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Reflections on Stephen Lovegrove RUSI Speech Six Months On By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.




Given the respect that I have for the Royal United Services Institute I am sure that they will not mind my repeating the interesting lecture delivered to members by Permanent Secretary, Stephen Lovegrove on the 5th March this year under the heading ‘Managing the UK Ministry of Defence’. This is repeated in italics at the end of my comments:

I remind of the RUSI lecture not in order to question or indeed, open a new debate on what Mr. Lovegrove said, but instead to emphasise that another six months have passed since he gave the lecture and that, as far as I can see, too little progress has been made on the four drivers that he talked of in relation to MDP (Modernising Defence Programmes) review process.

Is what he said back in March still relevant today? Yes. What should we now make of MDP or should I say, the lack of it? Probably that a new defence strategy will be needed if whatever those at the highest level are failing to agree cannot be resolved. So, are we headed for yet another defence review process in 2019? Yes, we probably are. And what about the huge damage that all this is doing to the UK defence industry?

That in yet another very busy year for UK armed forces we have witnessed political arguments for strengthening defence further weakened by the failure of those in responsible positions to agree can hardly be argued. Political arguments in relation to defence are of course born out of sensible military based arguments. There is plenty of talk and lots of work going on behind closed doors but the bottom line is that there is very little to say. The nations drift on into the unknown and I am much afraid, defence along with it.

Six months ago in his RUSI lecture Stephen Lovegrove talked of there being four drivers in relation to MDP include, defence operating model, business and efficiency modernisation, commercial and industrial approach and finally, defence policy outputs and military capability. To say that no progress has been made would of course be wrong but since defence was effectively moved aside from the UK national security and defence review update it appears to have become stuck in a political quagmire.

There are many reasons for enhanced concern in relation to UK defence not least because a much watered down Modernising Defence Programmes (MDP) review, when and if it does appear after the part conference season and into the early winter period, is unlikely to contain any new or additional budget funding over and above what the Secretary of State has already secured for the Dreadnought programme.

As I have said several times before, unless and until the National Security Advisor, Sir Mark Sedwill feels able to advise the Prime Minister that more money needs to be spent on defence I fear that no amount of pleading by the incumbent Secretary of State for Defence will do anything more than fall on deaf ears. We will live to regret that.

What worries me most about the current state of impasse in defence though is not so much the debate, or lack of it, in relations to what it is that we need for the future in the face of increased risks that the UK might face in the event of a major escalation and confrontation between Russia and NATO, the increased threat of missile attacks, cyber and sabotage concerns, it is to me that the lack of strategic direction is playing into the hands of not only our would-be enemies but also our competitors.

For the past nine months, whilst we have been awaiting the outcome of MDP, the internal emphasis appears to have been how to reduce the MOD overspend which some have suggested is now as high as £21 billion on the current ten year Equipment Plan. In the meantime one may argue that the actual needs in relation to domestic defence have tended to be ignored.

The reality of this is that on the back of waiting for MDP to be formally agreed the MOD has chosen, wherever it could, to delay ordering new equipment. This is almost a repeat of what occurred when Philip Hammond was Secretary of State for Defence and with so much equipment ordering being pushed back, the underspend in each of three years was given back to the Treasury. The impact then, just as it is now of delaying contract awards on the UK defence industrial base has and is, to say the least, a very significant cause of concern and if that is so, the same must also be true for the thousands of small and medium sized companies involved in the supply chain.

None of this plays well to the ‘four drivers’ that the Permanent Secretary talked of in his speech to RUSI six months ago. Other alarming examples that have been the cause of much conversation this year have been the temporary suspension (since reversed) of the planned Type 31e frigate programme due seemingly to lack of bidders not to mention delays in ordering land equipment.

Mr. Lovegrove dutifully talked in his lecture about having a ‘commercial and industrial’ approach but somehow I do not interpret that reference today to be suggestive that he was showing an increased level of belief in retaining UK sovereign capability.

