Britain’s National Audit Office Focuses on Ministry of Defence Capability Delivery, Not Just Equipment

Having abandoned its equipment-focused annual reports on the Ministry of Defence’s Major Projects in 2015, the National Audit Office (NAO) – the parliamentary body tasked with auditing central government departments in the UK – has turned to the Ministry of Defence’s (MoD) success and shortcomings in its delivery of usable ‘capabilities’ that rely significantly but not exclusively on equipment. In simple English, the report explores whether the military can actually use as intended the kit it has received. Perhaps not surprisingly, the NAO finds that the MoD could and should do better, but it is also clear that the extant situation is not catastrophic.

The British Way

The UK’s system for arranging that equipment can be used effectively uses a framework that is now over 15 years old. Often referred to by its acronym of TEPIDOIL, it asserts that usable capability requires a combination of Training, Equipment, People, Infrastructure, Doctrine, Organisation, Information and Logistics. The need for Interoperability with other systems should also be taken into account. Together these form the Defence Lines of Development (DLoDs). Training, Infrastructure and Logistics often cost significant sums, whereas Doctrine, People and Organisation can present different managerial challenges. This ‘check list’ system was introduced in the UK after experiences at the beginning of the millennium with some equipment, including Apache helicopters, being delivered but not being usable for a protracted period of time. The UK system also specifies an individual within the eventual user organisation, a senior responsible owner (SRO), who is responsible for the timely delivery of the non-equipment DLoDs.

When a new category of equipment is accepted against a contract and handed to its military user, it is defined as ‘released to service’ which normally matches a declaration of Initial Operating Capability (IOC). This is easiest thought of as a point at which the equipment has met its requirements and the services can work out the use of the system in detail. That is followed by a declaration of Full Operating Capability (FOC) when (all) the planned capabilities of the system are supposedly deemed available.

The Report

Given its technical nature and absence of damning criticism, as well as the domination of the media by the coronavirus pandemic, it is not surprising that the NAO report has attracted little coverage in the mass media. However it contains some substantial messages about MoD management and performance.

One such conclusion is that managing the delivery of the DLoDs is complicated and, despite the availability of central guidance, the individual commands use different systems and report different information sets to Head Office. This includes different assessments of how the equipment line is advancing. This seemingly leaves the MoD struggling to include findings such as those that the NAO has offered in its own performance management reports.

The NAO offers a picture that can be regarded as a glass half full or half empty: of the 32 projects in the MoD’s Defence Major Projects Portfolio, 10 of these were a year late in reaching IOC and the main ascribed source of difficulties is, predictably, industry, particularly British industry when it has provided ‘late or faulty equipment delivery …. The suppliers involved in delivering these capabilities were predominantly a mix of UK firms and subsidiaries of non-UK companies’.

This should not be surprising in that domestic procurements often involve risky development work whereas things bought from overseas normally come from an established production line. The NAO does not explore whether the performance levels imposed on (and accepted by) UK suppliers were ever realistic.

Delays, Delays

Surprising to this author was that, while the average delay to IOC was 12 months, the average delay to FOC was even longer, at over two years. Some of this was down to already-apparent or emerging equipment problems (as with power generation on the Type 45) but the report points to wider issues including an MoD culture emphasising successful delivery and therefore premature acceptance and declaration of IOC.

In the case of the F-35, these factors were present as were shortcomings in the MoD’s own preparations. One of the eight case studies in the report covers the F-35 and contains negative points about the programme. To a certain extent this marks a break with the tradition in which the UK government has left criticism of the programme to the US authorities. After noting that IOC for the land-based aircraft was originally planned for the end of 2014, the report reads:

IOC (Land) was declared on 31 December 2018 with 67 exceptions against the intended milestone including: no availability of training simulators, issues with the global support solution and immature infrastructure delivery. As at February 2020, the project team had cleared 47 of the exceptions, although Air Command is clearing them more slowly than planned. The Department currently expects to deliver the promised F-35 Full Operating Capability requirements by 2023. (p. 23)

Beyond industrial performance, cash shortages are exposed as the other main source of delays: this can be expected to continue to feature, especially if the governmental and industrial system continues to give less than extensive attention to the eventual in-service costs of equipment from the very beginning of the acquisition process. The implicit recommendation in the report is that the MoD should either get more money or cut some programmes.

The report finds that the MoD has not appointed enough SROs and that they are often under-resourced, but it does not explore in any detail whether they have the powers needed to deliver their responsibilities. Delivery of the DLoDs, especially for innovative and novel projects, can involve everything from the recruitment and development of new sorts of service personnel, to doctrine writing and the arrangement of integrated logistics support. An SRO can monitor and encourage preparations in these areas but not arrange them.

The NAO’s recommendation is that the MoD Head Office be strengthened so that it can better monitor the performance of SROs; an alternative approach would be to make the SROs responsible primarily for reporting the timely delivery by others of TEPIDOIL upwards into Head Office. This would, however, require some assurance for SROs that their careers would not suffer if they passed up some shortcomings in their own commands.

The report, which should be an annual publication, is a welcome boost to transparency on UK defence management. The cost of the research is not revealed, nor is the time taken for its preparation, but the report did involve nine NAO staff and so clearly took a considerable effort.

However, the report arguably neglects the inherent technical and financial risks associated with ambitious development projects. The delivery of everything on time with all the DLoDs funded and in place would imply that the country’s armed forces would be receiving equipment defined with modest requirements and associated needs.

The scope for risky innovation would be very limited. To be able to optimise the MoD’s management of its entire capability development portfolio, a top-level MoD statement of risk appetite, endorsed by the whole of government, would be of great utility.

The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.