15 Oct 09. The BBC reported that the way the Ministry of Defence (MoD) buys new equipment is “unaffordable”, according to a new report. The review, commissioned by the MoD, said too many types of equipment were being ordered for too large a range of tasks at too high a specification. It found programmes are, on average, five years late into service, cost an extra £300m as a result and should be put at arms length from the MoD.
“The MoD accepted some of the findings and is working on “implementing them”. The report, written by former MoD adviser Bernard Gray, was commissioned last year to assess how best to reform the procurement process. It has called for systemic changes and improvements in the planning, management and delivery of equipment. We accept most of his recommendations and are getting on with implementing them.” Lord Drayson, Minister for Strategic Defence Acquisition Reform
Ian Godden, Secretary of the Defence Industries Council, welcomed the report, which he said highlighted the need to set clear industry budgets. “We don’t have a long-term view of what the budget should be, there are delays to programmes caused by that budget pressure which then compound themselves in future years and, by those delays, the cost of projects go up,” he said. “It is this overheating which is causing, in simplistic terms, a major mismatch between what is perceived to be needed versus what is actually achieved.”
Defence Secretary Bob Ainsworth acknowledged “problems” in the procurement process, but rejected calls for the Defence Equipment and Support (DE&S) group to contract out the acquisition of equipment.
He said: “The government has thought about this carefully, but we are not convinced that such a change would ultimately lead to better outcomes for the armed forces or defence generally.” The report stated: “The Ministry of Defence has a substantially overheated equipment programme, with too many types of equipment being ordered for too large a range of tasks at too high a specification.
“This programme is unaffordable on any likely projection of future budgets. The result is that programmes take significantly longer than originally estimated.”
The Armed Forces were “competing for scarce funding”, which meant there was “a systematic incentive to underestimate the likely cost of equipment”, the report added.
The findings come just a day after the government announced 500 more troops are likely to go to Afghanistan.
Welcoming the report, Lord Drayson, Minister for Strategic Defence said: “We accept most of his recommendations and are getting on with implementing them alongside broader work to develop a future strategy for Defence Acquisition.”