Defence Industrial Strategy

Within an overarching dialogue about the role of defence in society, AUKUS offers an opportunity to demonstrate the more tangible benefits that a thriving defence industry can bring to local economies across the UK. Members of Parliament can play a key role in this messaging at constituency level, but our attempts to engage with the MOD to achieve this have so far been frustrated. In its response to this report, the MOD should set out how it will take a more proactive and open approach to wor...

Within an overarching dialogue about the role of defence in society, AUKUS offers an opportunity to demonstrate the more tangible benefits that a thriving defence industry can bring to local economies across the UK. Members of Parliament can play a …

There is an obvious alignment between the workstreams covered under Pillar 2 and the Defence Industrial Strategy’s themes of innovation, resilience and prosperity; and it offers clear opportunities for defence-related growth. However, the UK’s approach to Pillar 2 has so far been disjointed and has failed to fully exploit those opportunities. (Conclusion, Paragraph 140) 53

There is an obvious alignment between the workstreams covered under Pillar 2 and the Defence Industrial Strategy’s themes of innovation, resilience and prosperity; and it offers clear opportunities for defence-related growth. However, the UK’s approach to Pillar 2 has so …

The EU’s regrettable approach to the Security Action for Europe (SAFE) negotiations does not negate the need for improved UK-EU cooperation on defence industrial matters as a matter of strategic urgency. We therefore recommend the Government continue to seek a deal on cooperation under SAFE, provided the EU is willing to reconsider its financial demands. Given the strategic priority of closer UK cooperation with the EU on defence industrial matters, it should be clear with the public as to th...

The EU’s regrettable approach to the Security Action for Europe (SAFE) negotiations does not negate the need for improved UK-EU cooperation on defence industrial matters as a matter of strategic urgency. We therefore recommend the Government continue to seek a …

The UK is a key player in continued efforts to repel Russia’s invasion of Ukraine and to protect Europe’s security more broadly. Security Action for Europe, as a key EU programme aimed at improving the defence of the European continent, would clearly be more effective with greater involvement of Britain’s large and sophisticated defence industrial base. 88 This was highlighted explicitly as a priority in the new Security and Defence Partnership, and agreeing on greater UK involvement would se...

Why linked: Northern Ireland Affairs Committee on UK role in European security and EU Security Action for Europe programme — engages DIS export pillar.

The UK is a key player in continued efforts to repel Russia’s invasion of Ukraine and to protect Europe’s security more broadly. Security Action for Europe, as a key EU programme aimed at improving the defence of the European continent, …

With the UK now outside the Customs Union, the risk of future EU tariffs on British steel remains. The Government did not identify the issue of steel tariffs as a priority in its public communications on the “reset”, and it is not at all clear what, if anything, it proposed to the EU to address this matter comprehensively as part of the first UK-EU summit. Nonetheless, it is disappointing that, despite the positive momentum in the relationship, and the importance of a thriving metals sector t...

Why linked: Northern Ireland Affairs Committee finding on UK steel tariff risks — directly relevant to DIS supply-chain resilience pillar.

With the UK now outside the Customs Union, the risk of future EU tariffs on British steel remains. The Government did not identify the issue of steel tariffs as a priority in its public communications on the “reset”, and it …

Europe is over-reliant on US defence capabilities. Despite indications from successive US Presidents that Europe needs to step up, European NATO members have failed to invest in key strategic enablers. (Conclusion, Paragraph 14)

Europe is over-reliant on US defence capabilities. Despite indications from successive US Presidents that Europe needs to step up, European NATO members have failed to invest in key strategic enablers. (Conclusion, Paragraph 14) Type: conclusion | Number: 2 | Response …

It is not always clear how the UK’s many minilateral and bilateral defence relationships feed into the Government’s broader strategy or if the Department and Ministers have an assessment of their relative prioritisation. (Conclusion, Paragraph 47)

It is not always clear how the UK’s many minilateral and bilateral defence relationships feed into the Government’s broader strategy or if the Department and Ministers have an assessment of their relative prioritisation. (Conclusion, Paragraph 47) Type: conclusion | Number: …

The UK Government has endorsed greater EU-NATO working but should now identify specific measures through which it could best support the improvement of the relationship between the EU and NATO. This could include making it a discussion point in engagements with NATO and EU leaders and developing new ways of working (such as the sharing of classified information) with the European Commission that could potentially be adopted by NATO if successful. (Recommendation, Paragraph 66) Reforming the U...

The UK Government has endorsed greater EU-NATO working but should now identify specific measures through which it could best support the improvement of the relationship between the EU and NATO. This could include making it a discussion point in engagements …

Access to finance for defence industry is a significant issue as evidenced by the numerous publications and policy proposals from this year alone. We are frustrated that, given widespread recognition of the issue, no proposed solutions are likely to emerge before March 2026, with implementation likely to take much longer. The wider issues which face defence financing appear to be both myriad and complex. But Government ought to be able to identify which of these problems are specific to defen...

Access to finance for defence industry is a significant issue as evidenced by the numerous publications and policy proposals from this year alone. We are frustrated that, given widespread recognition of the issue, no proposed solutions are likely to emerge …

We are producing this Report prior to the publication of the Defence Investment Plan and as a result without the full picture of the future force posture. We timed this inquiry on the understanding that by now there would be an indication of broad prioritisation, if not specific investment decisions—because these hard choices were not in the published SDR and have not been announced since, we cannot examine them yet: we expect to do so as soon as possible. In order for the UK to play the appr...

Why linked: Defence Committee explanation that it is producing its Report prior to publication of the Defence Investment Plan.

We are producing this Report prior to the publication of the Defence Investment Plan and as a result without the full picture of the future force posture. We timed this inquiry on the understanding that by now there would be …

The defence industrial base has been subject to numerous reviews, plans and strategies, all of which have identified recommendations. However, many of those have only been partially implemented. Whilst the Government appears to be committed to solving some of the most intractable issues, it is too early at this point to judge the progress of these measures let alone their effectiveness. (Conclusion, Paragraph 84)

Why linked: Defence Committee observation that defence industrial base has been subject to numerous partially-implemented reviews and strategies.

The defence industrial base has been subject to numerous reviews, plans and strategies, all of which have identified recommendations. However, many of those have only been partially implemented. Whilst the Government appears to be committed to solving some of the …

There is widespread recognition of the need to address the issues facing defence industry. We welcome the expansion of the defence industrial base and the engagement of HM Treasury and the Department for Business and Trade in finding solutions. However, Ministers will need to closely monitor the implementation and effectiveness of the proposed policies, assisted by our scrutiny. This is an area of vital importance—delivery must be judged by outcomes, not simply changes to processes. (Conclusi...

Why linked: Defence Committee recognition of need to address issues facing defence industry, welcoming HMT and DBT engagement.

There is widespread recognition of the need to address the issues facing defence industry. We welcome the expansion of the defence industrial base and the engagement of HM Treasury and the Department for Business and Trade in finding solutions. However, …

The Government should measure, benchmark and publish the capacity of the defence industrial base, reporting actual numbers and percentage increases to Parliament on an annual basis as part of its resilience reporting. (Recommendation, Paragraph 93)

Why linked: Defence Committee recommendation to measure, benchmark and publish defence industrial base capacity annually.

The Government should measure, benchmark and publish the capacity of the defence industrial base, reporting actual numbers and percentage increases to Parliament on an annual basis as part of its resilience reporting. (Recommendation, Paragraph 93) Type: recommendation | Number: 24 …

We will ensure that our future examination of the thinking on capability and infrastructure requirements and the resultant force structure within the Defence Investment Plan will include scrutiny of the implications for defence of the UK and Overseas Territories. In addition, we will seek to establish how the decisions taken within the Defence Investment Plan contribute to the Home Defence Programme and the UK meeting its Article 3 commitments. (Conclusion, Paragraph 122)

Why linked: Defence Committee conclusion questioning MOD's ability to fulfil Article 3 NATO responsibilities — sharp scrutiny chip.

We will ensure that our future examination of the thinking on capability and infrastructure requirements and the resultant force structure within the Defence Investment Plan will include scrutiny of the implications for defence of the UK and Overseas Territories. In …

We recommend that the Government review the Defence Industrial Plan and the forthcoming Defence Investment Plan, in light of our recommendations and conclusions in this chapter. (Recommendation, Paragraph 22) Defending Europe in the near term

Why linked: Defence Committee recommendation that Government review the Defence Industrial Plan and forthcoming Defence Investment Plan together.

We recommend that the Government review the Defence Industrial Plan and the forthcoming Defence Investment Plan, in light of our recommendations and conclusions in this chapter. (Recommendation, Paragraph 22) Defending Europe in the near term Type: recommendation | Number: 6 …

We welcome cross-Government work on industrial resilience which we view as area of increasing importance. The measures proposed have the potential to strengthen the defence (and wider UK) industrial base if 60 implemented. However, we are disappointed that the Defence Industrial Strategy failed to recognise and address the threat of disruption from protest and sabotage. (Conclusion, Paragraph 104) Defending the homeland

Why linked: Defence Committee finding (November 2025) welcoming cross-government work on industrial resilience strengthening the defence industrial base — substantive committee position on DIS.

We welcome cross-Government work on industrial resilience which we view as area of increasing importance. The measures proposed have the potential to strengthen the defence (and wider UK) industrial base if 60 implemented. However, we are disappointed that the Defence …

The National Armaments Director is a key post for implementation of policy changes in both the SDR and the Defence Industrial Strategy. As such, we believe that the Department ought to prioritise his giving evidence to Parliament. We recommend that the Government ensure that he appears before us as soon as possible. (Recommendation, Paragraph 86)

Why linked: Defence Committee finding (November 2025) that the National Armaments Director post is key to DIS implementation — substantive committee scrutiny output on DIS delivery.

The National Armaments Director is a key post for implementation of policy changes in both the SDR and the Defence Industrial Strategy. As such, we believe that the Department ought to prioritise his giving evidence to Parliament. We recommend that …

Securing Scotland’s Future: Defence Skills and Jobs

Why linked: Scottish Affairs Committee inquiry written evidence on Defence Skills and Jobs in Scotland — direct DIS skills-pillar scrutiny.

The UK Government has committed to increase defence spending to 2.6% of GDP by 2027, with plans to reach 3% in the next Parliament. Given Scotland’s significant role in the UK’s defence sector, this inquiry will explore how Scotland’s economy …

It is vital that the UK approaches the EPD not merely as a trade arrangement, but as a component of an economic and foreign policy strategy focused on ensuring Western leadership in the face of global competition, particularly from China. This strategy should be shaped by three frameworks: a. the priorities for growing the eight strategic sectors identified in the Industrial Strategy and Trade strategy; b. the Defence Industrial Strategy, which as we have recommended must contain a clear defi...

It is vital that the UK approaches the EPD not merely as a trade arrangement, but as a component of an economic and foreign policy strategy focused on ensuring Western leadership in the face of global competition, particularly from China. …

Letter from the Secretaries of State for Business and Trade and for Defence relating to the Defence Industrial Strategy, 4 September 2025

Why linked: Joint letter from Secretaries of State for BT and Defence to the Defence Committee on DIS (September 2025) — substantive government correspondence on DIS at launch.

Direction: to_committee

The final lesson is the importance of having the industrial ability and capacity to sustain equipment if supply chains are disrupted. The Department said that this means making sure that the armed forces could continue to operate equipment, even if the UK’s allies have been disrupted for political or technical reasons.20 The Department regards factories as in effect being part of weapon systems because they are fundamental to the UK’s ability to fight and sustain its armed forces.21 The Depar...

The final lesson is the importance of having the industrial ability and capacity to sustain equipment if supply chains are disrupted. The Department said that this means making sure that the armed forces could continue to operate equipment, even if …

The Department explained that for the third segment, it has developed a process through its support for Ukraine whereby it provides industry with a problem statement and within a month gets proposals back from industry. It requires at least three proposals but often gets more than that, many 18 Q 39 19 Q 26 20 Q 26 21 Qq 26 and 41 22 Q 41 23 Q 22 11 from British small and medium-sized enterprises. The Department then uses experts to select the two best proposals, which are tested in the field...

The Department explained that for the third segment, it has developed a process through its support for Ukraine whereby it provides industry with a problem statement and within a month gets proposals back from industry. It requires at least three …

The Department has set the five-year target for programme length to stop the armed forces over-specifying their requirements.34 It said that the troubled Ajax programme, for example, had been tremendously over-specified.35 The Department anticipates it can achieve this target by involving industry in the procurement process much earlier.36 Instead of the armed forces developing a firm requirement then going to industry with it, the Department will state what the military capability problem is...

