Ministry of Defence Procurement: Accountability

Lord Harlech Excerpts

Wednesday 29th March 2023 Lords Chamber

[Lord Harlech (Con)]

My Lords, I declare my interest as a serving Army reservist. The department does not waste money in delivering its procurement programme. All programmes have a senior responsible owner, accountable to Parliament. As accounting officer, the Permanent Secretary has responsibility for ensuring that the department’s activities represent value for money through a system of internal governance, approvals and delegations. Delivery agents also have processes for assurance of their programmes. The department drives a culture in which SROs and programme teams are confident in raising concerns at any stage.

[Lord Robathan (Con)]

My Lords, it is not my intention to make officials, serving officers or Ministers totally risk-averse or overcautious, or to destroy their reputations. However, as we know, somebody needs to be accountable, and I am glad to hear what my noble friend said. But let us home in on Ajax, which was ordered in 2010, under the last Labour Government. The first vehicles were expected in 2017, but they will now not be fully in service until 2029, and the NAO found that the MoD approach was “flawed from the start”. This is a long-standing problem across procurement. When will the Sheldon review into this be published, so that we can see how the mistakes were made? How many soldiers have been compensated for either hearing loss or vibration injuries from sitting in Ajax, and at what cost? How is the Ajax programme being rectified? Let us see who is accountable and who falls on their sword for this.

[Lord Harlech (Con)]

My Lords, the problems the Ajax programme has faced have long been acknowledged, but it is turning a corner and progressing towards the delivery of this new generation of armoured fighting vehicles for the British Army. The Statement to the House on 20 March set out the progress and outlined a new realistic schedule to bring this next generation of armoured fighting vehicle into service. Ajax remains at the heart of the Army’s plans for a modernised fleet of armoured vehicles. It is part of around £41 billion of investment that His Majesty’s Government are making into Army equipment and support over the next 10 years, to ensure that this nation can address threats of the future, not the past.

My noble friend asked a number of questions, so I will comment on Clive Sheldon KC’s review. Defence Ministers commissioned this independent review to identify lessons and make recommendations to help the MoD deliver major programmes more effectively in the future. The draft report is currently under the process of Maxwellisation and will be published as soon as possible.

[Baroness Smith of Newnham (LD)]

My Lords, in its Ministry of Defence: Departmental Overview 2021-22, the National Audit Office noted that, of major programmes, nine were rated red, 33 were amber and just three were green. Being rated red suggests that successful delivery is “unachievable”. Does the Minister think this is acceptable? Can he explain what is being done to rectify the situation?

[Lord Harlech (Con)]

My Lords, my interpretation of what red means differs somewhat. Defence proudly delivers some of the largest programmes across government. These processes are complex, and the delivery confidence assessments are an important tool to provide challenge and support for successful delivery. A project being rated red or amber does not necessarily mean that it will not be delivered on time or budget; it means that we have identified risks that need managing. We see this as effective programme management. The MoD will continue to introduce changes to improve our management of major projects.

[Lord Trefgarne (Con)]

My Lords, I declare an interest: I was the Defence Procurement Minister from 1986 to 1989. My worst moment was having to explain to my then right honourable friend the Prime Minister that we were about to cancel the AEW Nimrod—she was not amused. On the other side of the scale, we ordered the Challenger 2 tanks, which are now playing an important part in Ukraine.

[Lord Harlech (Con)]

I am pleased to say that Challenger 3, the main battle tank to replace Challenger 2, is proceeding according to plan.

[Lord Snape (Lab)]

My Lords, does the Minister accept that his initial response was somewhat flimsy, to say the least? Has he never read the Alan Clark Diaries? Mr Clark, who was an expert in procurement of one kind or another—

[Lord Snape (Lab)]

He wrote in his diaries that the procurement system in the Ministry of Defence was a complete shambles. Have we learned no lessons after 40 years? Have things improved since then? From the initial Question from the noble Lord opposite, it appears they have not.

[Lord Harlech (Con)]

The MoD reviews all its major projects and programmes regularly, providing both challenge and support to enable successful delivery. We aim to foster an environment of psychological safety, where SROs and programme teams are confident in raising issues at an early stage, so that they can be addressed in good time in the interests of successful delivery.

[Lord Soames of Fletching (Con)]

Does my noble friend agree with me that the AUKUS programme will place a considerable strain on the delivery times of the existing submarine programme? Does he also agree that the most rigorous accountability and management will be required to deliver this very welcome but onerous programme?

[Lord Harlech (Con)]

I agree with my noble friend on both points. On his second question, rigorous accountability and management will of course be critical to such a large-scale project. However, I see the AUKUS announcement as very good news, both in strengthening our ties with allies and partners and for the domestic defence industry in the United Kingdom.

[Lord Houghton of Richmond (CB)]

My Lords, the MoD is always an easy target for this sort of Question, so I will offer some balance. Some waste is undoubtedly both culpable and measurable; some waste is also defensible in the context of bringing into service small numbers of highly complex weapons systems. But how much waste derives from the inability of successive Governments to provide a long-term, stable settlement for defence, against which an affordable programme can be planned?

[Lord Harlech (Con)]

The noble and gallant Lord speaks from great experience in this subject. As the House will be aware, in response to the integrated review refresh there will be a £5 billion uplift over the next two years, of which £1.95 billion will be directed to help replenish stockpiles and to invest in wider resilience, and £3 billion is committed to modernise the UK’s nuclear enterprise for the next phase of the AUKUS programme.

[Lord Coaker (Lab)]

My Lords, the chair of the Defence Sub-Committee set up to look into defence procurement, Mark Francois, a Conservative MP, said:

“The Defence Committee has repeatedly questioned the Ministry of Defence’s woeful track record when it comes to procurement”.


What does the Minister say to his Conservative colleague?

[Lord Harlech (Con)]

I will have to take that offline with my honourable friend.

[Lord Lancaster of Kimbolton (Con)]

I offer some good news to your Lordships’ House. As noble Lords will be aware, we recently donated some AS-90 artillery pieces to Ukraine, and an announcement today from the Ministry of Defence states that, less than three months later, we have signed a memorandum of understanding with the Swedish Government for their replacement, the Archer artillery pieces, which will be in operational service by March 2024. That is less than 15 months after we donated the pieces. This is a clear demonstration of how we can learn lessons.

[Lord Harlech (Con)]

My noble friend is absolutely right. The purchase of the Archers from Sweden enables the UK to replace the AS-90s quickly, until the long-term Mobile Fires Platform delivers later this decade as part of the Future Soldier modernisation programme. Archer will contribute to the close support capability as part of our commitment to NATO. Recognising the need to sustain Ukraine’s fighting and support capabilities, the UK and Sweden have also agreed to collaborate on bringing together efforts for the repair and maintenance of vehicles granted in kind to Ukraine.