I and many others contributed earlier this year to the UK Prosperity Review, a review that the former Minister of State for Defence Procurement, Philip Dunne was asked to conduct by current Secretary of State for Defence, Gavin Williamson. Of course, although well received by the defence industry as a whole, the review which contained 41 recommendations of how defence could increase its already large contribution to UK prosperity including suggestions relating to embedding prosperity in procurements decision, building more agility in procurements and ensuring that the defence sector is well placed to leverage the huge technological change now taking place in the wider economy and so on, there has been an air of silence since.

Sound and well intentioned all of this particular review process was, in the absence of Cabinet Office, Treasury and MOD agreeing on MDP and making greater commitment to acceptance of the role that defence plays in the prosperity agenda, a review whose outcomes have been seen to be positive by those outside the MOD is probably going nowhere very slowly.

While our armed forces continue to do all that is asked of them as they always will and in the certain knowledge that the UK is now belatedly attempting to fill some of the defence gaps that have occurred we cannot afford to let the grass grow under our feet because of failure to agree future strategy and policy.

To my mind, if the National Security Advisor, Cabinet Office, Treasury and the MOD cannot agree on future defence discourse then we must disarm them and allow others to try. Security is one thing, defence is quite another. It is the latter that plays into what and where the UK wants to be in the post Brexit arena rather than the former.

This isn’t about a prize it is about what the UK needs in respect of future defence. Yes, defence needs to be affordable of course and wherever I go I am left in little doubt that industry is doing what it can to make itself more efficient.

That more can be done is not in doubt but the Government must realise that it is now damaging the defence industry by constraining it. The impact of the Single Source Regulations Office (SSRO) is but one example of where a huge obstacle to progress has been placed in the way of achieving greater efficiency.

Permanent Secretary Stephen Lovegrove RUSI Lecture – March 2018 

A lot has changed since 1975. Some of it even at the Ministry of Defence but plenty still holds true. In 1975 you invited one of my distinguished predecessors, Sir Michael Cary to this very hall to speak to you on exactly the same subject as I am speaking today and he told the audience that day that in a democracy the view of what can be afforded for defence as opposed to other claimants on resources should be in direct proportion to the threat. The current perception is at best somewhat dim. Today, I’d like to talk about the management of the MoD in that context shaping our capabilities in what is inevitably a resource constrained environment, but critically doing so against the contemporary threat rather than those threats that we might have found more familiar even if they were never comfortable. Everyone in defence, everyone in this room, knows how important it is that we get that right. But with claims on resources and attention as insistent today as they have ever been, it is vital that we engage not just our sector but as wide a public as we can reach, and today’s event is part — but only part — of that. Right now, of course the focus is clearly on the modernising defence programme that we announced in January and that will be the main topic of my remarks today. No doubt you will have many questions about it but I would be surprised if the first one was not: Why are we doing this again? 

In answering that let’s go back to the Strategic Defence and Security Review of 2015. You will remember that we identified four areas of challenge the evolution of extreme terrorism, the resurgence of state based threats including an increasingly assertive Russia and the irresponsibly dangerous activities of North Korea. The rapid advance of technology on all fronts and the erosion of the rules based international order. That analysis still stands and the SDSR was recognised as a strong review both here and overseas. But it is unarguable to me that the pace of change in the last three of these has quickened alarmingly. 

Two examples from last week alone President Putin’s State of the Nation address was a stark example of a darkening geopolitical picture replete with new and dangerous weaponry. While HMS Sutherland’s current deployment is a powerful reminder of the UK’s commitment to the principle of freedom of navigation. But a further development is that I think we are also seeing a radical and alarming co-mingling of all of those four elements which we did not see in 2015. There’s a cross contamination of risk which greatly magnifies the dangers which any one of them poses on its own. 