The Department has set the five-year target for programme length to stop the armed forces over-specifying their requirements.34 It said that the troubled Ajax programme, for example, had been tremendously over-specified.35 The Department anticipates it can achieve this target by …

The government launched the Strategic Defence Review (the SDR) in July 2024 and said it would publish it in the first half of 2025.41 The Department told us that the SDR would try to balance ambition and resource, but also chart the direction needed to respond to the current geopolitical situation and ensure that the UK has the armed forces it needs, both now and for the future.42 Five weeks after the Department’s oral evidence to us, it published the SDR on 2 June 2025.

The government launched the Strategic Defence Review (the SDR) in July 2024 and said it would publish it in the first half of 2025.41 The Department told us that the SDR would try to balance ambition and resource, but also …

The industrial strategy must clarify how the Government plans to balance any tensions between maximising the headline rate of growth, supporting new sectors and existing jobs in industry, and achieving its net zero, economic security and regional growth objectives. (Recommendation, Paragraph 30)

Why linked: Business and Trade Committee position on coordination between industrial strategy and trade strategy — relevant to DIS-DBT coordination.

The industrial strategy must clarify how the Government plans to balance any tensions between maximising the headline rate of growth, supporting new sectors and existing jobs in industry, and achieving its net zero, economic security and regional growth objectives. (Recommendation, …

Industrial strategy for clean power

Why linked: Business and Trade Committee inquiry on Industrial Strategy for Clean Power — adjacent industrial strategy framing.

Building on the evidence received in the previous Committee’s inquiry on Securing the domestic supply chain , the Committee will hold a one-off session on Industrial Strategy for Clean Power . The inquiry will explore the areas within the sector …

Industrial Strategy

Why linked: Business and Trade Committee Industrial Strategy inquiry — adjacent Modern Industrial Strategy scrutiny.

Our first industrial strategy inquiry will take a comprehensive look at the Government's proposals for a 10-year modern industrial strategy, as set out in Invest 2035. We will scrutinise the proposals in the Government’s Green Paper, and its forthcoming White …

We welcome the establishment of the Global Combat Air Programme (GCAP), which will be one of the UK’s most significant defence programmes over the next decade and beyond. If delivered as planned, GCAP will enable the UK to retain national sovereignty in combat air, providing a vital military capability in an increasingly volatile world. We also recognise the opportunities the programme brings to deepen the UK’s relationships with its allies and to shore up defence industrial capacity. (Conclu...

We welcome the establishment of the Global Combat Air Programme (GCAP), which will be one of the UK’s most significant defence programmes over the next decade and beyond. If delivered as planned, GCAP will enable the UK to retain national …

The Committee was greatly encouraged by Japan’s recognition of the importance of exports to their GCAP partners. Nonetheless, Japan’s inexperience as a defence exporter is likely to present unique challenges for GCAP which were not in evidence for Typhoon. The UK government must continue to support and encourage Japan in making the necessary legislative and industrial progress to ensure that the new GCAP fighter can be successfully exported. (Recommendation, Paragraph 56) Capability

The Committee was greatly encouraged by Japan’s recognition of the importance of exports to their GCAP partners. Nonetheless, Japan’s inexperience as a defence exporter is likely to present unique challenges for GCAP which were not in evidence for Typhoon. The …

The Hawk trainer aircraft has been a UK defence export success story, but with domestic production lines closing four years ago the skills and manufacturing capacity which had built up over decades will prove challenging and costly to regenerate. We recognise that innovative training solutions, including modular aircraft and synthetics, may offer new opportunities for industry; but we find the failure to capitalise on the success of Hawk remarkably short-sighted and deeply regrettable. (Concl...

The Hawk trainer aircraft has been a UK defence export success story, but with domestic production lines closing four years ago the skills and manufacturing capacity which had built up over decades will prove challenging and costly to regenerate. We …

Retention of the existing Typhoon manufacturing workforce, made more challenging by dwindling production runs and the gap until full-scale production of Tempest is underway, must be a priority; and securing further Typhoon export orders to ensure a consistent pipeline of production will be critical to achieving this goal. (Recommendation, Paragraph 92) 31

Retention of the existing Typhoon manufacturing workforce, made more challenging by dwindling production runs and the gap until full-scale production of Tempest is underway, must be a priority; and securing further Typhoon export orders to ensure a consistent pipeline of …

Uncertainty about the MoD’s future demand for equipment hinders its work with industry to develop a resilient, responsive, and cost-effective supply chain. Key lessons from the war in Ukraine include the need for the Armed Forces to invest in weapon stockpiles and ensure resilience and agility in sustaining military capabilities. The MoD has earmarked £5 billion during the decade to 2032–33 to do this, half of which is additional funding provided by the HM Treasury across 2023–24 and 2024–25....

Uncertainty about the MoD’s future demand for equipment hinders its work with industry to develop a resilient, responsive, and cost-effective supply chain. Key lessons from the war in Ukraine include the need for the Armed Forces to invest in weapon …

The MoD’s strategy for replacing ageing capabilities is undermined by the slow delivery of new systems, resulting in military capability gaps. Despite the MoD working with prime contractors to better understand its supply chain, increased international demand for key components and skilled workers has contributed to the slow delivery of defence equipment, including digital communications, armoured vehicles, and Royal Navy ships. For example, technical issues developing the state-of- the-art T...

The MoD’s strategy for replacing ageing capabilities is undermined by the slow delivery of new systems, resulting in military capability gaps. Despite the MoD working with prime contractors to better understand its supply chain, increased international demand for key components …

On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Defence (the MoD) on the Equipment Plan 2023–2033 (the Plan).2

On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Defence (the MoD) on the Equipment Plan 2023–2033 (the Plan).2 Type: conclusion | Number: 1 | Response status: not_accepted Government response: …

The MoD told us that if the government fulfils its commitment to spending 2.5% of Gross Domestic Product (GDP) each year on defence, the Plan could well be affordable.18 The current defence budget is 2.1% of GDP, which increases to 2.25% when the UK’s support for Ukraine is included. The MoD said that the difference between 2.25% and 2.5% of GDP is about £6 billion or £7 billion.19 However, the government will only increase non- Ukraine defence spending to 2.5% of GDP if fiscal and economic c...

The MoD told us that if the government fulfils its commitment to spending 2.5% of Gross Domestic Product (GDP) each year on defence, the Plan could well be affordable.18 The current defence budget is 2.1% of GDP, which increases to …

The Ministry of Defence (the MoD) is working with industry to develop a resilient, responsive, and cost-effective supply chain. For example, it told us that it has been working with the Defence Suppliers Forum, which covers about 80 companies directly and the whole supply chain through trade associations, to ensure that its suppliers are monitoring supply chain fragility. It has also worked with its prime contractors to get visibility of at least four levels down in its supply chain.42

The Ministry of Defence (the MoD) is working with industry to develop a resilient, responsive, and cost-effective supply chain. For example, it told us that it has been working with the Defence Suppliers Forum, which covers about 80 companies directly …

Key lessons from the war in Ukraine include the need for the Armed Forces to invest in weapon stockpiles and ensure resilience and agility in sustaining military capabilities.43 The MoD has earmarked £5 billion over the decade to 2032–33 to develop this, half of which is additional funding provided by HM Treasury in 2023–24 and 2024–25.44 The MoD has started using the new money from HM Treasury on both enhancing production capacity and working down through the supply chain to secure the suppl...

Key lessons from the war in Ukraine include the need for the Armed Forces to invest in weapon stockpiles and ensure resilience and agility in sustaining military capabilities.43 The MoD has earmarked £5 billion over the decade to 2032–33 to …

The MoD recognises that building capacity, including the industrial skills base, will take time, and that for industry to invest in this it must have confidence that the MoD’s demand will continue.46 For example, the MoD estimates that over the next 10 years industry probably needs an extra 10,000 or so apprentices, graduate engineers and other staff to deliver the MoD’s defence nuclear programme.47 The MoD is working with industry through the Defence Suppliers Forum to try to get more appren...

The MoD recognises that building capacity, including the industrial skills base, will take time, and that for industry to invest in this it must have confidence that the MoD’s demand will continue.46 For example, the MoD estimates that over the …

Because of high and volatile inflation, the MoD has changed its approach to contracting with suppliers. Formerly, around 25% of contracts were ‘firm price’, whereby the supplier bore the inflation risk.51 However, the MoD said that the cost of such firm price contracts has now become too great, and that it was not getting good value for money offers when 42 Q 112 43 Q 31; C&AG’s Report, para 2.20 44 Qq 130, 132; C&AG’s Report, para 2.20 45 Q 113 46 Qq 118, 119 47 Q 83 48 Q 108 49 Qq 128, 129 ...

Because of high and volatile inflation, the MoD has changed its approach to contracting with suppliers. Formerly, around 25% of contracts were ‘firm price’, whereby the supplier bore the inflation risk.51 However, the MoD said that the cost of such …

The MoD has also launched some initiatives to demonstrate a long-term commitment to industry regarding future demand, including an order with BAE Systems for 155mm artillery shells.54 The MoD told us that it wanted to develop an “always-on production line on munitions”, so that it could surge supply when necessary.55 It is also engaging with industry to discuss technical developments which are occurring at fast pace because of the war in Ukraine. The MoD said that without government giving in...

The MoD has also launched some initiatives to demonstrate a long-term commitment to industry regarding future demand, including an order with BAE Systems for 155mm artillery shells.54 The MoD told us that it wanted to develop an “always-on production line …

The MoD said that it tries to publish as much of its defence pipeline as it can to build supplier confidence.57 However, its failure to provide budgets that match ambition, such as the £5.9 billion funding shortfall in the shipbuilding pipeline, risks undermining suppliers’ confidence to invest in their capacity.58 Furthermore, the MoD’s focus on not committing to contracts for new projects—only about 25% of its 10-year budget is committed—might undermine its attempts to build supplier confid...

The MoD said that it tries to publish as much of its defence pipeline as it can to build supplier confidence.57 However, its failure to provide budgets that match ambition, such as the £5.9 billion funding shortfall in the shipbuilding …

Since the end of COVID-19 restrictions, there has been increased international demand for key components and skilled workers from other sectors, such as the car and commercial aviation industries.69 This has contributed to the slow delivery of defence equipment, including digital communications, armoured vehicles and Royal Navy ships.70 For example, solving technical issues affecting the state-of-the-art Type 26 frigate has contributed to delays, while demand for semiconductors by other indus...

Since the end of COVID-19 restrictions, there has been increased international demand for key components and skilled workers from other sectors, such as the car and commercial aviation industries.69 This has contributed to the slow delivery of defence equipment, including …

Recent international developments, including the war in Ukraine, have underlined the importance of strategic international partnerships for the UK.79 The UK has been working with its allies, including Ukraine, to develop interoperable equipment, pool essential munitions and encourage industry to build its capacity to supply the equipment they need.80

Recent international developments, including the war in Ukraine, have underlined the importance of strategic international partnerships for the UK.79 The UK has been working with its allies, including Ukraine, to develop interoperable equipment, pool essential munitions and encourage industry to …

The Minister for the Armed Forces acknowledged that the UK Armed Forces were deployed in excess of what the force structure was designed for, noting that “there is absolutely no pretending that we are not spending resource more keenly than our 51 X (formerly known as Twitter) post by the Ministry of Defence, 21 December 2023 [Accessed 26 January 2024] 52 HC Deb, 20 November 2023, col. 3; Defence Secretary visits Israel and Occupied Palestinian Territories to explore options to boost humanitar...

The Minister for the Armed Forces acknowledged that the UK Armed Forces were deployed in excess of what the force structure was designed for, noting that “there is absolutely no pretending that we are not spending resource more keenly than …

The Chief of the Defence Staff also told us that the MOD was investing in capabilities such as “complex weapons, general munitions, and operational spares stocks to meet the needs of sustained operation”.68 The Minister for the Armed Forces argued that decisions taken to make savings at the expense of warfighting readiness were correct when they were taken but recognised that “there is a whole load of stuff that we disinvested in that we urgently need to reinvest in”.69 He acknowledged that t...

