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The UK Government’s New Plan for Defence and Industry: A Fresh Approach to Procurement?

John Louth
Commentary, 2 February 2012
Defence, Industries and Society, Equipment and Acquisitions, Defence Management, Defence Policy, UK, UK Defence Policy, UK Defence, Europe
On 1 February 2012, the UK government published its long awaited on defence procurement. It sets a vision intending to reform Britain's fraught acquisition and procurement process, but the challenge will be at the implementation stage.

The UK Government's long awaited White Paper, National Security through Technology: Technology, Equipment and Support for UK Defence and Security, was finally released on 1 February 2011. RUSI will initiate detailed analysis of the White Paper through RUSI's Acquisition Focus Group in the forthcoming  issue of RUSI Defence Systems (due late February), together with commentary from the staff of RUSI's Defence, Industries and Society research programme.  Consequently, this short review merely hints at supposed highlights from the Government's report, suggesting the areas that will be subject to rigorous analysis and debate as stakeholders strive to implement the White Paper. 

Buying through Open Competition and Off-the-Shelf

Industry is used to selling its equipment and competencies to government through open competition so this is a well understood and expected component of the White Paper.  Also the Government's preference for purchasing equipment off-the-shelf, where possible, had been widely trailed prior to the White Paper's release.

The suggestion in the document that government will intervene to protect notions of sovereign capability and technological advantage drawn from the UK's defence industrial base is welcomed, and potentially offers a counterweight to its preferred off-the-shelf policy.  The test, of course, is how this policy stance is 'operationalised' in practice, especially if the MoD's Defence Equipment and Support (DE&S) is to be reformed to embrace some kind of strategic partner from the private sector.

Exports

The Paper, unsurprisingly, champions defence and security exports with this being one of the major 'takeaways' from government's consultation with industry prior to the White Paper's release.  Again, it will be important to see how this policy preference is exercised by the Government, especially as the UK exported in excess of £12bn worth of defence and security goods and services in 2010, with all the economic benefits to the UK that this implies.

Science and Technology

The Government's commitment to maintaining the science and technology element of the annual defence budget at 1.2 per cent suggests a recognition of the importance of science and technology to innovation and future defence capabilities.  How this fixed element plays into a balanced defence portfolio is yet to be seen.

Support to Small and Medium-sized Enterprises

The Paper goes to great lengths to stress the importance of the UK's Small and Medium-sized Enterprises SMEs) and their part in the country's defence and security effort.  Indeed, with more defence industry SMEs in this country than France, Germany, Spain and Italy combined, their economic significance is also critical to the government's plans to reduce the budget deficit.

Policies to reduce bureaucracy combined with specific measures to engage more SMEs through the procurement process have been well received by industrialists, and the government deserves some credit for focussing on this issue. The test, easily measurable, is whether more SMEs are contracted by MoD over, say, the next few years to 2015. How this policy ambition sits with DE&S reform also forms part of the calculation.

The White Paper, in conclusion, provides a useful summary of government's thinking towards defence and security industries and how capabilities can be nurtured, acquired and sustained. There is also a clear indication that government has responded well to an extensive and lengthy consultation with industry for which all parties are to be congratulated.

What comes next though - a detailed, coherent implementation plan embracing policy reform, significant procedural changes and profound structural transformation to the procurement function? It is hard to see a blueprint for that anywhere, least of all within the White Paper.   

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