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The British Defence Review in an Age of AusterityAn indispensible and indepth analysis of the Government's Strategic Defence and Security Review.
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- The Battle to Reform
UK Defence
Acquisition 
By Bill Kincaid
Foreword by Lord Robertson of Port Ellen
Cartoons by Jim Potts
£20.00 (plus £5.00 P&P), 404 pages
ISBN: 0855161388
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Editorial
By Bill Kincaid23 Jun 2010
This edition will be my last as Editor. When I took over RUSI Defence Systems six years ago, I felt that major improvements were needed, and I believe some of what I wanted to do has been achieved. Nevertheless, some of my ambitions have never been fulfilled, but that may be righted with a new editor and new procedures.
I have spent more than 30 years in, or close to, MoD's acquisition world, first as an insider in both requirements and procurement, and latterly as a consultant, writer and editor. How much change has there been? I think even those people with the rosiest spectacles would agree that there has been less than had been hoped for, while others would say that, with the exception of the delivery of urgent operational requirements, the change in output of 'normal' procurement has been minimal. My own view tends very much towards the latter.
The Recent Past
MoD has generally been good at initiatives but has been bad at implementing them. Why is this? There are a number of reasons.
First, there has been a lack of continuous drive from the top. George Robertson drove Smart Procurement hard but left for NATO only a year or two later, while Lord Drayson similarly left a couple of years after pushing through the DIS. So the necessary drive has been in existence for only three or four years over the last thirteen.
Second, some senior officials have proved reluctant to move out of their comfort zones. Not surprisingly, those down the chain have taken the message that change is not a high priority. Always, of course, there are exceptions and there have been many who have done their best to move things forward, but they have had to swim against a strong tide. It needs something special to change culture and behaviours across the board. That 'something special' has been lacking.
Third, there are many problems within the acquisition system itself. I have written about them in my four books on the subject, and I don't intend to repeat that here. There is, however, one that is still not appreciated for the damage it does - Andrew Tyler's article in the RUSI Journal is proof of that - and this is the poor cost-estimation at the start of a project. Is that caused by incompetence? In some cases, perhaps. But as costs are always hugely under estimated, there must be a "conspiracy of optimism" to reduce costs to get projects into the funded programme. Once in without the necessary funds, cuts or delays have to be made as the costs grow, either to that project or to others. As this happens every year, it is hardly surprising that the whole equipment programme has become unaffordable. Whatever cuts or delays are made each year, the overall programme will continue to spiral back into unaffordability.
Where Are We Now?
It is to be hoped that the coming Defence Review will cut commitments to match the defence budget. But it probably won't. In that case, MoD will have to make very difficult decisions on what to cut, reduce and postpone. Among the many necessary actions required, there are two important, but unappreciated, things it must do.
The first is the elimination of waste within the current procurement system. In his report on acquisition, Bernard Gray said that 'frictional costs' due to systematic delay are in the range of £900M to £2.2Bn, and this is supported by work carried out by Professor David Kirkpatrick and reported in this issue. But that is only part of the waste within the procurement system. A decade ago, I estimated that total savings that could be made were in the ball park of £2Bn to £3Bn per year.
Bernard Gray's 'frictional' waste is due mainly to a culture of delay. In fact, most of the waste in acquisition is due to MoD culture in one form or another. Take the conflicting cultures in MoD: Dr Charles Kirke investigates them. This must have a cost.
A wasted billion or three is not trivial - £3Bn is half the annual spend on new equipment. The defence budget is unarguably too small for the defence commitments imposed by the Government, but if we waste such a significant proportion, without trying to reduce it, can we really be surprised?
What Do We Want?
However, as Dr Ted Bromund argues, reform is not enough to right the defence finances. We need to be much clearer about what we need. So, the second important, if unappreciated, action that must be taken is a much more ruthless examination of what we need. It is hoped that the Defence Review will do just that, but will it? Many requirements are accepted without full justification, andthese are often the biggest spenders. For example:
- Air Power. Just like attitudes to more tanks in the Cold War- "you know they make sense, just give us the money" - so aircraft have been justified more on emotional than factual grounds. Of course we need good aircraft, but "Watch my lips, 232" led to an over abundance of Typhoons. Similarly, do we really need the best, rather than the very good - and how does this translate into JSF? An attempt to justify this programme is made in this issue, but now read Norman Friedman's article on unmanned combat air vehicles. Still convinced?
- Aircraft Carriers. Given the above, and given that in any serious military operation the UK will only take part if the US is involved, do we really need very large carriers with JSF? Or should we be planning more for the future with smaller carriers armed perhaps with UCAVs and helicopters?
- Armoured Fighting Vehicles. The 30-year saga of failing to procure light armoured fighting vehicles (LAFVs) is disgraceful. No one has seemed to know what we need. As is pointed out in the section of LAFV procurement in this issue, we have squandered getting on for £1Bn without producing a single vehicle.
- Helicopters. Helicopter numbers have been a major issue of late. But even if we had markedly increased numbers in Afghanistan some years ago, would we have been clear as to what to buy and from where? The helicopter programme has been in serious muddle, as Sir Jeremy Blackham discusses in respect of the latest decision on the new search and rescue helicopter.
New Capabilities
In addition to not knowing our minds on traditional equipment, we are very poor at getting to grips with new types of weapon systems. Unmanned air vehicles (UAVs) are a case in point. The Royal Air Force has long seemed averse to the whole concept of UAVs - in the latest edition of Air and Space Power Doctrine, the few mentions of UAVs seem to have been put in as an afterthought.
Network-Enabled Capability (NEC) is another 'new' capability that we have long been uncomfortable with. We asked in a series of articles in last October's issue (and since continued) whether Digitisation is dead. Although the Chief of the General Staff expressed his interest in the debate, were others at the top interested? They should read the view from the Deputy Head of the NEC programme in MoD UK and then read the section, Has Digitisation Failed?, in last October's edition. In Germany the disinterest or lack of understanding seems similar, as Ina Wiesner reports.
Part of this may be due to the lamentable MoD record on research and technology (R&T) spending, which was halved during the 1990s and has reduced by at least as much over the last decade. This threatens to destroy our future capability.
The Defence Review
Our contention section looks at several acquisition issues that the Defence Review needs to focus on. Our experts are Graham Jordan (MoD's research record), Sir Jeremy Blackham (future consequences of today's decisions), Sir Brian Burridge (indigenous defence industrial capability), Chris Parry (a comprehensive approach to the maritime world), John Dowdy (ring-fencing the equipment programme) and David Shouesmith and Dean Gilmore (an integrated acquisition system). But of course, even if the new Government tackles these (and many other) important issues, it will all need implementing, which will not happen without some clear thinking and high pressure from on high. Are there lessons for us from the transformation of the Australian Army as described by Dr Andrew Davies?
The RUSI Acquisition Focus sets out its views on what MoD needs to do to reform equipment acquisition in a future dominated by tight finances. These actions will be vital, but MoD must then break its anaemic approach to implementation.
The Pace of Change
Despite the huge amount of activity within the MoD's acquisition system, the pace of change over the last ten years in terms of improved output has been disappointing to say the least. Although I have no intention of returning in any way to acquisition once I have retired this summer, what change would I see if I did in, say, ten years' time? There will of course be a bewildering array of new acronyms, new procedures and changed organisations. But will there be much improvement to the quality, timeliness and costeffectiveness of output? I hope so, but I wouldn't bet on it.
And on that pessimistic note, I wish all the best to those whose job it is to prove me wrong.
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