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Armed Forces: Procurement

Volume 703: debated on Monday 7 July 2008

asked Her Majesty’s Government:

What is their assessment of the efficacy of the defence procurement process.

My Lords, the defence procurement process provides our Armed Forces with the equipment and wider support that they need to conduct military operations worldwide. The department recognises that it must always continue to improve its performance, not least to reflect rapidly changing threats and the fast pace of technological change.

My Lords, I thank the Minister for that reply. In procurement for Afghanistan, why was there a shortage of helicopters and why were vehicles open to considerable danger? Is the position now satisfactorily sustained with regard not only to sufficient helicopters of each type but also to armoured vehicles that are resistant to roadside bombs?

My Lords, overall, we have spent £10 billion from the core budget on front-line equipment provision in the past three years. On top of that, £3.5 billion has been spent on urgent operational requirements. That has included upgrading our helicopters and making them safer, providing more protected vehicles and increasing protection for individuals. On helicopters, a number of initiatives have been taken. We are trying to concentrate one type of helicopter in one theatre in order to maximise what we can do and, over the past year, the number of flying hours of helicopters in Afghanistan has increased by 30 per cent. Improvements have been made. We have provided new types of protected vehicles, such as Mastiff, while others, such as Ridgeback, are on the way. It is not possible to protect all vehicles to the same extent and it is up to commanders on the ground to decide which kind of vehicle is appropriate for which operation.

My Lords, does my noble friend agree that, in the light of the recent French defence White Paper and President Sarkozy’s pronouncements on assuming the French presidency, there is enormous merit in co-ordinating defence procurement policy with our French colleagues and with others in the European Union the better to find savings and provide greater resources for British services?

My Lords, it is true that there is scope for co-operation on quite a number of projects. However, co-operation is not the universal answer, because it will work only if countries have similar requirements on similar timescales and have similar budgets available. We are co-operating with the United States and some of our European partners on a variety of projects but, as I say, it is not the universal answer.

My Lords, with the establishment of the shipbuilding joint venture, BAE is now increasingly the dominant supplier to all three services. While a prosperous and profitable BAE is in everybody’s interest and in the national interest, does the MoD operate any mechanism for some form of overriding financial rebate or similar, calculated on the totality of the huge annual overall MoD spend with BAE, as would apply in a similar private sector situation?

My Lords, we look at each contract separately. It is true that BAE has a significant role, not least because it has taken over some of the other companies, which were ripe for that at the time. We do not operate the overall approach described by the noble Lord, but significant improvements have been made in MoD assessment and its commercial position, not least by the appointment of the defence commercial director, which is a relatively new, but wise, development in the MoD.

My Lords, we very much welcome the signature last week on the order for the two new carriers. Can the Minister bring the House up to date on the progress of the Joint Strike Fighter? Is there any truth in reports that there are further delays?

My Lords, it is still early days for the Joint Strike Fighter. The STOVL version—the one in which we are interested—has made its first flight with a British pilot, although not in STOVL mode. Assessments are still going on. I have visited the people involved, who are making plans about production, but nothing is finalised and we will not have to make decisions until next year.

My Lords, I declare an interest as a non-executive director of VT Group. Can the Minister say whether there will be a further iteration of the defence industrial strategy brought in by her predecessor last year and, if so, when that might happen?

My Lords, the defence industrial strategy has been significant, not least in bringing about some of the changes that led to the formation of the VT Group in shipbuilding, which underpinned the carrier contract. We are pushing ahead with the defence industrial strategy mark 2, if you like. We have frequent discussions with industry about this and it is keen that we should not publish the strategy until we have completed the equipment examination that we are undertaking. However, we are not stopping work on this. We have had workshops with industry on such issues as the defence marketplace and operational sovereignty. The MoD and industry are working together closely in order to make our way forward to the publication of the new version.

My Lords, my noble friend said, when she answered a question about the Joint Strike Fighter, that it was “still early days”. I remember that in 2001 we came to an agreement with our friends in the United States to go ahead with the Joint Strike Fighter. Does not the phrase “still early days” for the project illustrate all too vividly the problem with defence procurement, which is the inordinate time that it takes to procure anything?

My Lords, I could not agree more. It takes an inordinate time to procure certain things, anyway. If you are talking about a new venture at the cutting edge of technological development, which the JSF certainly is, it is not surprising, once you get into the detail, that these things take so long. To the outsider, it is always amazing how long they take. The further you get inside, it is less surprising but still extremely frustrating. The time delays on a lot of decisions are among the problems that probably many occupants of my position have shared.