The Chief of the Defence Staff also told us that the MOD was investing in capabilities such as “complex weapons, general munitions, and operational spares stocks to meet the needs of sustained operation”.68 The Minister for the Armed Forces argued …

Many of Dr Allport’s assessments of the capability shortages regarding the Army’s fighting vehicles align with what we discovered when we produced our 2021 Report on the challenges faced by the Army in updating its heavy armoured capability.76 When we suggested that there were serious deficiencies in the Army’s capabilities to the Chief of the Defence Staff, he told us that: We have a warfighting division that we put forward to NATO, and we recognise that we need to strengthen that division. ...

Many of Dr Allport’s assessments of the capability shortages regarding the Army’s fighting vehicles align with what we discovered when we produced our 2021 Report on the challenges faced by the Army in updating its heavy armoured capability.76 When we …

When we discussed the current state of the Army with the Chief of the General Staff, he acknowledged issues existed but pointed to the work which he had done to “mobilise the Army so that it would be ready to fight with what it has in the course of the next two or three years” which included “significant uplifts in investments, in our workforce, in improving the availability of our equipment and in accelerating modernisation, to significant investment in training and increasingly—not at the p...

When we discussed the current state of the Army with the Chief of the General Staff, he acknowledged issues existed but pointed to the work which he had done to “mobilise the Army so that it would be ready to …

Despite these actions, the Minister for the Armed Forces acknowledged that the “complete renewal of the British Army’s fighting echelon is in order to sustain our ability to put a British Division into the NATO fight under a British-led corps” would not be realised until “ the two Armoured Infantry Brigades and the Deep Recce Strike Brigade are fully constituted in the middle of the next decade”.84 77 Q65; 70 78 In comparison the Navy’s grew by 15% and Air’s by 18%. 79 Ministry of Defence (CD...

Despite these actions, the Minister for the Armed Forces acknowledged that the “complete renewal of the British Army’s fighting echelon is in order to sustain our ability to put a British Division into the NATO fight under a British-led corps” …

We have been told that the Navy is undergoing a “maritime renaissance”85 and that the UK is moving towards a maritime strategy (which prioritises a naval response above land or air capabilities).86 The Chief of the Defence Staff told us that the Royal Navy made up 20–25% of NATO maritime capacity (as compared to the RAF making up 10% of NATO’s air capacity).87 Despite this, there are still capability gaps—Nick Childs pointed to the ability to deploy a carrier strike capability being hindered ...

We have been told that the Navy is undergoing a “maritime renaissance”85 and that the UK is moving towards a maritime strategy (which prioritises a naval response above land or air capabilities).86 The Chief of the Defence Staff told us …

Dr Rowan Allport of the Human Security Centre produced a detailed list of what he perceived to be Royal Navy readiness gaps and capability shortfalls which included: • Delays to the Type 26 frigate programme which have resulted in the Type 23 frigate force being run on far past its expected lifespan, meaning sustainment of the platform had become increasingly difficult and expensive. • The reliance on RFA Fort Victoria as the only RFA solid stores ship is compounded by the fact that it is at ...

Dr Rowan Allport of the Human Security Centre produced a detailed list of what he perceived to be Royal Navy readiness gaps and capability shortfalls which included: • Delays to the Type 26 frigate programme which have resulted in the …

These gaps are compounded by the efforts which have previously been made to improve the availability of Royal Navy vessels. Nick Childs described these as “in part, robbing Peter to pay Paul within the fleet in terms of stores, key equipment to cannibalise and sometimes personnel. It will be a difficult problem to fix”.99 We raised many of the above issues in our 2021 Report which looked at the role and capabilities of the Royal Navy.100

These gaps are compounded by the efforts which have previously been made to improve the availability of Royal Navy vessels. Nick Childs described these as “in part, robbing Peter to pay Paul within the fleet in terms of stores, key …

In response to questions on naval readiness, the Chief of the Defence Staff told us that the Royal Navy was “on the up” with significant transformation between 2020 and 2030 as it “becomes a carrier Navy again, that alongside the Air Force goes from fourth generation jets to fifth generation jets, and that then has, by dint of previous investment, 22 ships and submarines coming through”, citing the Fleet Solid Support Ships, Type 26, and both Astute and Dreadnought-class submarines as example...

In response to questions on naval readiness, the Chief of the Defence Staff told us that the Royal Navy was “on the up” with significant transformation between 2020 and 2030 as it “becomes a carrier Navy again, that alongside the …

However, both First Sea Lord and the Director Force Generation of the Royal Navy (Rear Admiral Steve Moorhouse) acknowledged that there were further steps to be taken, in terms of maintenance of vessels,103 both increasing lethality and managing stockpiles (including working closely with the supply chain to ensure they “understand the imperatives”)104 and continuing to improve training.105 The First Sea Lord also acknowledged concerns with the pressure put on personnel as a result of the curr...

However, both First Sea Lord and the Director Force Generation of the Royal Navy (Rear Admiral Steve Moorhouse) acknowledged that there were further steps to be taken, in terms of maintenance of vessels,103 both increasing lethality and managing stockpiles (including …

When we asked the Commander Strategic Command how he was working on alleviating shortfalls, he provided the following examples: Health • Increasing the level of medical stocks whilst working with the NHS to ensure rotation the stock from MOD shelves through the NHS in order to avoid wasting product by having it go out of date on the shelves.129 • Considering defence’s ability to deploy civilian medical staff (depending on the environment alongside the nature and level of threat) and working w...

When we asked the Commander Strategic Command how he was working on alleviating shortfalls, he provided the following examples: Health • Increasing the level of medical stocks whilst working with the NHS to ensure rotation the stock from MOD shelves …

When we asked each of the single service heads what shortfalls their Forces were carrying, all mentioned stockpiles as an area of significant (current) concern.135 The high rate of consumption of munitions in the war in Ukraine has exceeded the assumptions (and therefore the quantities held) by most Western forces. Estimates for the use of artillery rounds in Ukraine were 5,000 a day in February 2023 (equivalent to a smaller European country’s annual order in peacetime)136. In June 2021, the ...

When we asked each of the single service heads what shortfalls their Forces were carrying, all mentioned stockpiles as an area of significant (current) concern.135 The high rate of consumption of munitions in the war in Ukraine has exceeded the …

Although all of the Chiefs had pointed to events in Ukraine as the catalyst for investment in stockpiles, General Lord Houghton and General Sir Nick Carter both told us that stockpiles had been reducing for a number of years before the Russian full-scale invasion of Ukraine.139 We have also heard concerns in previous inquiries from General Ben Hodges (who recounted how the British Army ran out of munitions 8 days into a 10-day US wargaming exercise in 2021) and General Sir Richard Barrons (wh...

Although all of the Chiefs had pointed to events in Ukraine as the catalyst for investment in stockpiles, General Lord Houghton and General Sir Nick Carter both told us that stockpiles had been reducing for a number of years before …

The Government has previously pointed to its successes in signing contracts—in June 2022 it noted that it had secured “contracts for Next Generation Light AntiTank Weapons, Starstreak High Velocity Missiles, Lightweight Multirole Missiles, Archer 6X6 Artillery 132 Q406 133 Q406–7 134 Q453 135 Q213; 220; 237; 322 136 Ammunition supply chain crisis: Ukraine war tests Europe in race to rearm, Financial Times, 7 February 2023 137 Alex Vershinin, The Return of Industrial Warfare, RUSI Commentary, ...

The Government has previously pointed to its successes in signing contracts—in June 2022 it noted that it had secured “contracts for Next Generation Light AntiTank Weapons, Starstreak High Velocity Missiles, Lightweight Multirole Missiles, Archer 6X6 Artillery 132 Q406 133 Q406–7 …

Beyond securing investment, there are further difficulties in replenishing stockpiles at pace. We heard from Professor Michael Clarke that the companies responsible for supplying precision weapons to UK Armed Forces have had small production runs for some time which there are challenges in scaling up, partly because of the consolidation of companies in defence industry both at the prime and sub-prime levels.145 Media and think tank reports have also demonstrated that there is insufficient ind...

Beyond securing investment, there are further difficulties in replenishing stockpiles at pace. We heard from Professor Michael Clarke that the companies responsible for supplying precision weapons to UK Armed Forces have had small production runs for some time which there …

In our March 2023 Report ‘Special Relationships? The US, UK and NATO’ we highlighted the issue of industrial capacity in relation to supply chain capacity and a lack of skilled workers.152 We were told by Government that: Further developing strategic alignment with industry will mean that together we can better understand long-term strategic challenges and identify solutions to issues such as the availability of critical skills, resilience within the supply chain, and productivity. We will ou...

In our March 2023 Report ‘Special Relationships? The US, UK and NATO’ we highlighted the issue of industrial capacity in relation to supply chain capacity and a lack of skilled workers.152 We were told by Government that: Further developing strategic …

We address the DCP23’s policy intentions on the MOD’s relationship with industry and the steps it has subsequently taken to improve industrial capacity in the final chapter on strategic readiness. Recruitment and retention

We address the DCP23’s policy intentions on the MOD’s relationship with industry and the steps it has subsequently taken to improve industrial capacity in the final chapter on strategic readiness. Recruitment and retention Type: conclusion | Number: 72 | Response …

Professor Justin Bronk told us that the IR23 and DCP23 had demonstrated “the broad challenges and ambitions that the UK is faced with” but had given no indication of priority.175 We made the same criticism (which the Government rejected) of the 2021 strategies.176 This lack of prioritisation has resulted in leaders of the UK Armed Forces feeling the need to show the Services “doing things all over the place all the time”, otherwise “not only will they not get additional investment to plug gap...

Professor Justin Bronk told us that the IR23 and DCP23 had demonstrated “the broad challenges and ambitions that the UK is faced with” but had given no indication of priority.175 We made the same criticism (which the Government rejected) of …

General Lord Houghton told us that the UK Armed Forces have maintained high levels of readiness for standing commitments (to domestic security and overseas non- discretionary tasks) and contingent commitments (commitments to allies and alliances such as the commitment to deploy forces to NATO at varying levels of readiness). Therefore readiness for these tasks (as opposed to warfighting readiness) was unlikely to be an issue because the Armed Forces had long been subject to demands to engage ...

General Lord Houghton told us that the UK Armed Forces have maintained high levels of readiness for standing commitments (to domestic security and overseas non- discretionary tasks) and contingent commitments (commitments to allies and alliances such as the commitment to …

Professor Michael Clarke told us that both Integrated Review documents (the original and the refresh) had demonstrated that ministerial priorities were that “Britain should have a series of multiple roles that it can perform in the world and that it has high aspirations to a significant place in world politics, at a time of darkening international relations”.205 Professor Malcolm Chalmers agreed, describing the strategic narrative in both documents as “very geographically and thematically amb...

Professor Michael Clarke told us that both Integrated Review documents (the original and the refresh) had demonstrated that ministerial priorities were that “Britain should have a series of multiple roles that it can perform in the world and that it …

Professor Chalmers thought it unlikely there would be an increase in defence spending anytime soon given the UK’s poor economic performance, as any increase would have to come either from cuts in other government spending or an increase of taxation.218 The Minister for the Armed Forces recognised that the funding was not available for an increase in the size of the Armed Forces so it could continue to manage both its operational and warfighting readiness: “We are just going to have to accept ...

Professor Chalmers thought it unlikely there would be an increase in defence spending anytime soon given the UK’s poor economic performance, as any increase would have to come either from cuts in other government spending or an increase of taxation.218 …

Despite the Secretary of State’s insistence that the UK Armed Forces still have sufficient capacity to deploy in response to world events, we remain to be convinced. We are concerned that the breadth of ministerial requirements is in danger of pushing the Armed Forces far beyond what is sustainable. We recommend that either a budget uplift or a (strictly adhered to) prioritisation ranking is introduced. Any prioritisation ranking adopted needs to be drawn up within the National Security Counc...

Despite the Secretary of State’s insistence that the UK Armed Forces still have sufficient capacity to deploy in response to world events, we remain to be convinced. We are concerned that the breadth of ministerial requirements is in danger of …

Describing the key components of strategic readiness, the Minister for the Armed Forces highlighted the importance of the industrial base and its ability to increase its capacity; enablers which project and sustain the force (not just in terms of equipment and warfighters but also medical services, signallers, logisticians and engineers as well as Reserves who can form part of the second echelon force); and resilient (and therefore dispersed) warehousing and stores.228 He acknowledged that th...

