Defence: Better Defence Acquisition

Lord Hamilton of Epsom Excerpts

Monday 10th June 2013 Lords Chamber

[Baroness Garden of Frognal]

My Lords, I encourage noble Lords to keep their questions brief. We have only 20 minutes and quite a few people want to speak.

[Lord Hamilton of Epsom]

My Lords, I very much welcome my noble friend’s Statement. GOCO will certainly introduce commercial disciplines and the incentives that can be provided by the private sector.

I have two questions for him. How long does he think these contracts will run for? How many years are we talking about? Will a GOCO address the question of the affordability of major projects? As we know, in the past we have seen enormous amounts of equipment ordered, particularly by the previous Government, although clearly there was not any money to pay for it. Will this introduction of a GOCO improve that situation in the future?

[Lord Astor of Hever]

My Lords, the answer to my noble friend’s first question is nine years. The answer to his second question is yes. We are determined. We feel that the discipline that will be brought in by a GOCO will make everything much more affordable and we will not have the kind of fantasy world that defence procurement has had in the past.

--- Later in debate ---

[Lord Astor of Hever]

My Lords, on the last point, I arranged a briefing—I am not sure whether the noble Baroness was there—at which the Minister for Defence Equipment, Support and Technology briefed noble Lords. He was hugely impressed by the depth of experience on all sides. He came to see me afterwards and asked if it would be possible to brief either individually or as a group. He is very keen to hear any suggestions and observations, and is aware that I am looking at noble Lords who have had huge responsibilities on this very subject in the past and know a great deal about it—a great deal more than I do. We are in the assessment phase. We are listening and learning and want to hear any suggestions. No decision will be made until next summer, so there is still plenty of time to hear what any noble Lord tells us.

Picking up on what the noble Baroness said, we obviously want to keep skills as far as possible and we feel that the GOCO would do that. We feel that of all the disciplines that it would bring to this, it would help to cut down the time taken for procurement. Taking the carriers as an example, with all the disciplines that it could bring, and being able to employ higher-paid people, it may be able to do things quicker. I do not want to take anything away from what DE&S has done—the noble Lord mentioned that—and I pay tribute to all the very hard-working civil servants and members of the Armed Forces who have worked there. However, they are constrained by Civil Service restrictions and we need to get more discipline and more incentive to get equipment for the Armed Forces quicker and more efficiently.

[Lord Hamilton of Epsom]

Following what the noble Baroness, Lady Symons, said, we are proposing a GOCO that may or may not turn out to be a monopoly. If it did turn out to be a monopoly, does my noble friend not agree that you are better off with a private sector monopoly than with a Civil Service one? Also, the prospect of competition being introduced after nine years will always be there, whatever happens to that GOCO.

[Lord Astor of Hever]

My Lords, we are talking about two things. We are talking about the GOCO but also a single-source regulation situation. We feel that the disciplines that we would place on the GOCO would ensure that there is not a monopoly.