A C-17 Globemaster plane, manufactured by Boeing

'Value for money' drives defence and security science policy

A Government White Paper on buying defence technology has come out in favour of competition in procurement, protected science and technology spending and promised new support for smaller contractors. It has been cautiously welcomed by industry but fiercely criticised by trade unions, who say it threatens skilled jobs in Britain.

The document, ‘National Security Through Technology’, was published on 2 February after a lengthy period of consultation. Developed jointly by the Ministry of Defence and the Home Office, it takes account of the increasing overlap between defence and security threats and sets out government policy on buying suitable technology, equipment and support.

One of the key elements of the policy is to achieve value for money; the joint ministerial foreword says: “We will use competition as our default position and ... look at the domestic and global defence and security market for products that are proven, that are reliable and that meet our current needs.”

Although immediately qualified by a commitment to protecting UK technical advantage where it is essential for national security, it is that intention to favour off-the-shelf products and open up procurement to international competition that is proving particularly controversial.

The Unite union described the move as “a stunning betrayal” of British manufacturing. National officer Ian Waddell said: “This government should be using procurement to support British companies. The defence industry provides highly skilled jobs and is hugely important to the economy.”

Prospect deputy general secretary Mike Clancy described the move as “an off-shore solution to a home-grown problem”, and questioned whether it really represented value for money. “What about maintenance, upgrades and spare parts, what about emergency deployments? The UK still needs its own defence manufacturing base.”

Exports would be hit too, said Clancy: “Why would foreign governments buy UK companies’ equipment if our own MOD has rejected it?”

Representing manufacturers and suppliers, trade group ADS was more measured in its response, with CEO Rees Ward hinting that the final document was a considerable improvement on earlier drafts.

Commenting specifically on the proposals for buying off the shelf, Ward said: “The Government has long espoused open competition as its main acquisition method and industry is comfortable with this approach. The question is how it is implemented in practice. The need to develop capability in the UK remains. Industry believes that each procurement should be evaluated against criteria which ensure that our Armed Forces’ needs are met and the value-for-money test includes the benefits to the economy as a whole rather than any narrower measure.”

Victor Chavez, chief executive of Thales UK, backed the use of competition and ‘off the shelf’ acquisition, but added that the Government must recognise the importance of UK-based systems integration skills and key technologies.

“On the ground in Afghanistan, both the military and the Exchequer have benefited from Thales UK’s ability to fit ‘military off the shelf’ solutions to UK forces’ needs.,” said Chavez. “Whether in armoured vehicles such as Mastiff or UAVs like the Hermes 450, recent experience demonstrates the feasibility of combining an international supply chain with domestic integration skills to deliver battle-winning capability. What matters to the soldier on the ground is not where a piece of kit was manufactured, but whether it delivers the capability he needs.”

One concern raised repeatedly during the consultation was the need for investment in defence science and technology, an area that has seen significant cuts. The Government is now promising to halt the decline and maintain science spending at a minimum of 1.2 per cent of the total MOD budget.

Other actions are intended to help smaller firms (SMEs) win defence and security business, and to support export activity.

The Minister for Defence Equipment Support and Technology, Peter Luff, said:

“Our Armed Forces must continue to have innovative, high-technology equipment to give them a battle-winning edge, so we will support the development of defence technology directly and protect the amount we spend. We are now close to achieving a sustainable and balanced budget for the first time in decades. This will mean we can start ordering new equipment with confidence and will help provide the clarity industry needs to invest in the right areas.

“We plan to spend over £150 billion on defence equipment over the next ten years. If we can save money and get the capability now rather than later, our budgets will go further and the country will be better defended.”

Further information
The White Paper can be downloaded from the MOD website.

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