Describing the key components of strategic readiness, the Minister for the Armed Forces highlighted the importance of the industrial base and its ability to increase its capacity; enablers which project and sustain the force (not just in terms of equipment …

Finally, the DCP23 highlights the work carried out by Defence to “identify and mitigate a range of economic security risks” including the screening of investment in defence- relevant sectors of the UK economy. Work is ongoing to establish how Defence can stop adversaries from gaining specialist defence knowledge through research collaboration, the employment of UK defence and technical experts and business partnerships or technical support contracts. Further work focuses on supporting the UK’...

Finally, the DCP23 highlights the work carried out by Defence to “identify and mitigate a range of economic security risks” including the screening of investment in defence- relevant sectors of the UK economy. Work is ongoing to establish how Defence …

Defence industry plays an integral role in Armed Forces readiness. The First Sea Lord explained that the UK Armed Forces rely heavily on the defence industry to deliver “world-leading capability to deal with those who may wish us harm”.242 Nick Childs and Professor Justin Bronk both highlighted that contracts with defence companies are vital to ensuring UK Armed Forces readiness in relation to maintenance and sustainment of equipment.243 Beyond equipment, the British Army currently relies on ...

Defence industry plays an integral role in Armed Forces readiness. The First Sea Lord explained that the UK Armed Forces rely heavily on the defence industry to deliver “world-leading capability to deal with those who may wish us harm”.242 Nick …

Despite the acknowledged reliance on industry, both General Lord Houghton and General Sir Nick Carter questioned whether the relationship between the MOD and industry was effective in supporting strategic readiness. General Lord Houghton told us that despite numerous reviews on defence procurement, the relationship between Defence and the defence industry “is still not anywhere close to where it needs to be”.245 General Sir Nick Carter pointed out that defence industry reports to its sharehol...

Despite the acknowledged reliance on industry, both General Lord Houghton and General Sir Nick Carter questioned whether the relationship between the MOD and industry was effective in supporting strategic readiness. General Lord Houghton told us that despite numerous reviews on …

In 2023, we examined the organisation responsible for the majority of MOD procurement (Defence Equipment & Support).248 Pointing to the conclusion by the Public Accounts Committee that defence equipment “arrives into service many years late and significantly over-budget, with depressing regularity”, something which means that “neither taxpayers nor our Armed Forces are being served well”,249 we welcomed the acknowledgement by the CEO of Defence Equipment & Support that “we have some really ho...

In 2023, we examined the organisation responsible for the majority of MOD procurement (Defence Equipment & Support).248 Pointing to the conclusion by the Public Accounts Committee that defence equipment “arrives into service many years late and significantly over-budget, with depressing …

Shortly after our Report was published, the DCP23 was produced by the Government. It announced that key lessons from Ukraine had resulted in the following conclusions: • The pace of battlefield innovation means that decades-long acquisition programmes and upgrades are no longer suitable—instead simpler platforms which can be upgraded at speed (and by a range of companies, rather than just the original prime contractor) are required; • Defence must partner with industry, sharing both advances ...

Shortly after our Report was published, the DCP23 was produced by the Government. It announced that key lessons from Ukraine had resulted in the following conclusions: • The pace of battlefield innovation means that decades-long acquisition programmes and upgrades are …

Many of our recommendations were adopted within the DCP23. That document commits Defence to engaging at an earlier stage in strategic conversations with industry about requirements and developing relationships with key Defence Executives. This should allow Defence and industry to work together to address issues such as “availability of critical skills, diversification and resilience within the supply chain and productivity”. In addition, industry are being involved earlier in the military cap...

Many of our recommendations were adopted within the DCP23. That document commits Defence to engaging at an earlier stage in strategic conversations with industry about requirements and developing relationships with key Defence Executives. This should allow Defence and industry to …

In December 2023, the Deputy Chief of the Defence Staff (Financial and Military Capability) told us that there had been recognition of the importance of trying “to make sure that our pipeline of munitions is always on, rather than boom and bust” and that the MOD were now working with industry to secure long-term contracts. He explained that the UK Armed Forces have “shifted from what we would say in the military as ‘operating’ in various parts of the world to now ‘deterring’, but being prepar...

In December 2023, the Deputy Chief of the Defence Staff (Financial and Military Capability) told us that there had been recognition of the importance of trying “to make sure that our pipeline of munitions is always on, rather than boom …

As well as earlier engagement on requirements, the acquisition process is moving from one focused on specifying exact requirements to one which focuses on the ‘spiral development’ of capabilities—this will allow for the iterative development of capabilities to keep pace with innovation on the battlefield whilst also ensuring that these are not closed systems which can only be developed by the original vendor (“vendor lock-in”).269

As well as earlier engagement on requirements, the acquisition process is moving from one focused on specifying exact requirements to one which focuses on the ‘spiral development’ of capabilities—this will allow for the iterative development of capabilities to keep pace …

In order to ensure that Defence can replenish and increase stockpiles of munitions, spares and operational supplies, the DCP23 recognises that industry needs to have robust and resilient supply chains which have assured access to “key materials, components and 263 Ministry of Defence, Defence’s response to a more contested and volatile world, Cm 901, July 2023, p 37–8 264 Ministry of Defence, Defence’s response to a more contested and volatile world, Cm 901, July 2023, p 39 265 Oral evidence ...

In order to ensure that Defence can replenish and increase stockpiles of munitions, spares and operational supplies, the DCP23 recognises that industry needs to have robust and resilient supply chains which have assured access to “key materials, components and 263 …

The DCP23 commits Defence to prioritising time within its acquisition system (within the parameters of time, cost and performance) as: driving pace is critical–even if it forces us to increase our risk tolerance elsewhere. Our ambition is to reduce radically the average time from the identification of a military need to contract placement, and from contract placement to delivery to the front-line.272

The DCP23 commits Defence to prioritising time within its acquisition system (within the parameters of time, cost and performance) as: driving pace is critical–even if it forces us to increase our risk tolerance elsewhere. Our ambition is to reduce radically …

It also states that Defence intends to set “a maximum five-year commitment for acquisition programmes, with a maximum three-year commitment for digital programmes” although it acknowledges that the MOD procures a wide range of equipment, goods and services and so will need to “tailor our approach to reflect the risk and complexity of each programme, ensuring that we are proportionate in the approach we take. For example, we recognise that some of our more exceptional programmes–those on the G...

It also states that Defence intends to set “a maximum five-year commitment for acquisition programmes, with a maximum three-year commitment for digital programmes” although it acknowledges that the MOD procures a wide range of equipment, goods and services and so …

Both Commander, Strategic Command and the Minister for the Armed Forces were at pains to emphasise that this was a real change in approach. Commander, Strategic Command told us that Defence needed to look at long-term pipelines to supply the munitions and stockpile capabilities which meant moving away from a “just-enough, just- in-time approach [which] has put us in a place that limits our capability, our decision space and our options … We may well need enduring and surge support to be able ...

Both Commander, Strategic Command and the Minister for the Armed Forces were at pains to emphasise that this was a real change in approach. Commander, Strategic Command told us that Defence needed to look at long-term pipelines to supply the …

The Minister was clear that current procurement processes were no longer viable as a result of the pace of innovation.277 He acknowledged that this was a complete paradigm shift and a “frankly nascent part of policy making”.278 He warned that no private business has a peacetime obligation to maintain unused production capacity without a contract 270 Ministry of Defence, Defence’s response to a more contested and volatile world, Cm 901, July 2023, p 40–41 271 Oral evidence taken on 15 November...

The Minister was clear that current procurement processes were no longer viable as a result of the pace of innovation.277 He acknowledged that this was a complete paradigm shift and a “frankly nascent part of policy making”.278 He warned that …

We welcome the Government’s decision to assess what the country would need to do to maintain a warfighting effort. However, it is worrying that this work had not already been undertaken. The national defence plan is still a work in progress but we intend to maintain ongoing scrutiny of the Government’s developing plans to ensure warfighting and strategic readiness.

We welcome the Government’s decision to assess what the country would need to do to maintain a warfighting effort. However, it is worrying that this work had not already been undertaken. The national defence plan is still a work in …

It is a matter of national pride that whenever the Armed Forces are asked to carry out a task, they will find a way. It is to the credit of the Armed Forces that they have sustained this effort for so long. But overtasking has both a personal cost for service personnel and an opportunity cost for the UK. The increase in global instability has coincided with a period of decreasing recruitment and reduced industrial capacity, which requires sustained, long-term investment. The Government risks ...

It is a matter of national pride that whenever the Armed Forces are asked to carry out a task, they will find a way. It is to the credit of the Armed Forces that they have sustained this effort for …

Despite the Secretary of State’s insistence that the UK Armed Forces still have sufficient capacity to deploy in response to world events, we remain to be convinced. We are concerned that the breadth of ministerial requirements is in danger of pushing the Armed Forces far beyond what is sustainable. We recommend that either a budget uplift or a (strictly adhered to) prioritisation ranking is introduced. Any prioritisation ranking adopted needs to be drawn up within the National Security Counc...

Despite the Secretary of State’s insistence that the UK Armed Forces still have sufficient capacity to deploy in response to world events, we remain to be convinced. We are concerned that the breadth of ministerial requirements is in danger of …

We welcome the Government’s decision to assess what the country would need to do to maintain a warfighting effort. However, it is worrying that this work had not already been undertaken. The national defence plan is still a work in progress but we intend to maintain ongoing scrutiny of the Government’s developing plans to ensure warfighting and strategic readiness.

We welcome the Government’s decision to assess what the country would need to do to maintain a warfighting effort. However, it is worrying that this work had not already been undertaken. The national defence plan is still a work in …

MoD will need to work closely with industry to ensure resilience in its supply chains. The MoD outsourced its central warehousing and the procurement of some of its commodities—food, clothing, general and medical supplies—to a consortium under the “Team Leidos” banner through the Logistics Commodities and Services Transformation (LCST) contract in 2015. This has been successful overall, forecast to generate financial efficiencies of £403 million over the life of the contract and has increased...

MoD will need to work closely with industry to ensure resilience in its supply chains. The MoD outsourced its central warehousing and the procurement of some of its commodities—food, clothing, general and medical supplies—to a consortium under the “Team Leidos” …

On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Defence (MoD) about its inventory management, with witnesses from MoD centre, Defence Support, and Defence Equipment and Support (DE&S).7

On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Defence (MoD) about its inventory management, with witnesses from MoD centre, Defence Support, and Defence Equipment and Support (DE&S).7 Type: conclusion …

MoD’s inventory management has faced long-standing issues with its many legacy IT systems, which have limited functionality and reinforce the fragmentation of its inventory management. Each Command has its own core inventory management system, and there are other systems used across the Support function for managing other types of inventory, as well as aspects such as engineering. Whilst the MoD has reduced the number of Support systems from around 250 in 2010 to 89 today, two of its base inv...

MoD’s inventory management has faced long-standing issues with its many legacy IT systems, which have limited functionality and reinforce the fragmentation of its inventory management. Each Command has its own core inventory management system, and there are other systems used …

The MoD outsourced its central warehousing and the procurement of some of its commodities—food, clothing, general and medical supplies—to a consortium under the Team Leidos banner28 through the Logistics and Commodities Services Transformation (LCST) contract in 2015. Managed through DE&S, this has been a successful contract overall, and as of May 2023, the MoD forecast that it would achieve financial efficiencies of £403 million by 2028, when the contract is due to come to an end.29 Through ...

The MoD outsourced its central warehousing and the procurement of some of its commodities—food, clothing, general and medical supplies—to a consortium under the Team Leidos banner28 through the Logistics and Commodities Services Transformation (LCST) contract in 2015. Managed through DE&S, …

The MoD is looking at incorporating the learning from the LCST contract into its Future Defence Support Services (FDSS) programme, which aims to find the best inventory management arrangements when the LCST contract comes to an end.31 Recent events such as the war in Ukraine and the impact of covid-19 have also brought about a reassessment of how the MoD should manage its inventory.32 In its 2022 Supply Chain strategy, it set out that its previous approaches prioritised cost efficiency, which...

The MoD is looking at incorporating the learning from the LCST contract into its Future Defence Support Services (FDSS) programme, which aims to find the best inventory management arrangements when the LCST contract comes to an end.31 Recent events such …

Future conflicts may require sudden surges in demand and industrial capacity, which industry may then need support to provide. The MoD told us that the United Kingdom and other North Atlantic Treaty Organisation (NATO) members have put together a NATO defence production action plan. This was designed to create a clearer signal to all of industry about the demand from across NATO, through which the UK’s contribution was the development of an overall munitions strategy. In doing so, it involved...

