The Public Accounts Committee has published a report titled ‘Improving the performance of major defence equipment contracts’.
You can read the report by clicking here, but here’s the summary.
“There have been numerous reviews of defence procurement over the past 35 years, which have provided the Department with opportunities to take stock and learn from experience. We are therefore extremely disappointed and frustrated by the continued poor track record of the Department and its suppliers—including significant net delays of 21 years across the programmes most recently examined by the National Audit Office—and by wastage of taxpayers’ money running into the billions.
The Department is in a disadvantageous position because it relies on a limited specialist supplier base to meet its needs and at times lacks the skilled personnel to effectively manage the performance of these suppliers. Overall, we are very concerned that the Department—and ultimately the taxpayer—bears too much of the financial risks for failure.”
The report itself has a list of issues and recommendations, this one highlights that the Public Accounts Committee believe the Ministry of Defence do not ‘learn from mistakes’.
“The Department continually fails to learn from its mistakes. The Department has been delivering equipment programmes for decades and has overseen many expensive failures. There have been at least 13 formal reviews of defence procurement policy over the last 35 years which have provided the Department with opportunities to take stock and learn from experience.
We were therefore shocked to learn that the Department had only established a central register of learning from experience (LFE) in December 2020. Experience shows that there is a need for reflection and openness earlier in the process to avoid further catastrophes like Ajax.
This does not convince us that the Department aspires to achieve a radical step-change in performance. We are encouraged by the Department’s Strategic Partnering Programme (SPP) initiative launched in 2018 to transform its relationships with industry. We recognise its strategic intent, but are disappointed with its lack of ambition in forecasting only £160 million in savings over the next ten years—less than 0.1% of its forecast Equipment Plan spend.
The Department told us that it expects efficiencies to amount to hundreds of millions of pounds as the programme matures, but until it develops scalable plans and can clearly attribute improvements to its interventions, it is cautious about the scale of potential success.”
They recommend the following:
“The Department should provide the committee with a clear plan on how it will draw on LFE and how its SPP and associated initiatives will generate the level of savings that would be expected from work that is intended to transform the procurement of hundreds of billions of pounds of equipment.”