Defence Modernisation Programme

Lord Campbell of Pittenweem Excerpts

Monday 29th January 2018 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, I thank the Minister for repeating the Statement, and perhaps I may be the first to congratulate him on his birthday. That is the charming bit over.

We welcome the decision to separate out the modernising defence programme from the national security capability review. That, frankly, is not much of a statement because anything has to be better than a Cabinet Office-led NSCR which is financially neutral. But this Statement reads as though one has had access to a whole series of other Statements, so I will confine myself to trying to understand the detail of what it sets out. Early on in the Statement it says:

“Following agreement of the high-level findings of the national security capability review”.


Are the high-level findings of that review already in the public domain? If not, can the noble Earl tell us what the other high-level findings of the review are? Have they been published, and if they have not, will he explain why we have heard about just one finding and not the whole suite?

Later in the Statement we are promised that the national security capability review will be published later in the spring. Seasons of the year can be variable in this place, so can I ask for an assurance from the Minister that we will have a precise definition of “spring”? This morning I took the trouble to google the word and you have two choices: meteorological spring ends on 31 May while astronomical spring ends on 21 June. I will settle for either date provided that we have a commitment that the review is going to be published. The reason I am looking for that assurance is that I think I have been told—I may be misquoting the noble Earl—in one of our many debates on defence that there would be the second annual report on SDR 2015 by the end of 2017. The end of 2017 was last month. Is there to be a second annual report on SDR 2015? If so, when?

Later in the Statement there is slipped in—“slipped in” is unfair, but it is towards the end of a long paragraph—the commitment:

“However, we must do more to ensure that we use our resources effectively and deliver the efficiencies that the department has committed to”.


What are those efficiencies? Are they the ones committed to in SDSR 2015? The noble Earl will know from our debates about defence, of which we have had several in recent months, that virtually nobody believes that such efficiencies are achievable. Indeed, in the areas that one has been able to measure, the reduction in resource has clearly stalled. What does the noble Earl mean by “efficiencies”? Having been in the efficiency business in my professional career, I define “efficiencies” as achieving the same with less resource or achieving more with the same resource. All too often in defence, “efficiencies” has meant cuts. Could we have a categorical assurance that these efficiencies genuinely will be about achieving more with less? If it really is about more with less, why, in the last seven years, have the Government not achieved those efficiencies anyway?

Later in the Statement, we are told that the “programme”—that is, the defence modernisation programme—

“will involve four strands of work”,

but it then goes on to define only one. What are the other three strands? It sounds very precise and as though there is a very clear plan behind the Statement. If there is, could it be revealed to us? The fourth strand is to look at what is required to contribute to the “three national security objectives”. I am sure that in the tons of paper that the MoD produces I could find what the three national security objectives are, but could the Minister enlighten us as to what the three national security objectives are that the fourth strand pursues?

Following the Statement in the other place there was a debate. Somewhere in that debate there was a commitment by the Government to deliver the report on the defence modernisation programme by the Summer Recess. Will the Minister restate that it will be delivered by the Summer Recess? Could he give us some feel as to the certainty of that, particularly given the failure to deliver previous reports by their due date?

I do not think that the Statement says anything about “financially neutral”, but in the debate that followed the Secretary of State for Defence said on at least four occasions that the defence modernisation review would not be financially neutral. I think he said it four times, but perhaps it was more often. Does “not financially neutral” mean that the Government have decided to provide more money for defence? Presumably “not financially neutral” does not mean that there will be even less money. I hope that is what it means, but could we have a straightforward yes or no answer: is more money to be found for defence? Whatever the answer to all these questions is, I have real trouble in my own mind understanding how a fiscally neutral NSCR will work with a not fiscally neutral defence modernisation review.

[Lord Campbell of Pittenweem (LD)]

My Lords, I join in the congratulations to the noble Earl on his birthday and thank him for repeating the Statement. He must feel, to some extent, that today is a rerun of the discussion we had last Monday. On these occasions tribute is often paid to the Armed Forces, but I have a question on that. What evidence is there of any impact on recruitment and retention as a result of the uncertainty that has surrounded these issues? I also remind the noble Earl that, as some of us in the House will remember, a lot of the language in the Statement is very similar to what we saw and heard in Options for Change and Frontline First. We know that the outcome of both exercises was a substantial reduction in defence expenditure and hence in capability as well.

There are only two passing references to NATO. I press the noble Earl on how far, and to what extent, interoperability with NATO and our other allies will lie at the very heart of the exercise it is now proposed to carry out. As has been said on a number of occasions in response to questions in the other place, the Secretary of State asserted that the exercise would not be fiscal-neutral. Last Monday the noble Earl rather adroitly avoided answering my question as to whether he agreed with the Secretary of State, and indeed the head of the Army, that more money needs to be spent on defence. I offer him another opportunity to answer that question and I hope he will forgive me if I ask: yes or no?