Future conflicts may require sudden surges in demand and industrial capacity, which industry may then need support to provide. The MoD told us that the United Kingdom and other North Atlantic Treaty Organisation (NATO) members have put together a NATO …

The MoD must be transparent and realistic about the eventual size of the F-35 fleet, recognising that the planned deferral of this decision to the middle of this decade will damage the ability of UK industry to maintain an ongoing production capacity for combat air, and should also make clear whether it is attributed to the Royal Navy or the RAF. When deciding whether to purchase further F-35s, the MoD should carefully consider the advantages that would be offered by a mixed fleet of F-35A an...

The MoD must be transparent and realistic about the eventual size of the F-35 fleet, recognising that the planned deferral of this decision to the middle of this decade will damage the ability of UK industry to maintain an ongoing …

The far-reaching cuts to aircraft numbers set out in the 2021 Defence Command Paper weakened the UK’s air power capability at a time when the armed forces were already over-stretched. The scale of this gamble became clear less than a year later, when Europe faced its most serious security crisis in decades as Russia launched its full-scale invasion of Ukraine. The MoD’s acceptance of capability gaps and its cuts to combat mass across the fleet have left the UK dangerously exposed at a time of...

The far-reaching cuts to aircraft numbers set out in the 2021 Defence Command Paper weakened the UK’s air power capability at a time when the armed forces were already over-stretched. The scale of this gamble became clear less than a …

The UK Government should continue to be proactive in considering how the UK’s defence and security priorities in the North Atlantic and the High North may change in the future, in response to the changing geopolitical context and the effects of climate change. In its response to this report, the UK Government should set out its most recent assessment of these challenges. Among the most important issues the UK Government must consider are: • increasing Russian belligerence; • growing Chinese i...

The UK Government should continue to be proactive in considering how the UK’s defence and security priorities in the North Atlantic and the High North may change in the future, in response to the changing geopolitical context and the effects …

In its response to this report, the UK Government should set out what scope it considers for the defence presence in Scotland to be sufficiently scaled up to respond to a scenario where the UK has greater obligations in the North Atlantic and the High North. In particular, its response should consider how rapidly capacity for basing and operating assets from Scottish bases could be increased if required.

In its response to this report, the UK Government should set out what scope it considers for the defence presence in Scotland to be sufficiently scaled up to respond to a scenario where the UK has greater obligations in the …

The refreshed Integrated Review may revise judgements about operational requirements and identify new priorities which are not currently funded in the Equipment Plan. The Ukraine conflict has necessitated a refresh of the 2021 Integrated Review. The Department expected that the refresh would be completed in the first quarter of 2023 and that the core of the Equipment Plan would still hold good. The Government published the refresh in March 2023, but the Department will now have to reflect the...

The refreshed Integrated Review may revise judgements about operational requirements and identify new priorities which are not currently funded in the Equipment Plan. The Ukraine conflict has necessitated a refresh of the 2021 Integrated Review. The Department expected that the …

We are concerned that the Department has not yet developed a supply chain that can reliably and quickly deliver the capabilities and stockpiles it needs. The Department has started to replenish stocks gifted to Ukraine, the cost of which HM Treasury will cover through the Reserve. It is also working with HM Treasury on a case-by-case basis to agree on a reasonable replacement when items are no longer in production or where the UK’s requirement has changed. However, the Department does not exp...

We are concerned that the Department has not yet developed a supply chain that can reliably and quickly deliver the capabilities and stockpiles it needs. The Department has started to replenish stocks gifted to Ukraine, the cost of which HM …

In response to Russia’s invasion, the Government has decided to review its 2021 Integrated Review. This work has been led by the Cabinet Office. The Government published its Integrated Review Refresh 2023 in March 2023.15 The Department now expects to publish its own refreshed plans in a new Defence Command Paper, which in turn will have implications for its Equipment Plan.16 The Department anticipated that the core of the Equipment Plan would still hold good but that there would be some noti...

In response to Russia’s invasion, the Government has decided to review its 2021 Integrated Review. This work has been led by the Cabinet Office. The Government published its Integrated Review Refresh 2023 in March 2023.15 The Department now expects to …

The Department said that it would argue for new capabilities through this process, and if it received more resources, it would add these to the Equipment Plan. However, it accepted that it would need to prioritise investment decisions if new demands exceeded the funding from HM Treasury.19 In March 2023, as part of the Integrated Review refresh, the Prime Minister announced that the Department would receive £5 billion of additional funding over 2023–24 and 2024–25.20 Of this new money, it wil...

The Department said that it would argue for new capabilities through this process, and if it received more resources, it would add these to the Equipment Plan. However, it accepted that it would need to prioritise investment decisions if new …

The Department acknowledged that inflation also makes it difficult for suppliers to deliver due to rising staff and material costs.55 As a result, the Department is changing its contractual approach to take account of the inflation risk and avoid suppliers charging a higher premium for continuing to take this risk on.56 47 Q 95 48 C&AG’s Report, para 2.14; Ministry of Defence, The Defence Equipment Plan 2022–2032, P11 49 Q 88 50 Q 89, C&AG’s Report, para 1.15 51 Q 86 52 Qq 79, 81 53 Q 51 54 Q...

The Department acknowledged that inflation also makes it difficult for suppliers to deliver due to rising staff and material costs.55 As a result, the Department is changing its contractual approach to take account of the inflation risk and avoid suppliers …

The Department faces significant challenges replenishing its stocks and delivering new capabilities to meet the threats of a more volatile world. The Department has begun replacing stocks gifted to Ukraine, either on a like-for-like basis or with an equivalent where gifted capabilities are no longer in production or the Department now has different requirements.57 However, we are concerned that replacement is not occurring quickly enough, with, for example, the Department confirming that it w...

The Department faces significant challenges replenishing its stocks and delivering new capabilities to meet the threats of a more volatile world. The Department has begun replacing stocks gifted to Ukraine, either on a like-for-like basis or with an equivalent where …

The Department acknowledged that UK stocks were not sufficient even before gifts to Ukraine.59 A recent Royal United Services Institute report stated that at the height of fighting in the Donbas, Russia was using more ammunition in two days than the UK held in total.60 The Department told us that the Ukraine war has shown that its principle of buying munitions and capability in batches is no longer the right approach. It intends to shift to having supply chains with continuous production whic...

The Department acknowledged that UK stocks were not sufficient even before gifts to Ukraine.59 A recent Royal United Services Institute report stated that at the height of fighting in the Donbas, Russia was using more ammunition in two days than …

Letter to Rt Hon Ben Wallace MP, Secretary of State for Defence at Ministry of Defence following up to the Government response to Defence in Scotland: military shipbuilding Report, dated 5 April 2023

Direction: from_committee

The UK should explore the value of linking contracts to increase UK exports to the US and lobby the US Administration to reduce the regulatory burdens placed on UK defence companies.

The UK should explore the value of linking contracts to increase UK exports to the US and lobby the US Administration to reduce the regulatory burdens placed on UK defence companies. Type: conclusion | Number: 5 | Paragraph: 28 | …

Defence industrial capacity needs to be both resilient and scalable. In order to secure supply chains the Secretary of State acknowledged that the Government needs to address skills shortages as well as committing to significant orders alongside allies 36 Special Relationships? US, UK and NATO to ensure that production lines are maintained in the long term and to replace stockpiles of munitions in the short term. Capacity (including redundant capacity) is also key if industry is to be able to...

Defence industrial capacity needs to be both resilient and scalable. In order to secure supply chains the Secretary of State acknowledged that the Government needs to address skills shortages as well as committing to significant orders alongside allies 36 Special …

It is clear that the manner in which Western Governments procure armaments is not fit for purpose. The MOD produced a strategy aimed at improving the way that it engages with industry and allies almost two years ago and yet we have been told it will take at least a decade to replenish (and then increase to a sustainable level) UK ammunition stockpiles. We have previously recommended that the Department report annually on its implementation of the Defence, Security and Industrial Strategy—a re...

It is clear that the manner in which Western Governments procure armaments is not fit for purpose. The MOD produced a strategy aimed at improving the way that it engages with industry and allies almost two years ago and yet …

Letter from Rt Hon Ben Wallace MP, Secretary of State for Defence at Ministry of Defence following up from Defence in Scotland: Military shipbuilding on 6 December 2022, dated 30 January 2023

Direction: to_committee

The UK Government’s approach to procuring warships has shifted in recent years, and it is no longer the default position that warships will be designed and built fully in the UK, which was of concern to some in the Scottish military shipbuilding sector.

The UK Government’s approach to procuring warships has shifted in recent years, and it is no longer the default position that warships will be designed and built fully in the UK, which was of concern to some in the Scottish …

In its response to this report, the UK Government should set out what work it did, in preparing the National Shipbuilding Strategy Refresh, to estimate and measure the benefits of procuring ships domestically for the Scottish economy and the wider UK economy, and the revenue generated for the Scottish Government and HM Treasury. The response should also set out what conclusions were drawn from this work.

In its response to this report, the UK Government should set out what work it did, in preparing the National Shipbuilding Strategy Refresh, to estimate and measure the benefits of procuring ships domestically for the Scottish economy and the wider …

The decision to award the Fleet Solid Support (FSS) ships to the international consortium Team Resolute is an example of a shift in the UK Government’s approach to warship procurement. We note that the UK Government chose the Team Resolute bid over a Team UK bid that would reportedly have supported more jobs in the UK, and Scotland in particular. The UK Government’s decision appears to prioritise short-term savings over longer term economic gains for Scotland and the rest of the UK. Witnesses...

The decision to award the Fleet Solid Support (FSS) ships to the international consortium Team Resolute is an example of a shift in the UK Government’s approach to warship procurement. We note that the UK Government chose the Team Resolute …

In its response to this report, the UK Government should confirm on what date it determined that Team UK’s bid for the Fleet Solid Support ships contract was non- compliant with the terms of the competition, what work was done to resolve the compliance issues identified, and on what date the decision to select a preferred bidder was made. (Paragraph 27) 4 Defence in Scotland: military shipbuilding

In its response to this report, the UK Government should confirm on what date it determined that Team UK’s bid for the Fleet Solid Support ships contract was non- compliant with the terms of the competition, what work was done …

The export of the Type 26 and Type 31 design licences is a great success story for the Scottish shipbuilding industry, and we are confident that further exports will follow. At the same time, export opportunities cannot be depended upon to provide consistent work for the Scottish military shipbuilding industry in the same way as demand from the Royal Navy.

The export of the Type 26 and Type 31 design licences is a great success story for the Scottish shipbuilding industry, and we are confident that further exports will follow. At the same time, export opportunities cannot be depended upon …

The role of exports of military ships/design licences in the National Shipbuilding Strategy should be to supplement, and not to replace, domestic demand. The UK Government should be prepared to use shipbuilding contracts strategically to sustain shipbuilding capacity in Scotland in circumstances where the export environment is more challenging than at present.

The role of exports of military ships/design licences in the National Shipbuilding Strategy should be to supplement, and not to replace, domestic demand. The UK Government should be prepared to use shipbuilding contracts strategically to sustain shipbuilding capacity in Scotland …

The UK Government should carry out and lay before Parliament a formal evaluation of the contribution of the National Shipbuilding Office after two years, and again after five and ten years, to assess whether it has succeeded in driving better strategic decision-making in shipbuilding. As part of this review, the UK Government should specifically consider the question of, and publish conclusions on, whether the National Shipbuilding Office has sufficient powers to achieve its aims and whether ...

The UK Government should carry out and lay before Parliament a formal evaluation of the contribution of the National Shipbuilding Office after two years, and again after five and ten years, to assess whether it has succeeded in driving better …

The establishment of a National Shipbuilding Office hub in Edinburgh provides a welcome link to Scottish shipbuilders.

The establishment of a National Shipbuilding Office hub in Edinburgh provides a welcome link to Scottish shipbuilders. Type: conclusion | Number: 12 | Paragraph: 39 | Response status: under_consideration Government response: 12 & 13: The Department are pleased that the …

To enhance its relationships with the Scottish shipbuilding sector, the National Shipbuilding Office should, by the end of 2023, establish a permanent staff presence in its Edinburgh hub, as the MoD and NSO have indicated. (Paragraph 40) The shipbuilding pipeline

To enhance its relationships with the Scottish shipbuilding sector, the National Shipbuilding Office should, by the end of 2023, establish a permanent staff presence in its Edinburgh hub, as the MoD and NSO have indicated. (Paragraph 40) The shipbuilding pipeline …

We wish to underline the importance to Scottish shipyards of maintaining a dependable ‘drumbeat’ of orders to allow them to invest and grow. The days of ‘feast and famine’ must not return. The creation of the National Shipbuilding Strategy suggests that the UK Government appreciates the importance of this point. However, there remains some uncertainty about the pipeline in the 2030s and 2040s, such as the basis on which the Type 45 destroyers will be replaced. The Scottish shipbuilding indust...