Examples we’re seeing regional powers developing nuclear capabilities with global reach for avowedly non-regional deterrence. We’re seeing the taboo on chemical weapons flouted more regularly than we have become been used to by rogue states today not to mention ongoing efforts by extremists to acquire chemical and biological weapons. We are seeing extremely sophisticated missile technology in the hands of non-state actors being used against national armed forces. We’re seeing proxy warfare, which of course has been with us forever, becoming though the new normal and deniability becoming the ‘standard modus operandi’.

We’re seeing the possibility of conventional defence platforms being severely compromised by new weapons systems. And finally we’re seeing cyber activity which is both difficult to attribute and much less easy to target than you and certainly I would expect state actors to demand. The comparatively indiscriminate damage caused by ‘NotPetya’ [cyber-attack] is a good recent example. In the words of January’s US defense strategy, the views of which we very much endorse in the UK, we now live in a multi polar environment subject to sweeping changes in instability and unpredictability. 

And I hope I am wrong but the long period of successful non-proliferation regimes the globe has enjoyed since the end of the Second World War looks to be in more danger than it ever has been and its impairment is unlikely to be reversible. Most of us in this room are well aware of that strategic landscape but a better and much wider understanding of it and the shifting challenges we face will allow us to make better choices over where we want to and need to invest. 

The national security capability review will give us a clearer up to-the-minute picture of the hazards we face and the vulnerabilities we need to address, which I’m sure will be read with great interest when it’s published and it needs to be debated widely. But we don’t need to wait that long to see what we have to do in defence. Given the challenges we’re facing some but by no means all financial delay is not an option. And globally we’re not the only ones to have reached that conclusion. A number of our allies have taken a good look at defence over the last couple of years. I’ve mentioned the United States already. But you could add France, Poland, Germany, Italy, Germany and Italy. And I’m not long back from India where I listened intently to the descriptions of their new Joint Armed Forces doctrine. These documents all have a couple of things in common. They all committed their countries to new capabilities in a change strategic landscape and they all recognised that regularly updating their strategic reviews is an inescapable consequence of the pace of events. As our French allies said in theirs late last year ‘the fast changing international context inevitably imposes timely reviews of our defence strategy’. I agree very strongly with that. Clearly we will need to avoid the danger of chopping and changing in a way that makes long term planning an impossibility. 

But nevertheless it points in two directions I think. Firstly, in the preference for investment in adaptable modular and ideally evergreen platforms, with organisational structures adapted to iterative approaches to capability development and secondly in taking a leaf from other countries books by cultivating a debate about the threat picture which is prior to an informed final choices on force structure and equipment. 

Which brings us to the Modernising Defence Programme (MDP). Looking at its force rounds in a little more detail: the first is the defence operating model, the second efficiency and business modernisation, the third are commercial and industrial approach and the fourth is defence policy outputs and military capability. The first three are essentially designed to reform the way that the department works, interacts with itself and its supplier base and to allow us to maximise benefit on behalf of the taxpayer and the armed forces. All strands must work to eradicate bureaucracy and risk avoidance all must look to boost coherence and speed and be responsive to the demands of the frontline.

To take these first three in turn the defence operating model. Since 2010 and Levene, we have been on a journey of delegation, one which I fully support and has brought immense strides in the effectiveness and accountability of the frontline. But the implementation of the Levine model however has not been perfect. While the frontline commanders have developed muscle mass, the centre has lost some. Jointery is overwhelmingly obviously the most important principle by which the services mount operations. But before we ever get to that point there are disjunctions and incongruities between the services that we simply cannot afford. 

The centre, a strong centre, is necessarily the answer to that. As envisaged in Levene, it needs to be strategic, fully knowledgeable and where necessary directive, we need the capability to husband and steward resources in accordance with the strategic picture developed by, working hand in glove with colleagues across the rest of Whitehall. At the moment the centre in my opinion is not consistent or uncompromising enough to do that and we cannot expect the single services and other top-level budget holders to do our job for us. 

