Defence procurement is some of the most complex in government, but our defence and security industrial strategy represents a step change that will see industry, Government and academia working closer together, while fundamentally reforming regulations to improve the speed of acquisition and to incentivise innovation and productivity. Our acquisition reforms will drive pace and agility into procurement to improve delivery.
I very much agree with the Secretary of State on the need for increased defence expenditure if we are to remain a tier 1 power. Nevertheless, in every one of the past 21 years, the National Audit Office and the Public Accounts Committee have criticised the MOD’s procurement of equipment, poor identification of military needs, poor quality of equipment, slow delivery of projects, an inability to control costs and a corporate culture too traditional and resistant to change. Those are just some of the criticisms. Does he agree that we need to put those issues right if we are to be a tier 1 power?
I absolutely agree. First, that is why for the second year in a row, and nearly for a third, under my stewardship the Ministry of Defence will come in on budget or under budget—the first time in decades—to make sure that we live within our means. Secondly, it is also important to point out that it is always a challenge for any Secretary of State for Defence that the Treasury likes to deal in one, two, three or four years. Some of the programmes we are talking about, such as the Type 31 or the future solid support ship, are decades-long, and in that long process of complexity, threat changes, technology changes and inflation changes, and indeed there are all the challenges around. If we are going to have Governments investing in long-term infrastructure, whether civil or military, it is important to understand that long-term investment has a different risk profile. If we do everything year by year, we will always end up in a similar position.
The Secretary of State will be aware of growing concerns about the impact of delays and the management of defence programmes on our defence readiness. What specifically is he doing to ensure that the UK will meet our UK NATO obligations in full?
We are still on track to maintain above 2% of GDP on defence spending, if that is the obligation to which the hon. Lady is referring. It is important, as colleagues have pointed out, to make sure we get good value for money. It is also important that we try to deliver on time. Some programmes are on time, and 85% of defence programmes do come on time—the major collaborative ones and the major complex ones over long terms are often the ones that cause us problems. We need to improve that and make sure we do not over-spec. We also need to make sure that, where possible, we collaborate and improve internal mechanisms that often hold things up.
The UK has some of the highest defence procurement standards in the world, and I am glad that the Government are seeking to drive them up still further under my right hon. Friend’s leadership. When co-operating with our international friends, allies and partners—particularly Ukraine—does he agree that it is vital that they have similar levels of transparency in their defence procurement to maintain public confidence and support for Ukraine?
It is important, across the international community, that the public get a sense of where all our donations are going and how they are being used. On a recent visit, I met Ukrainians and other international partners to ensure that we put in place some form of assurance, so that we know where what we are sending is going, because soon the public will rightly say, “What is happening to it?” It is also important to recognise, as Ukraine has shown, that supply chains, whether domestic or multinational, have to be supported to ensure that we can surge them at times of need, rather than having to blow the dust off them and it taking months or years to reopen them.
As the Secretary of State has indicated, Ukraine has made it graphically clear that long-term ordering is vital to the defence industry and to maintaining capacity in machinery and manpower. Does he therefore accept that the failure to place orders for new nuclear submarines between 2010 and 2016, even though there was a clear majority in the House for doing that, was a major strategic error?
I am grateful to the right hon. Gentleman. I will do a deal with him if he admits that that is not the only example: we have all made strategic errors in our defence policies in the last two decades, because the Treasury has worked in the short term, so we have hollowed out the company. Government after Government have wanted more but have not wanted to fund it—his Government were no different, as I know, because I was serving in the Army under them.
The Ajax programme has been so controversial that the Secretary of State personally commissioned an independent review by Clive Sheldon KC into the flow of information surrounding it. Has he yet received that report? When does he intend to publish it? Can he promise the House that he will do so in full and unredacted?
I am informed by the Minister for Defence Procurement that the report is coming imminently, which I hope means in a few weeks, not months. I will read it and then, of course, I will make sure that, at the very least, the findings are shared with the House. I am happy to have a discussion with the Defence Committee about how much we can share with it, subject to any security concerns.
The good news is that Ajax is now starting the next phase of trials. As I have always said, I am determined to fix that troubled programme. We are now on the way to getting it through the next most important trials, after its having passed its user viability trials up to Christmas. I am trying to fix that programme and get it delivered. At the same time, I am delighted to learn the lessons.
The MOD procured services to administer defence housing and accommodation. It is now more than a month since my urgent question, when the Minister for Defence Procurement said:
“VIVO, Amey and Pinnacle are, I know, in no doubt about Ministers’ profound dissatisfaction at their performance.”—[Official Report, 20 December 2022; Vol. 725, c. 144.]
Since then, there have been more cases of poor repair and poor service. Can the Secretary of State say, specifically with regard to defence accommodation, whether the procurement process is fit for purpose and whether he has confidence in the current providers?
It is a timely question from the hon. Gentleman. This weekend, I looked at the different options for finding compensation or recompense from the providers in the first place. I get a weekly update on individual cases and how many cases are in the queues. In some areas, they have made progress and their progress is comparable or better than the private sector, but there is still work to be done. I am most concerned about mould and dampness; we have seen some success around heating. We expect a better service, however, and the Minister for Defence Procurement meets the providers regularly. It is important to note that we will keep their contracts under review and, if we do not get a better standard, I will take other steps.
I call the shadow Minister.
The question asked by my hon. Friend the Member for Barnsley Central (Dan Jarvis) is a good one, because the Government’s failure on defence procurement is not limited to weapons and ammunition. We need only to speak to people in defence housing with leaky roofs, black mould and broken boilers to realise that defence procurement is failing the people who serve in our military and their families. Last year the MOD paid £144 million to private contractors to maintain service families’ accommodation, yet many homes are still awaiting repairs and not getting the service that they deserve. One of the Secretary of State’s Ministers has admitted that these contracts do not represent value for taxpayer money, so why did the MOD sign them in the first place, and when will he be able to tell all our troops that they have a home fit for heroes?
We always want our homes to be fit for the men and women of our armed forces. I distinctly remember my time in Germany, and indeed in the UK, when the service was in-house, and I can assure the hon. Gentleman that there were issues with living under a standard of home then, which in some cases were worse. We have been monitoring to make sure that we get these reports answered. It was interesting that the start point of some of the problems was a lack of manning of the helpline at the very beginning—people were ringing up at Christmas and almost no one was there—and then having to work through the whole process. We are trying to do more. We will hold the providers to account and take financial action or whatever against them if we have to do so; I am not shy about doing that. We will try to seek compensation for the people suffering and to improve what is happening. However, in some areas, waits over five days are getting better. That is the first point; we are getting closer.
I call the Scottish National party spokesperson.
Multiple major procurement projects for which the Submarine Delivery Agency is responsible are late or over budget, or often both. Taxpayers are used to the concept of bonuses, but in the real world these bonuses are linked to performance. Those same taxpayers are haemorrhaging billions of their hard-earned taxes on the demonstrable failures of the MOD, not least those of the SDA. How can the Secretary of State justify giving six-figure bonuses to executives of failing MOD agencies? On the eminently reasonable supposition that he cannot defend the indefensible, what will he do to rectify those incoherent remuneration packages going forward?
The payments represent a number of new appointments that we have made and that we are turning around the Submarine Delivery Agency to improve availability. One area of deep concern has been the consequences of the hollowing out over the decades of maintenance and the availability of dry docks and other things in places such as Devonport which allow us to make sure that submarines are maintained in time to achieve better availability. The work is going well. It is important sometimes to change the workforce and ensure that we get the best, capable people possible to turn things around. I am confident that the new team are able to do that, and I am looking forward to seeing the results.