We wish to underline the importance to Scottish shipyards of maintaining a dependable ‘drumbeat’ of orders to allow them to invest and grow. The days of ‘feast and famine’ must not return. The creation of the National Shipbuilding Strategy suggests …

The UK Government should provide greater clarity about the work that will fill the whole of the 30-year shipbuilding pipeline into the 2030s and 2040s. It is of course difficult to calculate precise military needs beyond 2050. However, the UK Government should give Scottish shipbuilders the confidence to continue to invest in the future with a clear commitment that it will strategically use its contracts to sustain the national capacity to design and build warships in Scotland, so long as ind...

The UK Government should provide greater clarity about the work that will fill the whole of the 30-year shipbuilding pipeline into the 2030s and 2040s. It is of course difficult to calculate precise military needs beyond 2050. However, the UK …

Recent developments have introduced uncertainty about some orders in the pipeline and whether it sets out a clear ‘drumbeat’ of orders needed to sustain Scottish shipyards. The Fleet Solid Support Ships and the National Flagship are two examples. There has been some media speculation about the Type 32s, although the UK Government have stated: “The strategic and long-term investments continue to be on track and will increase the capability and size of the fleet.”

Recent developments have introduced uncertainty about some orders in the pipeline and whether it sets out a clear ‘drumbeat’ of orders needed to sustain Scottish shipyards. The Fleet Solid Support Ships and the National Flagship are two examples. There has …

In its response to this report, and in its annual shipbuilding update to the Defence Select Committee, the UK Government should provide an update on the current status of the military shipbuilding pipeline for Scottish naval yards. In particular, it should confirm whether the MOD still intends to order the Type 32 frigates as set out in the National Shipbuilding Strategy Refresh, and whether the timeline for the Type 32s has changed as a result of concerns about the affordability of the initi...

In its response to this report, and in its annual shipbuilding update to the Defence Select Committee, the UK Government should provide an update on the current status of the military shipbuilding pipeline for Scottish naval yards. In particular, it …

The award of the contract to build five additional Type 26 frigates to BAE Systems is welcome news for Scottish shipbuilding, and importantly continues the shipbuilding ‘drumbeat’ into the medium-term. We note that, partly as a consequence of global challenges, the first batch of Type 26 vessels has faced delays and increased costs.

The award of the contract to build five additional Type 26 frigates to BAE Systems is welcome news for Scottish shipbuilding, and importantly continues the shipbuilding ‘drumbeat’ into the medium-term. We note that, partly as a consequence of global challenges, …

In its response, the UK Government should set out how much capacity it expects to now be available in the Scottish warship industry in each of the years between 2025– 2032 as a result of the decision to select Team Resolute rather than Team UK as the preferred bidder for the latest order of Fleet Solid Support ships. It should also set out what work could potentially make use of that capacity in the absence of the FSS. (Paragraph 63) Scottish SMEs and shipbuilding supply chains

In its response, the UK Government should set out how much capacity it expects to now be available in the Scottish warship industry in each of the years between 2025– 2032 as a result of the decision to select Team …

We heard that historically the Ministry of Defence’s understanding of shipbuilding supply chains had been a vulnerability. The Secretary of State told us this had subsequently improved. The new Defence Supply Chain Strategy’s emphasis on building resilience in supply chains is welcome, and improving understanding of supply chains further will help to achieve this aim.

We heard that historically the Ministry of Defence’s understanding of shipbuilding supply chains had been a vulnerability. The Secretary of State told us this had subsequently improved. The new Defence Supply Chain Strategy’s emphasis on building resilience in supply chains …

The Ministry of Defence should publish data on the composition of shipbuilding supply chains, to assist understanding of how the UK shipbuilding industry is structured. This should include regional breakdowns so that the extent of local supply chains and industry clusters can be better understood by Government and industry.

The Ministry of Defence should publish data on the composition of shipbuilding supply chains, to assist understanding of how the UK shipbuilding industry is structured. This should include regional breakdowns so that the extent of local supply chains and industry …

The UK Government should carry out and lay before Parliament a formal evaluation of the contribution of the National Shipbuilding Office after two years, and again after five and ten years, to assess whether it has succeeded in driving better strategic decision- making in shipbuilding. As part of this review, the UK Government should specifically consider the question of, and publish conclusions on, whether the National Shipbuilding 57 Q139 58 Q129; Q142 59 Q140 60 Q218 61 Q139 62 Q217 (see f...

The UK Government should carry out and lay before Parliament a formal evaluation of the contribution of the National Shipbuilding Office after two years, and again after five and ten years, to assess whether it has succeeded in driving better …

The establishment of a National Shipbuilding Office hub in Edinburgh provides a welcome link to Scottish shipbuilders.

The establishment of a National Shipbuilding Office hub in Edinburgh provides a welcome link to Scottish shipbuilders. Type: conclusion | Number: 39 | Response status: not_addressed Government response: The Department are pleased that the committee recognises the importance of the …

A theme we heard repeatedly emphasised during our inquiry was the importance of a regular ‘drumbeat’ of orders to provide a consistent workload that could help industry plan for the future. Stakeholders from all parts of the sector stressed that shipbuilding is an industry that operates on long timescales and which required significant forward planning. We were told that in the past shipbuilding in the UK had suffered from a pattern of ‘feast and famine’, with a sporadic and unpredictable pat...

A theme we heard repeatedly emphasised during our inquiry was the importance of a regular ‘drumbeat’ of orders to provide a consistent workload that could help industry plan for the future. Stakeholders from all parts of the sector stressed that …

Stakeholders also emphasised that a steady ‘drumbeat’ could underpin future investment that would make the industry more productive in the future. Mr Waddell told us: It is a very simple equation. If businesses are faced with uncertainty, they do not invest. If they are faced with certainty and can guarantee a reasonable level of return on their investment, they will put the investment in.67 Richard Powell of the Society of Maritime Industries described how this could lead to a more efficient...

Stakeholders also emphasised that a steady ‘drumbeat’ could underpin future investment that would make the industry more productive in the future. Mr Waddell told us: It is a very simple equation. If businesses are faced with uncertainty, they do not …

In his foreword to the National Shipbuilding Strategy Refresh, the Defence Secretary says the UK Government “will give industry a much clearer demand signal about what we are trying to achieve with our procurement programmes” and that for the first time the 70 Professor Trevor Taylor, RUSI (DIS0033) Defence in Scotland: military shipbuilding 21 UK Government would release a 30-year pipeline of all Government vessel procurements.71 However, the Government subsequently clarified, in response to...

In his foreword to the National Shipbuilding Strategy Refresh, the Defence Secretary says the UK Government “will give industry a much clearer demand signal about what we are trying to achieve with our procurement programmes” and that for the first …

Some parts of this pipeline have since been confirmed, such as the confirmation that the second batch of Type 26 frigates would be built by BAE at Govan (considered in more detail later in this chapter).73 However, the pipeline is also subject to change. The Refresh explains that The NSO will oversee this pipeline, working with Departments to manage this against UK industrial capacity. As the pipeline spans a 30 year period, it is subject to change and will be agreed through future Spending R...

Some parts of this pipeline have since been confirmed, such as the confirmation that the second batch of Type 26 frigates would be built by BAE at Govan (considered in more detail later in this chapter).73 However, the pipeline is …

Other elements of the pipeline face questions, including the Type 32 frigates, which under the pipeline suggested above would be built by Babcock at Rosyth from 2028 into the late 2030s. A National Audit Office report in November noted that, in July 2022, Navy Command withdrew its initial plans for Type 32 frigates and Multi-Role Support Ships because of “concerns about unaffordability,” and that “the revised costing profile is likely to be significantly higher.”77 The Government said in resp...

Other elements of the pipeline face questions, including the Type 32 frigates, which under the pipeline suggested above would be built by Babcock at Rosyth from 2028 into the late 2030s. A National Audit Office report in November noted that, …

In addition to uncertainty around the Type 32 frigate, the selection of Team Resolute as the preferred bidder for the Fleet Solid Support ships contract (as discussed in paragraphs 20–27 above) also means that the FSS vessels (considered later in this chapter) will not be forming part of the drumbeat for Scottish yards.

In addition to uncertainty around the Type 32 frigate, the selection of Team Resolute as the preferred bidder for the Fleet Solid Support ships contract (as discussed in paragraphs 20–27 above) also means that the FSS vessels (considered later in …

Representatives from the shipbuilding industry told us that having sight of upcoming shipbuilding projects over the coming decades was helpful, but that it was less clear how this translated into a drumbeat of work for shipyards. Ian Waddell of the Confederation of Shipbuilding and Engineering Unions told us: My frustration with this is that all the pieces of the jigsaw are on the table in front of us, and it would not take too much to connect them to make a proper picture. We have the 30-yea...

Representatives from the shipbuilding industry told us that having sight of upcoming shipbuilding projects over the coming decades was helpful, but that it was less clear how this translated into a drumbeat of work for shipyards. Ian Waddell of the …

In its December 2021 report “We’re going to need a bigger Navy”, the Defence Select Committee recommended that the Ministry of Defence provide Parliament with an annual shipbuilding plan, including the number of ships planned to enter and leave service each year in the next 30 years. We ask that the Senior Responsible Owners for the Type 26, Type 31, Astute and Dreadnought programmes provide the Committee with an annual report on each of their programmes within six months of the publication o...

In its December 2021 report “We’re going to need a bigger Navy”, the Defence Select Committee recommended that the Ministry of Defence provide Parliament with an annual shipbuilding plan, including the number of ships planned to enter and leave service …

We heard differing views over how decisions about how Scotland’s constitutional future might affect the shipbuilding pipeline. Professor Keith Hartley told us that “at the moment, the industry’s future depends on the Royal Navy. Without the Royal Navy, you would not have an industry.”86 He concluded that “I do not see a Scottish warship building industry in an independent Scotland.”87 John Howie of Babcock, however, indicated that the constitutional debate was not a concern. Discussing recent...

We heard differing views over how decisions about how Scotland’s constitutional future might affect the shipbuilding pipeline. Professor Keith Hartley told us that “at the moment, the industry’s future depends on the Royal Navy. Without the Royal Navy, you would …

We wish to underline the importance to Scottish shipyards of maintaining a dependable ‘drumbeat’ of orders to allow them to invest and grow. The days of ‘feast and famine’ must not return. The creation of the National Shipbuilding Strategy suggests that the UK Government appreciates the importance of this point. However, there remains some uncertainty about the pipeline in the 2030s and 2040s, such as the basis on which the Type 45 destroyers will be replaced. The Scottish shipbuilding indust...

We wish to underline the importance to Scottish shipyards of maintaining a dependable ‘drumbeat’ of orders to allow them to invest and grow. The days of ‘feast and famine’ must not return. The creation of the National Shipbuilding Strategy suggests …

The UK Government should provide greater clarity about the work that will fill the whole of the 30-year shipbuilding pipeline into the 2030s and 2040s. It is of course difficult to calculate precise military needs beyond 2050. However, the UK Government should give Scottish shipbuilders the confidence to continue to invest in the future with a clear commitment that it will strategically use its contracts to sustain the national capacity to design and build warships in Scotland, so long as ind...

The UK Government should provide greater clarity about the work that will fill the whole of the 30-year shipbuilding pipeline into the 2030s and 2040s. It is of course difficult to calculate precise military needs beyond 2050. However, the UK …

Recent developments have introduced uncertainty about some orders in the pipeline and whether it sets out a clear ‘drumbeat’ of orders needed to sustain Scottish shipyards. The Fleet Solid Support Ships and the National Flagship are two examples. There has been some media speculation about the Type 32s, although the UK Government have stated: “The strategic and long-term investments continue to be on track and will increase the capability and size of the fleet.”89

Recent developments have introduced uncertainty about some orders in the pipeline and whether it sets out a clear ‘drumbeat’ of orders needed to sustain Scottish shipyards. The Fleet Solid Support Ships and the National Flagship are two examples. There has …

In its response to this report, and in its annual shipbuilding update to the Defence Select Committee, the UK Government should provide an update on the current status of the military shipbuilding pipeline for Scottish naval yards. In particular, it should confirm whether the MOD still intends to order the Type 32 frigates as set out in the National Shipbuilding Strategy Refresh, and whether the timeline for the Type 32s has changed as a result of concerns about the affordability of the initi...

