Implications of the Ukraine War for UK Munitions Supply Arrangements

Finding the sweet spot: governments must balance requirements for munitions production in peacetime with the demands of a potential conflict. Image: nordroden / Adobe Stock

The situation in Ukraine has demonstrated the difficulty of balancing munitions requirements in peacetime with the need for large stocks and to surge production when conflict erupts. How the UK can best manage this equation in the future is unresolved but will likely involve extra costs.

Munitions – bullets, shells, bombs and missiles – are obvious needs of armed forces, but the awkward thing is that militaries need comparatively few of them in peacetime for training purposes. However, if a military conflict erupts, as the Ukraine war has underlined, they suddenly need them in very large numbers. An intermediate situation should be noted, when there is a hostile relationship between two governments: then, a government must judge how many munitions it needs to keep in stock, and what visible capacity should be available to enable deterrence of an adversary.

Anyone with defence ministerial responsibilities will need to take account of two further considerations. The first is the significant costs of both buying and safely storing munitions. The second is that munitions have a limited useful life since, over time, their chemicals and components deteriorate. After a period – normally around a decade – unused systems have to be safely disposed of. There is a bill for that activity as well. In brief, holding stocks is expensive, while not holding stocks is highly risky.

Moving into the supply chain, the more a government believes it can assuredly mobilise a supply base to boost production levels, the more comfortable it should feel about holding fewer stocks. But establishing an industrial capacity to surge production also carries costs for a capability that may never be called upon.

Added to this equation has been an increasing belief in the business world from the 1990s onwards that stocks in general are often a sizeable and unnecessary expense, and that ‘just in time’ rather than ‘just in case’ is the way to go. This definitely affected the appeal of holding stock in UK defence.

In the political realm, holding significant stocks may be unappealing because it implies that a government may not be able to prevent a war and can only aspire to reduce its negative consequences.

The more a government believes it can assuredly mobilise a supply base to boost production levels, the more comfortable it should feel about holding fewer stocks

Finally, in terms of the attributes of munitions that a government does choose to buy, it wants items that are militarily effective, for a reasonable price, and from an assured source that is unlikely to become unavailable at short notice.

The UK Response

Part of the UK response to these dilemmas is to conceal from potential adversaries the levels of stock that the Ministry of Defence (MoD) holds, thus injecting uncertainty into the calculations of such hostile forces.

One the industrial side, there is the Complex Weapons Portfolio – which, with an amended title, has operated since 2005. This is aimed at maintaining a UK capacity to design, develop, build, test and support a range of missiles through contracts with a team led by MBDA. Such missiles contain multiple components from extensive supply chains, and increasing production rates for a war would take time (years) to put in place.

The initial government-private sector answer to having an assured level of national supply of ‘simple’ munitions such as bullets and artillery shells was the 15-year MASS (Munitions Supply, Assured Solutions) contract with BAE Systems dating from 2008. The terms, scale and duration of this contract drove some investment in modernising numerous activities, including the automation of small arms production at Radway Green in Cheshire and the establishment of a new metal engineering plant in Washington, which opened in 2012. This arrangement had to deal with UK demands in Afghanistan.

The MASS contract was succeeded by another contract agreed in 2020, valued at £2.4 billion and again covering 15 years, which came into force at the beginning of 2023.

The Next Generation Munitions Solution (NGMS) will see BAE Systems manufacture 39 different munitions for the Royal Navy, Army, Royal Air Force and Strategic Command to use on the front line, including small arms ammunition, mortars, medium-calibre gun rounds and large-calibre artillery and tank shells.

Much of the government press release on the NGMS was devoted to its employment implications, but it also addressed BAE Systems’ investment commitments:

It pledges to invest more than £70 million refurbishing and upgrading manufacturing lines, including £32 million at Glascoed, £27 million at Washington and £12 million at Radway Green.

The company will also invest in the next generation by recruiting over 200 apprentices and graduates during the course of the contract.

The main role of these long-term agreements was to generate corporate investments that would drive down costs. The 2020 version also placed an emphasis on agility, pointing to the government’s ‘flexibility to vary the volume of orders and allow GM products to be added or removed, depending on front-line requirements’. However, the detail of any required capability to surge production levels is classified.

The NGMS Contract as Already Outdated?

The NGMS contract did not appear to anticipate the Ukraine conflict: the government information on the deal stressed ensuring the continuity of a skilled labour force and modernisation rather than expansion of production. However, it may have incorporated some lessons from Afghanistan, where UK ammunition consumption levels led to some shortages.

The financial appeal of automation investments depends significantly on the production volumes envisaged

In the longer term a revised agreement may be needed, but in the meantime, the MoD is relying on its wider relationship with BAE Systems. This can involve asking employees to work for longer hours and persuading the company to invest and work off-contract: it was reported in November 2022 that the MoD had asked BAE Systems to increase production of 155-mm shells. The words of the online report should be read with care:

London has issued a letter of intent to the British defence company, conveying that an order is imminent. The message gives the company confidence to start constructing new production lines.


It is too early to offer hard conclusions about the ammunition stocks that the UK and its allies should hold and the industrial capabilities that underpin such stocks. But two issues can be flagged up for sustained attention.

The first is the extent to which any UK answers should be knitted into wider European responses by NATO and EU members, some of which may be facilitated by the European Commission. The EU has already called for a million artillery rounds a year to be made available to Ukraine, and the UK could clearly contribute to this ambition. More generally, in a European deterrence or conflict scenario, there will be little point in the UK having extra ammunition provision if others have been less ambitious in their arrangements. Also, technical work will be needed to make sure that one country’s 155-mm ammunition can be safely and effectively fired from guns made by other states. Ammunition availability and interchangeability will not be a purely national matter.

The second matter is the extent to which investment money can also be used to reduce dependence on factory workforce size as a determinant of potential production and to fund the automation of production. Put simply, machines can switch from operating eight hours a day to 22 hours a day much more easily than human beings can. It is also true that, the simpler the product, the easier it is to automate its manufacture.

However, the financial appeal of automation investments depends significantly on the production volumes envisaged. Should the UK be looking at spending a large initial sum on a plant that could churn out 20,000 units a month but will normally only need to make 4,000 units a month? If it needs only a small labour force – thus having limited recurring costs – and can store long lead-time components at a modest expense, that initial investment could be viewed as a sound risk reduction measure. If such an approach appealed to the MoD, the Treasury would still have to be persuaded that the expenditure was worthwhile. These are matters for governmental rather than corporate choice.

The challenges of defence are unending, which is a source of interest for some but one of exasperation for those impatient for quick, authoritative answers. The Ukraine conflict has added the difficulties of making basic military goods to those of being able to develop laser weapons, stealth technologies, uncrewed systems and artificial intelligence tools. The outlook is one where munitions issues can be controlled and managed, but not absolutely ‘solved’.

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

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Trevor Taylor

Professorial Research Fellow

Defence, Industries and Society

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