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House of Commons Report reignites concerns over Typhoon Project

Trevor Taylor
Commentary, 15 April 2011
Aerospace, Air Power and Technology, Defence, Industries and Society, UK Defence Policy, Defence Management, Defence Policy, UK, UK Defence, Europe
The recent Public Accounts Committee report has raised further concerns over the performance of the Typhoon Project citing spares shortages and the lack of a national supply chain. In reality defence funding shortages and poor international contracting arrangements have also contributed. The Committee's proposal to enhance the power of the Senior Responsible Owner for Typhoon would have significant implications for the entire organisation of the Ministry of Defence.

Parts shortages affecting the RAF's ability to train pilots is the main headline from the Public Accounts Committee's report on the Management of the Typhoon Project, [1] which in turn builds on the National Audit Office report of March on the same subject.[2]

Elements of this issue have an extensive history, dating back to when cost increases from the development and production phase caused raiding from support funding in the Ministry of Defence's plans. More recently, however, the problems stem from three issues. 

The first is that there is not a national supply chain for many Typhoon parts and repairable parts with the businesses concerned being spread across the four partner states.  Some of these businesses have not performed well in terms of managing their own suppliers and delivering on time. A further relevant consideration is that the UK flies its aircraft proportionately more than any of its partners and thus its demand for support is higher.

A second consideration is that, in the hope of achieving economies of scale and so on in orders, many support requests go through an international governmental body, NETMA (NATO Eurofighter and Tornado Management Agency). This office has a reputation for being slow moving and bureaucratic, and also for not contracting in such a way that would incentivise suppliers to deliver on time.  Within the MoD, another international body, OCCAR (Organisation Conjointe de Coopération en matière d'Armement)appoints its staff on merit rather than according to any national representation/workshare arrangement and has a better reputation for professionalism in procurement.

With regard to these first two points, the MoD argues that reform is underway with regard to better contracting and quicker, on-time delivery of goods and repair services, and that performance is tangibly improving.

The third and final point is that the MoD's financial pressures have meant that only limited funding has been available to buy spares and that risks that more aircraft would not be needed operationally had to be tolerated.  One answer in the face of a sluggish supply chain is always to hold larger stocks but in current circumstances the MoD has been unable to prioritise money for Typhoon.

Balancing books

The MoD's well-known wider financial situation is that  commitments still exceed resources available at the same time as around 75 per cent of the budget is committed on contracts with employees and external suppliers.  Thus goods and services that are not obtained through extant long-term contracts are vulnerable across defence and orders for many Typhoon parts fall into this category.  Having aircrafts in service but not being able to arrange sufficient training is a case of incoherence in defence, which the Strategic Defence and Security Review at least implicitly recognised, indeed it indicated that situations similar to the Typhoon situation might persist until 2020.

A quietly radical proposal from both the NAO and the Public Accounts Committee is that the 'Senior Responsible Owner' (SRO) for Typhoonshould be given extensive powers including financial responsibilities so that he could control rather than just oversee all eight Lines of Development [3] needed for operational capability.  Currently the SRO for the project is from the Capability area situated in the Ministry rather than anyone from RAF Strike Command, but this could change under the Defence Reform programme. Any such an arrangement would on the face of it involve changes to the structure of the MoD's Top Level Budget system, perhaps push the MoD back towards the single service-based approach to defence management which it has been moving away from since 1981, and anyway be inadequate:  Typhoon cannot be managed without extensive reference to other systems including Tornado, perhaps in future the F.35, AWACs and other surveillance systems, and any Unmanned Combat Air Vehicle that the UK may acquire.  Apache also has air-to-ground capabilities that link to those of Typhoon.

Finally the press release for the PAC report included the excerpt that 'this pattern of decision-making is more about balancing the books in the short-term rather than ensuring value for money over time'.  However we can be confident that no one would howl louder than this committee if the MoD, or any other department of state, moderated its enthusiasm for balancing the books in the short term.

 

NOTES

1. House of Commons Committee on Public Accounts, Management of the Typhoon Project, Report with Evidence, London, The Stationery Office, 15 April 2011,

2. Comptroller & Auditor General, Ministry of Defence: Management of the Typhoon Project, London, National Audit Office, 2 March 2011, http://www.nao.org.uk/publications/1011/management_of_typhoon_project.aspx

3. The Defence Lines of Development (DLoDs) comprise Training, Equipment, People, Infrastructure, Doctrine, Organisation, Information and Logistics (TEPIDOIL).

Author

Trevor Taylor
Professorial Research Fellow, Defence, Industries and Society

Trevor Taylor is Professorial Research Fellow in Defence Management at RUSI, where he heads up a research programme in Defence,... read more

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