In its response to this report, and in its annual shipbuilding update to the Defence Select Committee, the UK Government should provide an update on the current status of the military shipbuilding pipeline for Scottish naval yards. In particular, it …

As noted in the section above, the Defence Select Committee has recommended that the Ministry of Defence provides an annual shipbuilding update to Parliament, and annual updates on particular programmes including the Type 26 frigate. No such update has yet been provided.97

As noted in the section above, the Defence Select Committee has recommended that the Ministry of Defence provides an annual shipbuilding update to Parliament, and annual updates on particular programmes including the Type 26 frigate. No such update has yet …

The award of the contract to build five additional Type 26 frigates to BAE Systems is welcome news for Scottish shipbuilding, and importantly continues the shipbuilding ‘drumbeat’ into the medium-term. We note that, partly as a consequence of global challenges, the first batch of Type 26 vessels has faced delays and increased costs. 90 HC Deb, 15 November 2022, Col. 16WS [Commons Written Ministerial Statement] 91 Q58 92 Ministry of Defence, Press release: British shipyard awarded £4.2 billion...

The award of the contract to build five additional Type 26 frigates to BAE Systems is welcome news for Scottish shipbuilding, and importantly continues the shipbuilding ‘drumbeat’ into the medium-term. We note that, partly as a consequence of global challenges, …

Given the ongoing global uncertainties we ask the UK Government to provide annual updates on the construction of the Type 26 vessels to both Houses of Parliament. We note that the Defence Select Committee has made a similar recommendation, but that the Ministry of Defence has not yet provided such an update. Fleet Solid Support ships

Given the ongoing global uncertainties we ask the UK Government to provide annual updates on the construction of the Type 26 vessels to both Houses of Parliament. We note that the Defence Select Committee has made a similar recommendation, but …

As discussed in Chapter 2, in November 2022 the MOD took the decision to select Team Resolute as the preferred bidder for the Fleet Solid Support ships contract. The MOD did not select a bid from Team UK, a consortium which included BAE Systems and Babcock.

As discussed in Chapter 2, in November 2022 the MOD took the decision to select Team Resolute as the preferred bidder for the Fleet Solid Support ships contract. The MOD did not select a bid from Team UK, a consortium …

The decision to select Team Resolute bid as the preferred bidder for the upcoming order of Fleet Solid Support ships could create a potential gap in the workstream for the Scottish warship industry.

The decision to select Team Resolute bid as the preferred bidder for the upcoming order of Fleet Solid Support ships could create a potential gap in the workstream for the Scottish warship industry. Type: conclusion | Number: 62 | Response …

In its response, the UK Government should set out how much capacity it expects to now be available in the Scottish warship industry in each of the years between 2025– 2032 as a result of the decision to select Team Resolute rather than Team UK as the preferred bidder for the latest order of Fleet Solid Support ships. It should also set out what work could potentially make use of that capacity in the absence of the FSS. 98 Q87 99 Q156 100 Q157 26 Defence in Scotland: military shipbuilding 3 Sc...

In its response, the UK Government should set out how much capacity it expects to now be available in the Scottish warship industry in each of the years between 2025– 2032 as a result of the decision to select Team …

Another tool the MOD uses to attempt to deliver benefits for local economies and communities is through using social value criteria to evaluate contracts. The MOD has a minimum 20 per cent weighting for social value. which will be applied to shipbuilding competitions.113 We heard that the three areas the MOD will use to evaluate social value are tackling economic inequality, fighting climate change and equal opportunity.114 Some 110 Defence in Scotland: military landscape: Government Response...

Another tool the MOD uses to attempt to deliver benefits for local economies and communities is through using social value criteria to evaluate contracts. The MOD has a minimum 20 per cent weighting for social value. which will be applied …

We heard there was some uncertainty over how MOD assessed social value, and how delivery of social value would be measured. Industry representatives told the Defence Committee that social value was “probably the biggest factor in deciding who will win these contracts, and we don’t understand what the criteria are.”117 Kevin Craven of ADS Group gave us the example of job creation, asking how the MOD would judge “the difference between a bidder offering 200 new jobs for five years compared with...

We heard there was some uncertainty over how MOD assessed social value, and how delivery of social value would be measured. Industry representatives told the Defence Committee that social value was “probably the biggest factor in deciding who will win …

The Defence Secretary acknowledged that the MOD’s understanding of supply chains had been “one of our vulnerabilities” in the past, but said that since then “there has been a real drive across Government, and certainly in our department, to map and understand your supply chain right the way through the system.”126

The Defence Secretary acknowledged that the MOD’s understanding of supply chains had been “one of our vulnerabilities” in the past, but said that since then “there has been a real drive across Government, and certainly in our department, to map …

We heard that historically the Ministry of Defence’s understanding of shipbuilding supply chains had been a vulnerability. The Secretary of State told us this had subsequently improved. The new Defence Supply Chain Strategy’s emphasis on building resilience in supply chains is welcome, and improving understanding of supply chains further will help to achieve this aim.

We heard that historically the Ministry of Defence’s understanding of shipbuilding supply chains had been a vulnerability. The Secretary of State told us this had subsequently improved. The new Defence Supply Chain Strategy’s emphasis on building resilience in supply chains …

The Ministry of Defence should publish data on the composition of shipbuilding supply chains, to assist understanding of how the UK shipbuilding industry is structured. This should include regional breakdowns so that the extent of local supply chains and industry clusters can be better understood by Government and industry. 123 Q138 124 Strategic Command Defence Support, Defence Supply Chain Strategy, 15 November 2022 125 Department for Transport, Maritime 2050: Navigating the Future, 24 Janu...

The Ministry of Defence should publish data on the composition of shipbuilding supply chains, to assist understanding of how the UK shipbuilding industry is structured. This should include regional breakdowns so that the extent of local supply chains and industry …

The creation of the UKSST was widely welcomed by contributors to our inquiry.152 John Howie of Babcock described it as “a key example of…the longer term planning that is needed to ensure that we generate the next generation of the workforce, and that we 144 Professor John Louth (DIS0028) 145 Department for Education, Terms of reference for the UK shipbuilding skills taskforce, August 2022; City of Glasgow College (DIS0035) 146 National Shipbuilding Office, National Shipbuilding Strategy Refre...

The creation of the UKSST was widely welcomed by contributors to our inquiry.152 John Howie of Babcock described it as “a key example of…the longer term planning that is needed to ensure that we generate the next generation of the …

We ask Ministers to consider whether the above recommendation, on closer working between the UK and allies in the EU and US, can be effectively delivered by requesting that the UK be invited to take part in relevant parts of the EU-US Trade and Technology Council. We further ask Ministers to set out the Government’s position on whether a new multi-lateral organisation for industrial collaboration between allied democratic countries is required and, if not, which existing multi-lateral organis...

We ask Ministers to consider whether the above recommendation, on closer working between the UK and allies in the EU and US, can be effectively delivered by requesting that the UK be invited to take part in relevant parts of …

We welcome the decision to launch the ECJU Transformation Programme and the opportunity it provides to improve and reform the work of the ECJU and its relationships with stakeholders. However, given the duty of DIT to inform us of relevant developments, it is disappointing that the Department did not do so on this occasion. Instead, we learned of its existence from the MoD’s Defence and Security Industrial Strategy. We expect the Government to be more proactive in informing us of future polic...

We welcome the decision to launch the ECJU Transformation Programme and the opportunity it provides to improve and reform the work of the ECJU and its relationships with stakeholders. However, given the duty of DIT to inform us of relevant …

It is difficult not to feel a sense of déjà vu as we see British military ambitions which are not entirely matched by resources. Open conflict has returned to Europe and it is disappointing to see that the Government is not preparing for the impact of inflation and insufficient industrial capacity on the production of defence equipment as it looks to meet the new challenges. Paragraph 8) The threat

It is difficult not to feel a sense of déjà vu as we see British military ambitions which are not entirely matched by resources. Open conflict has returned to Europe and it is disappointing to see that the Government is …

In the Integrated Review and the Defence Command Paper, the Government identified and understood the implications of the range of complex and cascading threats faced by the UK. However, the impact of both the Afghan withdrawal and the Russian full-scale invasion of Ukraine are being seemingly dismissed as insignificant and there appears to be no intention to re-visit the conclusions of the documents. UK Defence thus appears as arrogant and unwilling to learn lessons. Events of the last year h...

In the Integrated Review and the Defence Command Paper, the Government identified and understood the implications of the range of complex and cascading threats faced by the UK. However, the impact of both the Afghan withdrawal and the Russian full-scale …

Defence in a Competitive Age and the Defence and Security Industrial Strategy are ambitious papers, aimed at modernising UK defence and ensuring it has equipment suitable for the Information Age. Whilst the conclusions of Defence in a Competitive Age ought to be revisited in light of the conflict in Ukraine, the commitments made in the Defence and Security Industrial Strategy ought to be implemented fully. We recognise that this will take time—we urge the MOD to ensure that the changes are se...

Defence in a Competitive Age and the Defence and Security Industrial Strategy are ambitious papers, aimed at modernising UK defence and ensuring it has equipment suitable for the Information Age. Whilst the conclusions of Defence in a Competitive Age ought …

We welcome the uplift to the MOD’s budget in 2020 and the four-year budget commitment. However, inflationary pressures and an increase in the scale of threat means that it is no longer enough. At the same time, serious concerns persist around a number of procurement programmes. The Department now needs a strategy to regain both Parliament’s and the public’s trust in its procurement abilities. We are The Integrated Review, Defence in a Competitive Age and the Defence and Security Industrial St...

We welcome the uplift to the MOD’s budget in 2020 and the four-year budget commitment. However, inflationary pressures and an increase in the scale of threat means that it is no longer enough. At the same time, serious concerns persist …

As well as an annual report on the implementation of the IR, we recommend the MOD produce an annual evaluation of what has been achieved in their implementation of Defence in a Competitive Age and DSIS. This evaluation should include case studies which demonstrate implementation (examples of integration with other Government Departments, allies and partners, and defence industry). It should also include an account of how certain events have led to a review of thinking and any subsequent decis...

As well as an annual report on the implementation of the IR, we recommend the MOD produce an annual evaluation of what has been achieved in their implementation of Defence in a Competitive Age and DSIS. This evaluation should include …

We note that the 2014 commitment to increase the number of Regular Armed Forces personnel has been superseded by changing strategic priorities. We welcome the 2021 Future Soldier programme to increase the number of battalions in Scotland and that Scotland will host a greater proportion of the Army in the future. (Paragraph 21) Defence industry in Scotland

We note that the 2014 commitment to increase the number of Regular Armed Forces personnel has been superseded by changing strategic priorities. We welcome the 2021 Future Soldier programme to increase the number of battalions in Scotland and that Scotland …

The military shipbuilding sector provides an important pipeline of highly skilled jobs for Scottish industry. While current Royal Navy Type 26 and Type 31 orders are very welcome, the future of the sector is dependent on favourable UK Government policies and a regular ‘drumbeat’ of orders, which we will explore further in our inquiry into military shipbuilding. (Paragraph 39) 36 Defence in Scotland: military landscape

The military shipbuilding sector provides an important pipeline of highly skilled jobs for Scottish industry. While current Royal Navy Type 26 and Type 31 orders are very welcome, the future of the sector is dependent on favourable UK Government policies …

The UK Government should clarify definitively its position on whether current policies potentially allow for Royal Navy warships (such as destroyers, frigates and fleet solid support ships) to be procured and/or built overseas. If this potential exists—which could have a dramatic impact on shipbuilding in Scotland—the MOD should indicate the likelihood of any of its warships being procured or built overseas in the next 30 years. (Paragraph 40) MOD base closures and base expansion

The UK Government should clarify definitively its position on whether current policies potentially allow for Royal Navy warships (such as destroyers, frigates and fleet solid support ships) to be procured and/or built overseas. If this potential exists—which could have a …

The Department told us it had reviewed its approach so that it no longer fell into the trap of setting an excessive number of requirements. It said it now only approved programmes with a reasonable number of requirements, such as the 150 to 200 for the purchase of Boxer and the upgraded Challenger tanks.20 It told us it had now developed a more sophisticated approach, which it had set out in the Defence and Security Industrial Strategy.21 For example, it recognised that acquiring an off-the-s...