[Earl Howe]

My Lords, I thank both noble Lords for their good wishes. I will do my best to answer the questions that have been put to me. The noble Lord, Lord Tunnicliffe, asked about the findings of the NSCR. We are not making an announcement on those findings today. The NSCR is the report referred to that will be published in the spring. It will not be the early spring; I hope the noble Lord will allow me to leave the Government some flexibility on that matter, but our ambition is to publish the findings of the NSCR before what most people would regard as the summer. As for the annual report on the 2015 SDSR, which was indeed due at the end of last year, the noble Lord is right: publication has been slightly delayed. I hope it will be delayed for not too much longer but we remain committed to publishing the second annual report.

The noble Lord asked about efficiencies, as a number of noble and noble and gallant Lords have done in the past. In taking this work forward we will take all existing efficiencies into account and our targets for achieving further efficiencies. We will also look for opportunities to identify new efficiencies by understanding how the MoD can reduce duplication and adopt new approaches to delivering a more modern organisation. I am well aware that there is a great deal of scepticism around efficiencies. I endorse the noble Lord’s interpretation of the word: this is about finding savings that do not adversely affect defence outputs. We are very strict about that and if any noble Lord would like to quiz me further, I will be happy to answer.

He asked about the work strands of the MDP. I hope the timetable and detail of the work will emerge very soon. In essence, we are looking at a work strand that focuses on the MoD operating model and will deliver plans for a stronger and more capable head office.

Secondly, there is the efficiency programme and business modernisation. This consists of obtaining independent assurance over the existing efficiency plan, identifying any new savings deliverable through up-front investment and understanding how the MoD can reduce duplication and adopt new approaches to delivering a more modern organisation.

Thirdly, there is the work relating to our commercial and industrial partners: assessing how the MoD can improve on strategic supplier management, improve its commercial capability, and build on improvements to the performance of Defence Equipment and Support—DE&S. Those three work strands are already under way. There will be a continuation of those work programmes.

The fourth strand is, I am sure, the one that interests noble Lords the most. It is about defence policy, our outputs and our military capability. It is about analysing the global security context and implications for defence policy, understanding the relative priority of defence roles and tasks, and identifying opportunities—and, indeed, imperatives—for modernising capability, the workforce and force generation. I hope that gives a flavour of the four strands of work.

The noble Lord asked me to enlighten the House on the three national security objectives. To refresh the memories of noble Lords, as described in SDSR 2015, the first is,

“to protect our people—at home, in our Overseas Territories and abroad, and to protect our territory, economic security, infrastructure and way of life”.

The second is,

“to project our global influence—reducing the likelihood of threats materialising and affecting the UK, our interests, and those of our allies and partners”,

and the third is,

“to promote our prosperity—seizing opportunities, working innovatively and supporting UK industry”.

What confidence do the Government have that the MDP will be completed by the Summer Recess? We intend the MDP to be substantially complete by the Summer Recess. Our aim is to be in a position to share headline conclusions by that time and we are confident that we can achieve that. That means sharing as much as we possibly can with Parliament and with Heads of State and Ministers at the NATO summit.

I was asked by both noble Lords about the prospect of defence receiving more money. It is only fair that noble Lords do not press me too hard on this at this point but I will say that my right honourable friend the Secretary of State has been speaking regularly to the Chancellor since arriving at the Ministry of Defence. He will continue to do so as the MDP progresses, but let us put this question into its context. Against the backdrop of the increasing threats that the Statement refers to, this work is about ensuring that the Armed Forces have the capabilities they need to keep our nation safe. That is the objective. Given that, it is important that we maintain the dialogue that is already in train with the Chancellor. I will not pre-empt the results of the dialogue by plucking extra funding figures out of the air, but if we conclude that defence needs more money, we will have a very alive conversation with both my right honourable friend the Prime Minister and my right honourable friend the Chancellor.

The noble Lord, Lord Campbell, asked me a number of further questions. The first was about the effect on recruitment and retention. As I have said, any prolonged uncertainty is damaging and we have to acknowledge that. The recruitment and retention climate is difficult. It is difficult, however, to pinpoint a single reason for that. I think there are multiple reasons for it. What we will see over the next few months, however, is a much more inclusive dialogue about the programme as it goes forward. I hope that that effort in the direction of transparency will dispel a lot of the uncertainty that perhaps exists at the moment. My right honourable friend the Secretary of State is very clear about the outcome: he does not wish to do anything that will damage defence. It is important to restate that with regularity.

Interoperability with our NATO allies is certainly an important strand of our work, as it has been since 2015, when we articulated one of our overarching aims, which was to be “international by design”. That means not only working with our allies on training, strategy and doctrine but having equipment that is interoperable.

I hope I have answered noble Lords’ questions but I am happy to answer further questions.