Minister for Defence Procurement speech at Strategic Command Conference
Minister for Defence Procurement, James Cartlidge, delivered a speech on procurement reforms at the UK Strategic Command Annual Conference in London.
Ladies and gentlemen, this is the first speech I’ve made since Sunday, which was my anniversary as Minister of State for Defence Procurement. With one year in the job, I don’t know if I’ve actually achieved IOC, certainly not FOC, I imagine.
But with the help of Strategic Command, I’ve introduced a brand new procurement model which embodies both of them.
On the subject of procurement reform, I’m very conscious that I’ve caused many of you to have a busy start to the year and following our announcement this week to increase defence spending to 2.5% of GDP and increase support for Ukraine with additional half a billion pounds. It is going to get an awful lot busier. So I wanted to come here today to thank all of you in person, all the various parts of Strategic Command that have helped us to deliver our new pan-defence Integrated Procurement Model and our new Defence Drone Strategy, in particular, our capability directorates and our Integration Design Authority in Strat Com.
Now, whilst I know most of you are familiar with the fine print of these new strategies, and certainly should be, and the fact that we’ve committed to invest at least 4.6 billion pounds in uncrewed technologies over the next decade, and a further £325 million to deliver over 10,000 drones to Ukraine’s Armed Forces, I’m conscious not all of our international friends will be. And because our national security is built on our alliances, I want to give an overview of the changes we’ve enacted. And to respond to the inevitable commentary that we’ve heard it all before. That change won’t actually happen in practice. In fact, I’ve seen copious lists on previous procurement reforms listed on social media. The change is coming.
This is really what I want to stress. We are making tangible progress. I’m pleased to say that if we return to the specific promises I made, in my parliamentary statement on February the 28th, announcing our new Integrated Procurement Model, change is already happening. Indeed, it’s worth stressing, change was already happening before with rapid procurement into Ukraine from DE&S in Abbey Wood. More investment in our procurement people, that’s particularly our SROs. Another acronym, Senior Responsible Owners, for those who don’t know, and an overall reduction of one year procurement timelines, so good things were happening. But in my February statement, I acknowledged that the reputation of MOD procurement has been seriously damaged in recent years, by delays to high profile programmes such as Ajax, and actually many before that, and under successive governments. And above all, putting all that to one side, the reality is that our adversaries are progressing their technological development at such a pace that we have no choice but to reform procurement, or we will lose military competitiveness, the edge as you’re calling it today.
So in addressing that age old question in my February statement, how to reform defence procurement, I set out five key areas for actual change. First, to be more joined up.
We all know that we have and require an integrated concept of operations, that the modern battle space needs a multidomain approach where all our forces can talk to each other and share data and yet, till now, we have had a bottom up, delegated procurement model.
The challenge here is that when financial pressures arise, it becomes hard to deliver affordability, with the unintended and inadvertent consequence that results in single service competition, seeking to get programmes on contract, knowing that funding is constrained. This is what we call over-programming. It is, dare I say, the bête noire, of our procurement system, and is typically addressed by the very outcome we want to avoid, delay as programmes are inevitably shifted to the right.
So I set out and intend to deliver a more integrated approach. In my speech, I gave a very specific example of where this was already happening. And I quote, “a key example will be our pending munition strategy, a top priority given our need to replenish weapons stocks to warfighting levels, pan-defence prioritisation of munitions procurement will not only be driven by the hard reality of the greatest threats we face, but the scale of demand seeking required for always on production, the optimal outcome for both military and industry.”
So for those who are sceptical about our procurement reforms making an actual difference, fast forward to this week, and the Prime Minister confirm that our move to 2.5% on defence would enable an additional £10 billion over 10 years for munitions strategy, delivering the very always on production that I promised.
This strategy was developed with pan-defence prioritisation at its core, but its results will enhance the capabilities of each of our frontline commands.
Whatever our budget, 2.5% or more, we will always need to prioritise and prioritisation will always be challenging. Working in a joined-up fashion makes it much more deliverable.
The second priority of our new reforms is to introduce new checks and balances, guarding against the problems that have bedevilled past programmes. Strategic Command will have a particularly significant role here, with their Integration Design Authority now overseeing the procurement system. They will have a watchdog role, ensuring programmes are integrated where appropriate, in particular, a positive role to drive opportunities, such as ensuring programmes take advantage of AI. And of course, General Jim Hockenhull will say more on than that shortly.
