Defence and Security Industrial Strategy

Meg Hillier Excerpts

Tuesday 23rd March 2021 Commons Chamber

[Mr Speaker]

I call the Chair of the Public Accounts Committee, Meg Hillier.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I welcome that we are getting more clarity on some of the issues around defence spending, and particularly the Minister’s bold statement that he wants to see us

“achieving real reform in how we procure.”

It would be great if we saw some of that go down to our SMEs. However, as he knows, the National Audit Office concluded in its recent report on the defence equipment plan that the Department

“continues to make over-optimistic and inconsistent judgements when forecasting costs.”

That information comes from the Department’s own cost assurance and analysis service. Can the Minister tell the House and the country what precisely he is going to do differently to ensure that procurement and cost management in the equipment plan is managed better? What precise actions is he going to take?

[Jeremy Quin]

I thank the hon. Lady’s Committee for its report in the summer, which was no holds barred; we have lessons to learn. We are endeavouring to ensure that we answer each of the points made in that report in turn and that we learn from the report and its findings. It is also important that we lay before the Committee an enhanced equipment plan. We are working on that right now. I think it is best that we do that properly, alongside the NAO, so that we work with it and make certain that we have a detailed plan that can be put out for scrutiny. We have that plan, but we need to make certain that the NAO is equally comfortable with it.

The hon. Lady will recognise that, in any organisation with 6,500 contracts, there are going to be ones where we run into problems—that is the experience of the commercial world as well as Government—but we need to do better. So we have enhanced the number of people who are trained to a very senior level in terms of commercial expertise in DE&S; as I say, that is going up to 200 by the end of this year. We are putting more emphasis on where we look at the centre at projects, rather than leaving it entirely with the TLBs. We will bring out up to 65 major projects—not necessarily on a financial basis; there can be some that are low in value but high risk in terms of delivery—starting from the centre, through the defence major projects initiative.

With the help of the Infrastructure and Projects Authority, for which I am grateful, I am reviewing our senior responsible officer structure, to make certain that our SROs, who do a good job but quite a lot of whom are quite stretched, have more individual responsibility and that people are all over the detail of their projects. I hope that in combination, alongside a reform of DSPCR in the single source contract regulations, we may be in a better place to not necessarily please the hon. Lady’s Committee but at least do our best to meet the requirements that it has set.