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Defence in the UK

I agree. The dangers inherent in that delay are very important. Some people made the point that the Vanguard submarines took only 14 years to procure, but what was missed by many people is that that did not include the time taken to do the initial concept work, and that can easily take three years. I spent 20 years working in the defence manufacturing industry, and I have been a member of project management teams on major defence platforms. I know only too well that current projects are far more complex than Vanguard was. We should also remember that safety and regulatory standards have been raised in the 25 years since Vanguard was procured. Because of my experience in defence industry and the time that I spent on the Public Accounts Committee, I am only too well aware that British defence procurement does not have a very good track record. Given the long time scales involved we do not always learn the lessons quickly enough for them to have an impact on our new projects. It is to be hoped that the replacement of Vanguard will not suffer from legacy problems, but will benefit from the new proposals in the defence industrial strategy. Our defence industry is in a period of tremendous change. In this climate, getting public sector procurement right is difficult. The defence industrial strategy has been a major step forward in redefining the relationship between the MOD and industry, and it will deliver huge benefits in getting the right product to the front line, on time and on budget, and in maintaining that product during its operational lifetime. I am old enough to remember the old relationship between the MOD and industry in the days of cost-plus. The MOD decided what it wanted and chose a supplier; the supplier told the MOD how much it would cost to build; the MOD sent in an auditor to check the costs, added a percentage for profit and that was the price that was paid: very cosy, but hardly cost-efficient and not value for money. So we moved on to fixed price contracts and competition, where suppliers were pitted against each other to deliver the product at the lowest possible cost. Yes, it drove the price down, but there was a danger that, to secure the contract, suppliers would have to accept prices below the cost of manufacture and risk being unable to sustain long-term production, or ratchet up the price for product support, leading to higher costs over the life of the product. That is why I welcomed the defence industrial strategy’s emphasis on a partnership approach and the recognition that there needed to be changes in the approach both of industry and of the MOD. The MOD needs to move to a through-life relationship with industry, to define a project not in terms of a product, but in terms of an outcome, and to have the ability to be flexible within a project to meet changing demands across a long life cycle. In my days on the Public Accounts Committee, time and again in our reports we highlighted a lack of project management skills in government, and nowhere was that more apparent than in the MOD’s major projects. Industry needs to change too. It has to stop looking at the MOD as a customer to squeeze cash out of or a source of easy money, and to start seeing it as a genuine partner. It has to be willing to share the benefits of lean manufacture and cost reductions in return for the security of a long-running relationship. None of this is rocket science, Mr. Deputy Speaker, and I could point you to an example in my own constituency where just such a partnering relationship exists—between the MOD, VT Shipbuilding and Fleet Support Ltd. Fleet Support delivers ship support and is seen by many to be the benchmark industry partner. It has developed an innovative joint working relationship with the MOD that has already delivered over £50 million of savings. VT Shipbuilding houses the UK’s most modern and productive shipbuilding facility. So we have the defence industrial strategy in action, delivering cost savings. Where might that be? It is at Portsmouth naval base—yet another reason it should remain open. As I said before, there is a litany of MOD major projects where we can see where it all went wrong, but I hope that we are starting to learn the lessons from past mistakes and I want to illustrate that briefly with an example—that of Bowman. I am sure that hon. Members will be aware of the Bowman system. It is not just a radio but a complete tactical system delivering secure digital voice communications. It is a complex and technically demanding programme, involving the conversion of some 15,700 land vehicles, 141 naval vessels and 60 helicopters, as well as training some 75,000 personnel. As a consequence it involves many different and complex interrelationships between stakeholders in the Department, the armed forces and industry. We can see in the recent report from the Public Accounts Committee where the Bowman procurement process went wrong. The summary to the report states:"““It is a complex and technically demanding programme and the MOD seriously under-estimated the challenges involved in both delivering it and sustaining it in service?." There then follows a litany of the failures: not surveying the state of the Army’s vehicle fleet; underestimating support costs; examples where the equipment met the requirements of the contract, but not of the user; and the failure to appoint a senior responsible officer right at the start with the responsibility, funding and authority to deliver the programme. Is it any wonder therefore that the development of Bowman suffered such serious delays? To be fair, in 2001 the MOD recognised that it was no good trying to patch things up with the original supplier and re-competed the contract, which was won by General Dynamics. That has proved to be a valuable partnership; indeed, it has been commended by the National Audit Office. Bowman is now delivering vital capabilities to soldiers on the ground. In a recent article in Jane’s Defence Weekly the NAO director Tim Banfield spoke about the Bowman programme. He put in a nutshell why we had so much difficulty with it. He said that it was a typical example of how the old-fashioned linear approach simply would not work in these days of rapid leaps in technology and the consequent changes in the needs of the user. He went on to say that because of the partnership working between the new contractor and the MOD integrated project team, Bowman, despite its ““long and troubled history? and the fact that it is ““still getting a bad press?, was"““actually delivering some really good and useful capability now?."