Defence procurement in the spotlight

2 February 2010

2 February 2010 | Amy Rowe

The UK Ministry of Defence (MoD) must end its history of “shameful waste and delay” in procurement, a think tank has said.

Increasing competition and buying “off the shelf” are among the cost-cutting ideas highlighted by the Centre for Policy Studies (CPS) in its report More bang for the buck.

It comes as the MoD plans to publish tomorrow a green paper on defence spending, which is expected to address the £35 billion cost overruns on equipment projects.

In a foreword to the CPS report, former chief of the defence staff General Charles Guthrie called for an end to “cosy arrangements” with big contractors.

The MoD must recognise the limits of European defence integration in light of the “weak” outlook for future defence spending. Lessons from European collaborative projects, including the much-delayed type-45 destroyer (pictured), must also be learnt, the report said.

It called on the MoD to implement recommendations made in last year's Gray report, including holding routine strategic defence reviews.

“The ‘conspiracy of optimism’ must be tackled,” said Antonia Cox, financial analyst and author of the report. “The MoD, the military and industry over-order and under-cost in the knowledge that once in the equipment plan, cancellation of programmes is rare. The supply chain of major contractors must be opened up to bring in more innovation.”

The CPS criticisms echo those made by former defence secretary John Hutton at the Iraq inquiry last week. He said the MoD must learn from its mistakes.

Yesterday, air chief marshal Sir Jock Stirrup told the inquiry that the MoD has a lack of “short-term” agility in its equipment procurement and was not able to respond effectively to rapidly changing requirements.

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