But when it comes to new checks and balances, and I want to say you know, hand on heart, if you like, from my experience over this past year and someone who has seen the full gamut of procurement submissions from the department, if there is one element of the reform that could yet have the most telling impact, this is what I have termed the second opinion. This is about utilising the expertise we have in our enterprise to set up procurement programmes for success. From the outset, by properly kicking the tyres on requirements and challenging assumptions. Again, this is now underway. The nascent programmes will be standing up a new model where I receive independent advice direct to ministers to set alongside the military’s requirements. This will include the views on that programme of our Dstl scientists to ask those technological questions that our current system would not necessarily pose. Bearing in mind how the US have recently cancelled their FARA programme, future attack reconnaissance aircraft, dropping a crewed helicopter to consider an uncrewed version. This is where I would expect such questions of technological viability to be probed.
I also want this advice to include the clearest guidance from DE&S on industrial options, that key political question in many ways, whether to go off the shelf, sovereign, or somewhere in between, and crucially, in a system infamous for procuring the shiny platform without necessarily having a plan for the boring but essential enablers to go with it. This advice would include full transparency on costs, not just the estimated cost of the platform or capability itself, but all the enablers that go with it. If you’re buying a ship, you have to tell us if the dock needs to be bigger to accommodate it. We need to know.
The third priority is exportability. I want to strengthen the position of exportability and acquisition not just to boost industrial resilience, given the vulnerability of businesses that rely solely on the UK market, also because I believe consideration of international demand guards against what we call these overly bespoke requirements setting practices. I think actually the word we like in defence is ‘exquisite’. But I genuinely think that if you are prioritising exportability from the outset, you reduce the chance to be driven by these overly exquisite requirements. Again, we are now delivering that in practice. Our recent next stage of the new medium helicopter bid has given a strong weighting on exports. I want this to become the norm. And our reformed cross government defence exports committee, which sat again recently, has endorsed the process of internal change that will enable us across departments to ensure exportability is considered in depth from the outset with acquisition.
The fourth priority is to develop and procure the best kit and be more efficient, involving our partners from industry and capability design from day one. And we will build constant feedback loops with them so that they can make the most of our latest information from war-gaming exercises and the frontline, again, we are already delivering that practice with deep engagement with industry at secret, now commonplace, and there’s much more of that to come, I’m pleased to say.
And fifth and finally, we are wholeheartedly embracing spiral development. So that we get great kit into the hands of our service personnel as soon as it’s ready to have an impact on the battlefield, knowing that we can improve it further as requirements change and technologies advance. Again, change is happening in practice.
We’ve published our spiral development playbook for MOD personnel. And this stresses how our default approach is not just spiral, but instead of elaborate IOC and FOC, replacing them with minimum deployable capability. As I put it, basically in a nutshell, to the point where the equipment can be used if the balloon goes up. And once again, this is happening in practice. We recently announced the procurement of our ground-breaking DragonFire laser, by driving it to minimum deployable capability instead of IOC, FOC, very elaborate, we are knocking years off the procurement timeline and want it on our naval ships in 2027. Anyone who knows procurement in the MOD, that timeline, dare I say is the speed of light, literally.
But this is crucially about prioritising military risk against all the other considerations we face and maximising pace of delivery. And on the matter of pace in my February statement, I confirmed that our reformed procurement approach will set new timescales of three and five years for digital programmes and platforms respectively, and again, we are delivering in practice.
If Ukraine has shown us anything in the land domain, it is that artillery remains critical. In my February statement, I promised that our enduring mobile fires platform would be accelerated to ensure it fitted within the new five-year target. And I was therefore absolutely delighted that yesterday the Prime Minister and I were in Germany to confirm that we will be procuring the highly capable Boxer-based RCH 155. And aiming for this to be in service before the end of the decade and within the five-year timeframe.
Finally, I said in my February statement that drones would be a pipe cleaner for the Integrated Procurement Model. I set out in our Defence Drone Strategy, also in February, that I believed uncrewed systems with a future of mass in warfare, giving us a unique opportunity to augment and enhance existing capabilities and platforms and add new forms of strike ISR and lift capability in their own right.
So I was delighted that the Prime Minister put a big emphasis on science, innovation and R&D in his defence spending announcement earlier this week. And from next year, we will ring fence 5% of our defence budget for R&D. That will be a huge boost for those of you in this room, working to develop new capabilities. And with our new Defence Innovation Agency, I hope that this gives us the chance to bring greater cohesion to our R&D efforts. Because it’s brilliant news that this week we have heard £75 billion of extra funding for defence, but taxpayers will expect us to spend it as effectively as possible. That means procurement reform and it means ensuring more of our R&D spend actually leads to frontline capability being pulled through.
So ladies and gentlemen, the reforms that we’ve started are taking effect. Together with our new bigger defence budget, they can help the UK and our allies retain our military edge for years to come. With the right balance of capabilities, our advantage coming from technology, our mass coming from our alliances and uncrewed systems and our effectiveness coming from integration. We can maintain a world class fighting machine. This is an incredibly exciting prospect and I commend you for your work to build it.
Thank you very much.