Defence Procurement

Defence procurement can provide a vital foundation to national heavy industry and job creation. Indeed, many of the press releases heard in the UK about vital defence projects will often list the number of jobs secured above the actual defence needs being met.

Despite the obvious advantages of a robust defence sector, however, this nation has suffered in recent decades from what appears to be a lack of general oversight in defence procurement. Shortages of spare parts have left some forces, such as the Challenger Main Battle Tanks, without sufficient spare parts to sustain lengthy deployments, whilst shortages of munitions have led to ignominious withdrawals from campaigns such as the intevention in Libya.

Developments under the current government have seen a welcome shift in the approach to the military, with increases in spending and an apparent willingness to greatly improve the nation’s defence.  The development of a new MoD department to oversee procurement generated little attention but also demonstrated a desire to improve the support process for the Armed Forces. It is important for the next few years that this apparatus be used to not only procure impressive big-ticket items such as the new supercarries, but to also invest in the support network below them. New ships look good, but without sufficient munitions to supply them they will be no more than paper tigers.

The loss of the Royal Ordnance Factories in 1987 saw defence procurement handed from a state-run enterprise into a more competetive private venture. It was hoped that healthy competition would make defence cheaper, and the technologies provided better, but much of the competition has been eclipsed inm the country as multiple defence companies have been consolidate into the great colossus of British Aerospace Engineering (BAE).

BAE domninate government orders inthe country, and indeed rank highly among global defence firms, providing cutting edge technology and contributing in many multrinational projects but BAE, unlike such defence suppliers as Mitsubishi heavy industry, relies entirely on military orders to keep it running, whilst the MoD relies heavily on BAE to keep itself equipped. This vicious circle sees taxpayers money being used to largely sustain a privatised supply of military equipment. In a recent disclosure it appeared that the MoD had given BAE an extra £100 million on top of orders for OPVs in order to keep yards operational, to quote a Commons briefing paper:

“The provisional cost of the new vessels was given as £348 million but because the TOBA required a £230 million a year spend with BAE, the Defence Secretary estimated the additional cost to the MoD of the ships, over and above the payments the MoD would have had to have made to BAE, is less than £100 million… Philip Hammond, then Defence Secretary, admitted “we are effectively ordering the OPVs to soak up money we would have been paying in any case to have these yards stand idle.” *

Like the fabled military-industrial complex of the US, the British government has found itself bound to the fate of BAE – they cannot refuse to pay, as failing to support the yards would see the vast majority of defence support in the country go under, but they cannot afford to support buying more hardware. Whilst in the US the government are buying vehicles their military don’t need at the behest of private interest, the British government are selling ships they don’t have to in order to buy more.

A more competetive and free British military industry would obviously offer the government more options, whilst a more assertive state could likewise ensure its money was not being wasted. It is difficult to predict where the future of procurement will take us, but one should hope that whichever direction it is the needs of the nation are put first. As we separate from the European Union we can hope to see a greater level of investment in domestic capability – the enforced sale of HMS Invincible to be scrapped in Turkey rather than a British yard provides one example of how non-state intervention could damage our economy, whilst the closure of British steelyards due to lack of domestic orders should provide an example of what a lack of general industrial policy can do to a national economy.

It is easy to criticise procurement from the outside, espectially when it is linked to private interest, as stalled negotiations and endless teething problems with new technologies leave promising new designs firmly on the drawing board, but the British government in recent years is showing signs of progress. After the disastrous 2010 Defence Review the military has been hard pressed, but as several long-term plans have matured, and a new National Shipbuilding Strategycomes to the fore we do have reason to be hopeful.

A last concern in the field of defence procurement, however, is the increased focus on technologies: by emphasising the importance of technology one can be sure to get the best, but not the volume. As much of the press on new vehicles focusses on jobs, equally as much is focussed on advanced capability, but thiss comes at a cost. The Type-45 destroyers provide a perfect example; these ships are far and away some of the best in the world, but we only have six. With the multitude of commitments the Royal Navy has to meet, six surface combatants are far below th enumbers needed, especially at thier ticket cost – a £1 billion ship seems an unlikely choice for counter-piracy patrols, but at the current state the Royal Navy does not have any other units to use.

I do not mean to argue that ‘quantity has a quality all of its own’ but in military terms one should have some volume to forces. With only 19 surface combat ships, and fewer than half the number of tanks of nations like France, there is little room for losses in the British military. The tanks and ships may be the best in the world, but in war losses and accidents do occur, and you need substantial reserves to accomodate them. (We do not even have the means to build more Challengers any more). Likewise, by spending vast amounts on tnew echnologies you also have less money to retain service personnel; without people to man the ships they are just as useless as those with no munitions.

This piece is less a suggestion of how to address the problems than a series of thoughts on the dilemmas that face those in charge of procurement, I would welcome suggestions on how to address them, and any discussion that could arise.



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s