Defence: Procurement

Tuesday 25th January 2011 Lords Chamber

Question

14:56

Asked By

[Lord Lee of Trafford]

To ask Her Majesty’s Government what steps they are taking to improve the performance of defence procurement.

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)]

My Lords, we are continuing to implement the initiatives that were detailed in the strategy for acquisition reform that was published last year, and we have already put in place new measures such as increasing controls over the equipment plan and improving key acquisition skills. We continue to examine how we can further improve the effectiveness and efficiency of the acquisition system as part of the wider defence reform agenda.

[Lord Lee of Trafford]

My Lords, while we speak, contractors are poised to start scrapping the Nimrod fleet, a £4 billion investment that is equivalent to £60 for every man, woman and child in the country. The Permanent Secretary at the Treasury has now gone on record, stating that the MoD was out of control. While we obviously hope that the noble Lord, Lord Levene, and Bernard Gray in their work can manage to improve procurement at the MoD, do we politicians not have a responsibility, and is it not time that the major political parties came together and tried to agree a unified approach to defence spend to give the MoD a degree of certainty about funding and to enable proper long-term planning, thus avoiding the fiascos of the Harriers, the carriers and the Nimrods?

[Lord Astor of Hever]

My Lords, my noble friend makes an interesting point. Defence is hugely important. The more cross-party consensus that we can achieve, the better for our Armed Forces, their families and the defence industry. My door is always open to any Member of the House who has any concerns or observations.

[Lord West of Spithead]

My Lords, has the Treasury agreed to 2 per cent year-on year growth in the defence budget post-2015, as the Prime Minister indicated in the other place, to allow Vision 2020 to be met? If not, how on earth can we have a coherent procurement strategy?

[Lord Astor of Hever]

My Lords, we will have another defence review in 2015. Of course, the Prime Minister has said that there will need to be real-terms growth in the defence budget in the years beyond the current spending review to make Future Force 2020 affordable.

[Lord Touhig]

In a report published last month, the Public Accounts Committee in the other place concluded that the Ministry of Defence had failed to identify core spending priorities. This must have an adverse effect on procurement. When do the Government expect to develop and implement such a strategy?

[Lord Astor of Hever]

My Lords, my party was not in government for most of the time with which that report was involved, but I point out that we now have a Permanent Secretary who is proving to be a rigorous accounting officer. She has a very good working relationship with the Secretary of State and the Chief of the Defence Staff and is determined to get on top of the MoD’s financial situation.

[Lord Burnett]

My Lords, will my noble friend explain to the House the Government’s planned naval amphibious capability?

[Lord Astor of Hever]

My Lords, in future, we will be able to land and sustain a Royal Marine commando group of 1,500 to 1,800 personnel from a sea helicopter platform with protective vehicles, but we have reluctantly decided that one of the Bay class ships, the RFA “Largs Bay”, will have to be decommissioned.

[Lord Davies of Stamford]

My Lords, the tragedy of all this is that we needed, and continue to need, the Harriers, the carriers and the Nimrods. Can the Minister assure the House that this country can continue to meet its maritime surveillance obligations and its international obligations for search and rescue at sea in the absence of the Nimrods?

[Lord Astor of Hever]

My Lords, Ministers and service chiefs have made it very clear that the decision taken in the SDSR not to bring the Nimrod MRA4 into service was very difficult, but it will not be reversed and the dismantling process will be under way very soon. The severe financial pressures and the urgent need to bring the defence programme into balance meant that we could not retain all existing programmes. We will continue joint maritime patrol activities with our allies and ensure the integrity of the UK waters by utilising a range of other military assets. For security reasons, I cannot go into great detail about what those are.

[Lord Craig of Radley]

My Lords, in his report, Mr Bernard Gray talked about a 10-year run of figures from the Treasury against which the procurement processes could be planned. In view of what has been said about an increase in capabilities by 2020, those figures should indicate a rise in funding availability for those procurements. Do those figures yet exist?

[Lord Astor of Hever]

My Lords, as the noble and gallant Lord knows, Bernard Gray was appointed CDM last week. This is a very important step for the department; it is a sign of our commitment to drive through further change. The previous Government published the Gray review of acquisition, which examined the way in which new equipment is purchased for the Armed Forces. In February this year, the MoD published a strategy for acquisition reform that outlined a number of measures to improve defence acquisition. Implementation is going well and is now part of the wider defence reform agenda. A key part of the work is to look at how acquisition is managed and structured. We are looking at various operating models to determine the most efficient and effective way of designing our acquisition system.

[Lord Tunnicliffe]

My Lords, a National Audit Office report of 15 October last year, and the year before, found that Bernard Gray’s department was ever improving. Amyas Morse, head of the National Audit Office, said that,

“central departmental decisions were taken to balance the defence budget which had the effect of driving very significant additional cost and delay”.

The same report stated:

“The Strategic Defence and Security Review should provide an opportunity for the Department to re-balance its policy intent and the available funding”.

Can the Minister assure us that funding balances the policy intent in the SDSR and does not leave the great gap that many of the heavyweight newspapers are predicting?

[Lord Astor of Hever]

My Lords, the noble Lord is obviously referring to an article in the Daily Telegraph this morning. SDSR implementation work is ongoing and the MoD is also undertaking its annual planning round. This is used routinely to look forward over 10 years and ensure that the department’s commitments are in line with available resources. We keep under consideration at all times a range of options on future capabilities, but no final decisions have been made. Premature speculation is not helpful to that process, to our Armed Forces or to the defence industry.