We have bulked up our senior leadership in the centre and it is already paying dividends. A chief operating officer, who can sit on single service boards, building the inter-connective tissue and driving accountability. A chief information officer who can draw together the extremely complex and extremely expensive threads of our networks. Networks which can be both vulnerabilities and battle-winning capabilities. A director general of nuclear, who can holistically oversee the immense national endeavour of renewing our deterrent, both the weapons systems and the platforms as well as its protection. These are all important and necessary steps in improving the cohesion of UK defence and making sure that we place our resources where we need them, and you can expect further re-organisation in the department as the year progresses.

Number two: efficiency is clearly linked to the operating model as indeed are both number three, our commercial strand. I have been very honest in the past, that the department, like all Whitehall departments faces some extremely challenging efficiency targets – ones that stretch far into the future and demand of us a different way of meeting them. But we have to recognise that the efficiency campsite we inhabit at the moment has become too crowded and too untidy. At least four different efficiency programmes have been adopted by the department in the last eight years and the dangers of double counting and confusion are apparent on a daily basis. We need to urgently untangle those knots and own, right across defence, a consolidated and realistic picture of what we can do. I want that picture to be at the very edge of arduous and exacting. It must be to keep faith with the taxpayer. But I want it to be stable and consistent too. Capable of iterative but not unmanageable adjustment, with governments that is fit to the task. 

Our third strand commercial engagement sees our most important partners playing their part with defence equipment and support. We have much to do here: streamlining first our own processes so that the curse of contract adjustment is eliminated as much as possible and sustaining investment in important supply chains where we know that failure to do so will lose time, money, and the sovereign capability that we need. That is work for defence. But it is an obvious truism but no less true for all that, that we need our partners to work with us. We need radical and sustained improvements in productivity in some of our biggest facilities and projects. Improvements that only industry can deliver. 

We must not let monopoly/monopsony habits persist in our relationships. I want to be very clear, in the current climate overruns can only be met with cancellations somewhere else in the programme. Our suppliers need to be as committed and as imaginative to continuous improvement as we will demonstrate ourselves to be. I want a thriving British defence sector as much as they are achieving it requires nothing less. We also want to work more closely with industry in pursuit of increased export success, recognising the challenges of operating in a more complex competitive and ever-changing environment. Exports like conflict need to be a whole of government exercise, a partnership of government and industry. 

Finally strand four: defence policy outputs and military capability. In a sense this is the conventional extension of the work that we did under the national security capability review of last year identifying opportunities for modernising our military capability making defence better able to make a full and sustainable contribution to national security objectives. It is where the most difficult questions, separate from those relating to the reform of the department, must find their answers. 

Where are we placing our big bets? Surely it makes sense to concentrate on areas which play to the UK’s strengths — both traditional, of course– but emerging ones too, like laser and other directed energy weapons, cyber, both defensive and offensive — the latter to work as a weapon and as a deterrent — electronic warfare and simulated training techniques. Some of these choices are not going to be easy. I was going to plagiarise something that Professor Chalmers wrote earlier in the year but I thought it might be more honest just to quote him. ‘The more radical, he wrote, the commitment to the rapid fielding of new disruptive technologies, the less useful the traditional measures of military capability become as indicators of national military power. That statement is true and it begs the question I started with: How can we move the public debate towards such a frank and necessary recognition of threats and possibilities?  

I think it would help if we aren’t too prescriptive at the start of our discussion. That’s why our public debate is built into our programme. A programme, as the Secretary of State has said, is designed to deliver headline findings in time for the NATO summit in July. I want a wide and open consultation and mature conversations with the armed forces, with industry, with international partners, with defence commentators and with the public. Conversations which don’t shy away from the central questions of what we as the United Kingdom want from defence. As we embark on a new and different leg of our national journey. And that starts with the disciplined and informed conversation about what we want to defend against.

CHW (London – 17th September 2018)

Howard Wheeldon FRAeS

Wheeldon Strategic Advisory Ltd,

M: +44 7710 779785

Skype: chwheeldon





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