Ministry of Defence nuclear programme Contents

1Managing the Defence Nuclear Enterprise

1.On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Defence (the Department) on the management and challenges it faces across the programmes within the Nuclear Enterprise.1

2.The Defence Nuclear Enterprise (the Enterprise) includes the equipment, people and a network of around 75 programmes which need to come together provide a submarine-based nuclear deterrent. The Department forecasts it will spend £5.2 billion across the Enterprise in 2018–19, of which £1.8 billion is on procuring and supporting submarines, £1.4 billion on the missiles and warheads, and £220 million on managing the Enterprise. The Enterprise is overseen by the Defence Nuclear Organisation (DNO) within the Department, headed by Director General Nuclear. DNO was set up in 2016 as a single point of accountability for the Enterprise. It sponsors the Submarine Delivery Agency, which manages 51 contracts for procurement and support on behalf of the DNO and Royal Navy. A sub-committee of the National Security Council, a ministerial committee chaired by the Prime Minister, considers nuclear deterrence and security.2 In 2007, Parliament voted in favour of maintaining the nuclear deterrent, and in 2016, endorsed the decision to start construction of the Dreadnought class of nuclear submarines, which will come into service in the 2030s.3

Coordinating nuclear programmes

3.To provide a continuous at sea deterrent, the Department must effectively coordinate the various elements of the Enterprise, including four nuclear deterrent submarines (the Vanguard class), six attack submarines (the Astute class), an estimated 30,000 people and supporting infrastructure spread across 13 sites in the UK and one in the United States of America. There are also 201 active contracts, valued at £48.9 billion, covering the designing, building and maintenance of submarines, nuclear propulsion systems and warheads.4 The Department must also introduce new submarines when existing ones leave service, and sequence the use of its dock space between submarines needing maintaining and those to be stored for disposal.5

4.The scale, interdependencies and complexities of the Nuclear Enterprise create timetable risks across programmes. For example, the decision to refuel HMS Vanguard in 2014 fundamentally changed the parameters of the Department’s programme to upgrade and maintain its nuclear core production capability, leading to increased costs and the programme being reset.6 In addition, the Department has not met previous promises and past programmes have slipped. For example, all seven of the Department’s new attack submarines, the Astute class, were, or are expected to be, delivered late. The first three boats were an average of 19 months late, and the remaining four are 27 months behind schedule.7 There have also been delays to the construction of new propulsion production facilities and submarine dismantling programme. In 2009, we reported that the Department needed to bring into service its new Dreadnought class submarines by 2024, when the Vanguard class starts to leave service. The Department now expects to introduce the Dreadnought class from the early 2030s, and keep the Vanguard class operational for at least 37 years, 13 years longer than its design life.8 It told us that it had experienced some engineering and project control problems, and the challenge was to get to a mature design ready for production.9

5.The Department assured us that bringing together the nuclear functions into the Defence Nuclear Organisation was making a big difference in terms of better managing the interdependencies between various aspects as it felt the impact of poor progress could be properly assessed.10 Given the long timescales involved and the history of past delays on nuclear programmes, we consider transparency on progress is essential. The Department has indicated a series of delivery dates, which we have set out below:11

Milestones11

2018

Decision point on HMS Victorious refuel

2020

Devonport infrastructure plans complete

Early 2020s

Future warhead decision

2022

Final Trafalgar-class submarine leaves service

2023

Completion of disposal work on HMS Swiftsure

2024

Detailed plan for submarine dismantling complete

2024

Seventh and final Astute-class submarine in service

Early 2030s

First Dreadnought-class submarine enters service

Ensuring the right structures and skills

6.In 2008, the National Audit Office reported that the arrangements for overseeing the Enterprise were not effective. No single senior responsible owner (SRO) covered the whole Enterprise. Subsequently, the Department introduced a devolved model, with one team retaining control over significant nuclear programmes, and responsibility for the Dreadnought programme passing to Defence Equipment & Support, an executive agency of the Department. After 2014, the Department increasingly recognised the need to improve these governance arrangements.12 The Permanent Secretary told us the robustness of arrangements that had previously been in place could have been better and that developing and implementing plans for the introduction of the Defence Nuclear Organisation (DNO) and the Submarine Delivery Agency (SDA) took up much of his time when he was appointed in 2016. He was confident that the governance arrangements had been ‘seriously improved.’ In its report, the National Audit Office identified broadly positive initial feedback following creation of the SDA and DNO, although there remained lots to do. The Department told us it will continually review the effectiveness of arrangements, pointing to the example of the Defence Nuclear Enterprise Board, which had become unwieldy and has since been reformed.13

7.All aspects of the Enterprise require specialist skills and face continuing challenges in securing the required expertise, particularly nuclear and commercial, which is in short supply nationally. In January 2018, for example, the Department identified a shortage of 337 skilled personnel across seven nuclear specialisms. Since that point the Department said there had been improvements. Also, the Director General Nuclear told us that DNO had now filled 250 of its 300 posts, with a further 30 to be filled in the next four months. Its focus was now to strengthen the commercial team handling the Atomic Weapons Establishment. For SDA, there was a need for staff to manage supplier development and improvements to supply chain resilience. It is also looking to strengthen those teams which examine costs in detail, and is increasing its intake of graduates to 30 a year from September 2018, along with 10 apprentices.14 The Second Sea Lord told us that the situation in the Navy was improving as a result of initiatives to increase apprenticeships, train personnel more quickly, and invest in the submariner community to consolidate them around Faslane and the Clyde and to reduce the number leaving.15

8.Given the complexity of programmes across the Enterprise, the organisations involved need to have the right leadership. Director General Nuclear stated that finding the right people was the biggest risk to his programme, and the Chief Executive of the SDA also considered maintaining and growing the skills base were his biggest risks.16 In view of the long timescales involved in Enterprise programmes and the importance of close working between organisations and their senior personnel, we were concerned that performance might be affected by churn amongst senior staff. Witnesses agreed that future success required time and commitment and told us initial thought had been given to succession planning.17


1 Report by the Comptroller and Auditor General, The Defence Nuclear Enterprise: a landscape review, Session 2017–19, HC 1003, 22 May 2018

2 C&AG’s Report, paras 2.2, 2.10

3 C&AG’s Report, paras 1, 3, figure 9

4 C&AG’s Report, paras 1.18, 1.19, 3.12

5 C&AG’s Report, paras 3.29–3.35

6 Q 128

7 C&AG’s Report, para 3.32

8 C&AG’s Report, para 3.31

9 Q 6

10 Q 55

11 C&AG’s Report, para 1.5, figure 2; Qq 71, 74, 78, 79

12 C&AG’s Report, para 2.8

13 Q 90

14 C&AG’s Report, para 3.24, Qq 3–4, 8, 53

15 Qq 44–47

16 Qq 117–119

17 Qq 104–108




Published: 21 September 2018