger platform, we understand that three potential suppliers remain in the competition. A contract is expected to be agreed within two years, and initially the Army is expected to buy 150 APCs and 80 ambulances, with this later rising to 300 of each if the money is available.279

Delivery of the Army component of the equipment plan

141.In his Financial Statement of 8 July 2015, the then Chancellor, Rt Hon George Osborne MP, stated that the Government had committed to continue to meet the NATO minimum of 2% of GDP to be spent on defence.280 In addition, the Government committed to an annual real-terms increase in the defence budget of 0.5% until 2020–21 plus a 1% annual increase in the Defence Equipment Plan.281 Details of this can be found in our Report, Shifting the Goalposts? Defence expenditure and the 2% pledge.282 In addition, the Government established the Joint Security Fund (JSF) which could provide a further £3.5 billion to fund new defence and security capabilities.283 The MoD would have access to £2.1 billion of this money, over the current Parliament.284 However access to this additional funding would be dependent on the MoD realising ‘efficiency savings’.285 The SDSR stated that £11 billion of savings had been identified from within the MoD, the security agencies and counter-terrorism funding.286 In order to ensure the affordability of the Equipment Plan 2016–2026, the MoD would be required to achieve ‘efficiency savings’ of £7.3 billion (£5.8 billion from within the Equipment plan itself and £1.5 billion from elsewhere in the Defence budget).287 Together the MoD’s “growing budget”, the JSF and the savings are expected to fund, in full, the commitments contained in SDSR 2015, including the new Strike Brigades.288 In total, the MoD’s 2016 Equipment Plan commits £178 billion over the next decade, of which £19.1 billion is earmarked for land equipment which includes the programmes listed above.289

142.The Army is currently in the process of developing a series of ‘efficiency measures’.290 These measures will cover personnel, activity levels and support assumptions.291 Despite the increase in Departmental funding and the forecast ‘efficiency savings’, the NAO was highly cautious about the affordability of the Equipment Plan. It highlighted the fact that SDSR 2015 had added £24.4 billion of new commitments, the majority of which would need to be funded from within the existing plan.292 Indeed Army Command had seen a 21% increase in its equipment budget when compared to the 2015 plan, of which the Mechanised Infantry Vehicle was the largest new component.293

143.The NAO concluded that these new commitments had “considerably increased cost uncertainty in the Plan” and that the number of “immature cost estimates”—including those for the MIV—had increased and would be in need of future revision.294 Several of our witnesses highlighted the MoD’s poor record on controlling costs as a significant risk which could have implications for the delivery of equipment and capability.295 Sir Paul Newton also raised the concern that while the Levene reforms had delegated budget choices to front-line commanders, previous experience had shown that, if costs increased elsewhere in the Armed Forces, it was the Army’s budget that was raided in terms of its equipment plan and training.296

144.Lieutenant General Poffley maintained that the Army’s equipment plan was not only affordable, but offered the opportunity to upgrade equipment to meet the new challenges presented by technology:

There is therefore a very definite ambition there to adjust the force structure, to provide a degree of more choice going forward for political decision-makers. You would quite clearly expect us, I would hope, to exploit the very best technologies that are available at the time while making sure that is sustainable well into the future. There is a balance to be struck across the Army’s equipment programme that attends to that. Absolutely, this is as much about improvement as it is dealing with obsolescence.297

145.The Secretary of State considered the programme as “a mixture of investment in entirely new vehicles and equipment and an upgrade to some of the existing programmes”.298 The Army’s equipment programme was now intended to be part of restructuring Army 2020 to meet the re-emergence of the potential for state-on-state conflict as the main priority as well as being able to cope with other potential scenarios.299

146.We welcome the SDSR’s commitment to invest in the new AJAX vehicles and in the life extension of the Challenger Mark 2 as well as the upgrades to the Warrior vehicles and the Apache Attack Helicopters. Any reduction in the number of Challenger Mark 2 tanks would be fraught with risk. Therefore, we seek reassurance about the numbers of main battle tanks which will be retained. We believe that the challenge will be for the MoD, the Army and industry to ensure that these projects are delivered on time and within budget. The failure of previous programmes to achieve this must not be repeated. To do so will seriously impair, if not fatally undermine, the Army’s ability to deploy the SDSR’s envisaged warfighting division and the new Strike Brigades.

