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A Defence Industrial Policy Refresh – With No Additional Funding! By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.



Before I had the opportunity of reading the ‘refreshed’ defence industrial policy document one of my more respected colleagues told me that on first sight, it didn’t look that exciting – big on message, small on detail and with plenty of regurgitation.

Having now read the full document myself I would also subscribe to a similar view adding perhaps in respect of the title that, as I had always been taught that policy was born out of strategy as opposed to the other way round, this is a rather full policy document that appears to lack real strategy behind it. I would also question  why bring the document out on the 20th December when it would have received far more attention if published after January 2nd.

Of course, that may all seem a little unfair and it is perfectly true to say that there is plenty in the document which I might add, the new Secretary of State for Defence, Gavin Williamson, has put his name to in the Forward, that is worth commending. For instance:

“Growing the UK economic value of defence in a highly competitive global market requires us to be more flexible and adopt new ways of working with industry. I welcome the work within the Defence Growth Partnership and the Defence Suppliers Forum to improve overall sector productivity, build in exportability and the needs of international customers into future products and services, deliver new technology to market quickly and efficiently and implement competitiveness plans”.

“In promoting our vision of Global Britain, we continue to champion free, fair and responsible defence trade around the world, while strengthening industrial and technology links with allies and partners, consistent with our commitment to be “international by design”. The UK will remain an integral part of the European defence industrial and technological base and we will continue to work with Europe to protect our Nation’s security against a backdrop of increasing threats”.

“In implementing the Defence Industrial Policy, we want to work closely with industry, without detriment to our policy on fair and open competition. A stronger strategic dialogue and common purpose with businesses of all sizes is crucial to deliver the performance, productivity and innovation in Defence that are essential to our future success”.

I note that the word ‘prosperity agenda’ which had been used rather freely during the Cameron era of Government has effectively been replaced in this document with the words “Improving the way defence delivers wider economic and international value, and national security objectives”. That’s is all well and good but then the waffle begins as the document leads on to state that the policy to achieve this will be “.

The executive summary tells us that the desire is to help “UK industry in its plans to be internationally competitive, innovative and secure. Our policy to achieve this has a number of elements: – Reinforcing our commitment to competition and strategic choice in defence procurement and support as the best means of delivering value for money, innovation, opportunities for small and medium-sized enterprises (SMEs), and industrial competitiveness. We are revising our policy on intellectual property rights and promoting the use of open systems to this end.

– Encouraging defence industrial approaches which support modern deterrence, resilience and international influence, as we look forward to new capabilities we need over the next thirty years.

The rest is about being more flexible and open to a range of different models for working with business, working with the defence growth partnership (although no mention of funding it as the Government has other growth partnerships), maintaining strong support for defence exports (although no mention of the need to better understand that export customers want government to government partnerships and they also, in aircraft programmes for instance, need to be able to access and take full advantage of Roya Air Force training facilities, supporting the cross-government approach to industrial strategy (apart from rhetoric in respect of skills, innovation and investment in science and technology, what is this I wonder?) talking about competitive contracts in supply chains, new innovation models through the Defence Innovation Initiative, working with the Defence and Security Accelerator, UK defence Solutions Centre and so on and so forth.

While the Refreshing Defence Industrial Policy’ paper makes for an interesting read without a larger commitment by government to directly invest in research and technology development, commitment to supporting and enhancing sovereign capability and preparedness to take on more investment related risk I am fearful that it will not achieve the written objectives.

This is a Ministry of Defence paper of course and this means that from an export perspective it only really takes account of large military ships, aircraft and weapons. Other export related effort in respect of defence product is the responsibility of the Department for International Trade & Security Organisation (formally known as UKTI DSO and prior to this, DESO) which is not only undergoing a ‘radical’ shake up since the departure of its former head but is also seeing its budget further cut.

While I commend attempts by government to get the defence export organisation and the Defence Growth Partnership working more closely together I dislike positive rhetoric which in reality seeks to reduce the amount that government invests in defence related export support by pushing cost and risk onto the private sector.

As I have said, this is a very interesting and readable document and it says much and no one is doubting the sincerity of intention. But in getting there the lack of detail and intention leaves a lot to be desired. It is all too easy to say that red tape around intellectual property of equipment developed with the MOD will be slashed back but the reality is that you can probably only do this on ships such as the planned Type 31e frigate.

There is a lot of connection related to the National Shipbuilding Strategy is this document too and I am not that sure that I share the full intent and purpose. Overall, I see this ‘refresh’ document being clouded in smoke and mirrors. It talk much about what needs to be done and pretend direction but without funding and commitment I doubt that we will have moved on that much five years from now.

It does have its funny side too though. For instance, to imagine that the MOD could simplify long held complicated contractual practice that while driven by requirement and cost effectiveness are also driven by cash contraints and be flexible would surely be foolish. We have heard it all before of course and the lack of sincerity then as now remains the single most obstacle to progress.

Sure, we need to have a strong partnership for all aspect of defence between government and industry and we all agree on the need to strengthen and build on what we already have. The Defence Industrial policy refresh has much to commend it in that respect – it is just that I question the lack of sincerity.

We recognise too the vital importance of small and medium sized enterprises play within the context of defence and that they benefit most by having strong primes. Perhaps the message ought to be pay more attention and support to the top of the tree and the rest will just automatically follow.

CHW (London – 21st December 2017)

Howard Wheeldon FRAeS

Wheeldon Strategic Advisory Ltd,

M: +44 7710 779785

Skype: chwheeldon





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