147.It is disturbing that the NAO highlights the fact that SDSR 2015 has added an additional £24.4 billion of new commitments to the MoD’s Equipment Plan. This includes the Army’s, as yet uncosted, programme for the new Mechanised Infantry Vehicle (MIV). The NAO concluded that these new commitments had “considerably increased cost uncertainty in the Plan” and that the number of “immature cost estimates” had increased and would be in need of future revision. In response to our Report the MoD must provide a clear statement that all of these programmes are affordable, in each financial year, alongside an assurance that funding for personnel and training will not be used to address shortfalls. The MoD should also set out how the new Mechanised Infantry Vehicle will be funded and the impact it will have on existing projects.

246 Ministry of Defence (ARM0002)

247 Ministry of Defence (ARM0002)

248 Ministry of Defence (ARM0002)

249 Ministry of Defence press release, 11 July 2016, “MoD orders new fleet of cutting-edge Apache helicopters for the Army

250 Ministry of Defence, SDSR 2015 Fact Sheets, January 2016, p 12

251 Ministry of Defence (ARM0002)

252 Ministry of Defence (ARM0002)

253 Ministry of Defence (ARM0002)

254 The International Institute for Strategic Studies, The Military Balance 2017, February 2017, p 85

255 The International Institute for Strategic Studies, The Military Balance 2017, February 2017, p 85

256 Ministry of Defence (ARM0018)

257 Q3

258 Q3

259 Q63

260 Q64

261 Q70

262 Q3 and Q168; Ministry of Defence (ARM0002)

263 Q168

264 Q168

265 Q169

266 Q170

267 Ministry of Defence (ARM0018)

268 Ministry of Defence (ARM0018)

269 Ministry of Defence (ARM0018)

270 Ministry of Defence (ARM0018)

271 Ministry of Defence (ARM0018)

273 Ministry of Defence (ARM0018)

274 HM Government, National Security Strategy and Strategic Defence and Security Review 2015, Cm 9161, November 2015, para 4.48

275 Jane’s Defence Weekly, DVD 2016: Bidders line up for British Army’s MIV 8x8 requirement, 9 September 2016

277 Ministry of Defence, Equipment Plan 2016, January 2017, p22

278 Jane’s Defence Weekly, UK confirms FMS JLTV buy for MRV-P, 26 January 2017

279 Jane’s Defence Weekly, UK confirms FMS JLTV buy for MRV-P, 26 January 2017

280 HC Deb, 8 July 2015, col 337

281 HM Treasury, Spending Review and Autumn Statement 2015, Cm 9162, November 2015, para 1.72

282 Defence Committee, Second Report of Session 2015–16, Shifting the Goalposts? Defence Expenditure and the 2% pledge, HC 494

283 HM Treasury, Spending Review and Autumn Statement 2015, Cm 9162, November 2015, para 1.72

284 Ministry of Defence (ARM0015) (This was based on the assumption that the Parliament would last until 2020)

285 Ministry of Defence (ARM0015)

286 HM Government, National Security Strategy and Strategic Defence and Security Review 2015, Cm 9161, November 2015, para 7.6

287 National Audit Office, Ministry of Defence: The Equipment Plan 2016–2026, HC 914, January 2017, para 2.9

288 Ministry of Defence (ARM0015)

289 Ministry of Defence, Equipment Plan 2016, January 2017, p 22

290 Q284

291 Q284

292 National Audit Office, Ministry of Defence: The Equipment Plan 2016–2026, January 2017, HC 914, Summary, para 6

293 National Audit Office, Ministry of Defence: The Equipment Plan 2016–2026, January 2017, HC 914, Figure 5, p 19

294 National Audit Office, Ministry of Defence: The Equipment Plan 2016–2026, January 2017, HC 914, Summary, para 14

295 Q214

296 Q215

297 Q251

298 Q251

299 Qq257–258

28 April 2017