The Department told us it had reviewed its approach so that it no longer fell into the trap of setting an excessive number of requirements. It said it now only approved programmes with a reasonable number of requirements, such as …

More widely, the Committee asked whether the Plan was now based on a large number of past assumptions, observing that it does not include funding for capabilities 7 Q2 8 Q8 9 Q86 10 Qq 7–8 11 Q88 12 Q64 13 Q68 14 Q71 15 Q75 16 Q54 17 Committee of Public Accounts, Delivering carrier strike, HC 684, November 2020, paragraph 4 18 Q54 19 C&AG’s report, paragraph 1.8, Qq 62 – 63, Q76 20 Letter to the Committee from the Permanent Secretary, 21 March 2022. 21 Q79 10 Ministry of Defence Equipment Pla...

More widely, the Committee asked whether the Plan was now based on a large number of past assumptions, observing that it does not include funding for capabilities 7 Q2 8 Q8 9 Q86 10 Qq 7–8 11 Q88 12 Q64 …

In line with our general policy on shipbuilding, we call on the Home Office to ensure that any new vessels are built in British yards, to ensure national capacity is maintained (Paragraph 11) Criticism of the policy

In line with our general policy on shipbuilding, we call on the Home Office to ensure that any new vessels are built in British yards, to ensure national capacity is maintained (Paragraph 11) Criticism of the policy Type: recommendation | …

The National Shipbuilding Strategy refresh must finally take on board the consistent recommendations given in successive reports by a range of experts. This includes providing a steady pipeline of work for British shipyards and working collaboratively with industry. The refresh should: • Ensure that warships are built in UK yards and that this designation continues to include the Fleet Solid Support ship contract, as well as the future replacements for the Tide and Wave class vessels. • Revis...

The National Shipbuilding Strategy refresh must finally take on board the consistent recommendations given in successive reports by a range of experts. This includes providing a steady pipeline of work for British shipyards and working collaboratively with industry. The refresh …

The Bank has been insufficiently curious when identifying where money lent through the schemes, including by Greensill, has ultimately gone. Companies have borrowed around £30 billion under CBILS and CLBILS. The schemes’ rules require these funds be used to support business activity in the UK. However, the Bank does not track where the money it has lent as part of the schemes has gone and cannot guarantee the money has not been offshored. The Bank is unable to confirm how the £350 million Gre...

The Bank has been insufficiently curious when identifying where money lent through the schemes, including by Greensill, has ultimately gone. Companies have borrowed around £30 billion under CBILS and CLBILS. The schemes’ rules require these funds be used to support …

The Department’s enquiries of the Bank during Greensill’s accreditation created a damaging perception of interference, though the Bank asserts that this did not affect its judgement. The Department had eight email exchanges with the Bank between April and September 2020 requesting updates on Greensill’s accreditation to CLBILS and whether it would be allowed to lend up to £200 million. The Department’s interest in Greensill’s accreditation was based on the potential for the scheme to support ...

The Department’s enquiries of the Bank during Greensill’s accreditation created a damaging perception of interference, though the Bank asserts that this did not affect its judgement. The Department had eight email exchanges with the Bank between April and September 2020 …

The Department continually fails to learn from its mistakes. The Department has been delivering equipment programmes for decades and has overseen many expensive failures. There have been at least 13 formal reviews of defence procurement policy over the last 35 years which have provided the Department with opportunities to take stock and learn from experience. We were therefore shocked to learn that the Department had only established a central register of learning from experience (LFE) in Dec...

The Department continually fails to learn from its mistakes. The Department has been delivering equipment programmes for decades and has overseen many expensive failures. There have been at least 13 formal reviews of defence procurement policy over the last 35 …

The Department spends significant sums on the developmental stages of programmes while suppliers may not be paying their fair share. The Department argued that it is standard practice to pay for work against agreed milestones across areas such as development, demonstration, training and manufacture.33 However, given the number of programmes that have encountered problems, better incentivisation of suppliers could be sought through securing more substantial private investment up-front. For exa...

The Department spends significant sums on the developmental stages of programmes while suppliers may not be paying their fair share. The Department argued that it is standard practice to pay for work against agreed milestones across areas such as development, …

The Department’s willingness and ability to systematically record its learning from existing programmes is critical to securing improvements in the future. There have been at least 13 formal reviews of defence procurement policy over the last 35 years, which have provided the Department with opportunities to take stock and learn from experience.41 While existing guidance in the Department is clear on the importance and benefits of recording and sharing learning from experience (LFE), the Depa...

The Department’s willingness and ability to systematically record its learning from existing programmes is critical to securing improvements in the future. There have been at least 13 formal reviews of defence procurement policy over the last 35 years, which have …

In 2018, the Department established a Strategic Partnering Programme (SPP) to maximise commercial leverage with its 19 most important suppliers by improving contract performance and managing strategic risks.45 The Department told us that the 38 C&AG’s report, para 3.16 39 C&AG’s report, para 3.8 40 C&AG’s report, paras 3.4–3.5 41 Q 3 42 C&AG’s report para 5.12 43 C&AG’s report para 5.13 44 Q 3 45 C&AG’s report, paras 3.17–3.18 Improving the performance of major defence equipment contracts 15 ...

In 2018, the Department established a Strategic Partnering Programme (SPP) to maximise commercial leverage with its 19 most important suppliers by improving contract performance and managing strategic risks.45 The Department told us that the 38 C&AG’s report, para 3.16 39 …

In addition to delaying the publication of the Integrated Review, it seems inevitable that the pandemic must also influence its conclusions. Coronavirus has highlighted serious deficiencies in the UK’s domestic resilience in the face of an anticipated threat. We have agreed this Report before publication of the Integrated Review, but but believe that the Review and the funding of its conclusions must take into account the significance of Defence’s role in underpinning the UKs’ domestic resili...

In addition to delaying the publication of the Integrated Review, it seems inevitable that the pandemic must also influence its conclusions. Coronavirus has highlighted serious deficiencies in the UK’s domestic resilience in the face of an anticipated threat. We have …

The Defence equipment programme is routinely jeopardised by factors that drive inflation in defence projects. Defence projects are often long-term, complex and involve new technologies, which makes them vulnerable to cost inflation. This Committee has highlighted that inflation in equipment projects can result from factors specific to the defence sector; factors which the Department admitted are not fully understood. We therefore urge the Department to develop a better understanding of these ...

The Defence equipment programme is routinely jeopardised by factors that drive inflation in defence projects. Defence projects are often long-term, complex and involve new technologies, which makes them vulnerable to cost inflation. This Committee has highlighted that inflation in equipment …

In our report on the Equipment Plan 2019–2029, we expressed our concern that the Department had still not established an affordable long-term investment programme in military equipment and had missed opportunities to take the necessary difficult decisions to develop an affordable plan. We urged the government to set a balanced defence budget that reflects new priorities and ambitions in developing capabilities to meet the evolving threats of modern warfare.11 Yet we continue to see the damagi...

In our report on the Equipment Plan 2019–2029, we expressed our concern that the Department had still not established an affordable long-term investment programme in military equipment and had missed opportunities to take the necessary difficult decisions to develop an …

In November 2020, the government announced that it would provide an additional £16.5 billion of funding over the next four years, which represents a 10% increase in the defence budget over this period.45 The Department said that HM Treasury has given it a planning assumption that its budget will grow in real terms by 0.5% per year for the subsequent six years and, as a consequence, it estimated that the Spending Review settlement would result in over £30 billion of additional funding over the...

In November 2020, the government announced that it would provide an additional £16.5 billion of funding over the next four years, which represents a 10% increase in the defence budget over this period.45 The Department said that HM Treasury has …

The Department confirmed that the Integrated Review—which had not been published at the time we took evidence—would contain substantially different capability choices from the current Equipment Plan.55 The government intends that the additional funding will be invested in capability enhancements and new technologies, and be used to help the Department to address the financial problems it has faced over the last five years.56 As Ministers had not yet made final decisions, the Department could ...

The Department confirmed that the Integrated Review—which had not been published at the time we took evidence—would contain substantially different capability choices from the current Equipment Plan.55 The government intends that the additional funding will be invested in capability enhancements …

Faced with an unaffordable programme, we questioned the Department’s ability to achieve value for money from its equipment expenditure. We have seen many examples of the Department not buying the quantity of kit or the number of capabilities that it originally intended to buy; such as Typhoons or destroyers.74 The Department acknowledged that, historically, it has bought capabilities with sophisticated rather than utilitarian specifications, although it pointed to the Type 31 acquisition as a...

Faced with an unaffordable programme, we questioned the Department’s ability to achieve value for money from its equipment expenditure. We have seen many examples of the Department not buying the quantity of kit or the number of capabilities that it …

While pointing out that this was also a problem encountered by other countries, the Department acknowledged that it did not have a good understanding of the unique factors that drive inflation on defence projects, and that there was work to be done to better understand whether there are better ways of managing or predicting it.77 Defence projects are often long-term, complex and involve new cutting-edge technologies. For example, it is likely to be buying Lightning II jets for another 20 year...

While pointing out that this was also a problem encountered by other countries, the Department acknowledged that it did not have a good understanding of the unique factors that drive inflation on defence projects, and that there was work to …

We are concerned that the Ministry of Defence, and in particular Defence Equipment and Support may not have sufficient technically qualified staff and capacity to manage effectively the multiple armoured vehicle procurement and upgrade programmes that are currently underway. Given both the large amounts of taxpayer’s money at stake and the importance of such programmes for our war fighting capability should deterrence fail, this appalling situation has now become completely unacceptable and m...

We are concerned that the Ministry of Defence, and in particular Defence Equipment and Support may not have sufficient technically qualified staff and capacity to manage effectively the multiple armoured vehicle procurement and upgrade programmes that are currently underway. Given …

We support the Ministry of Defence’s initiative to develop a Land Industrial Strategy. The LIS should place the land sector on an equal footing with the Air and Maritime sectors, providing industry with certainty for the coming decades and ensuring the Army has access to the technical and manufacturing base that will facilitate the development of new technologies as armoured warfare capabilities evolve. The Strategy should also make clear sustaining capability relies on co-operation with allies.

We support the Ministry of Defence’s initiative to develop a Land Industrial Strategy. The LIS should place the land sector on an equal footing with the Air and Maritime sectors, providing industry with certainty for the coming decades and ensuring …

We agree that it is important the Ministry of Defence maximises the collaborative opportunities offered by the recent investments in the UK’s armoured vehicles sector. The Department should ensure that it leverages these advantages by making a clear decision about its participation in the Main Ground Combat System. A repeat of the MRAV/Boxer debacle would be unacceptable. (Paragraph 105) 58 Obsolescent and outgunned: the British Army’s armoured vehicle capability

We agree that it is important the Ministry of Defence maximises the collaborative opportunities offered by the recent investments in the UK’s armoured vehicles sector. The Department should ensure that it leverages these advantages by making a clear decision about …

We trust the creation of and adherence to the proposed Land Industrial Strategy will improve the UK’s competitiveness in this sector. The Ministry of Defence, the British Army and their Industry counterparts must work together to map out the coming decades for the armoured vehicle sector. (Paragraph 107) Conclusion

We trust the creation of and adherence to the proposed Land Industrial Strategy will improve the UK’s competitiveness in this sector. The Ministry of Defence, the British Army and their Industry counterparts must work together to map out the coming …

As a result of the Ministry of Defence’s approach of encouraging inward investment, foreign involvement in the UK defence supply chain is widespread, with the UK hosting a broad range of UK-based and international suppliers. This approach has brought many benefits to the UK defence industry and wider economy.

As a result of the Ministry of Defence’s approach of encouraging inward investment, foreign involvement in the UK defence supply chain is widespread, with the UK hosting a broad range of UK-based and international suppliers. This approach has brought many …

The Ministry of Defence should assess the implications of Chinese ownership of the companies listed within this report.

The Ministry of Defence should assess the implications of Chinese ownership of the companies listed within this report. Type: conclusion | Number: 4 | Paragraph: 24 | Response status: under_consideration Government response: The Government notes the Committee’s recommendation and would …

The Ministry of Defence’s open and country-agnostic approach to foreign involvement means that the defence supply chain has been open to potentially hostile foreign involvement, with reports of companies being owned and influenced by foreign Governments whose values and behaviours are at odds with our own and who are known to engage in intellectual property theft. The Ministry of Defence should publish a list of countries it Foreign Involvement in the Defence Supply Chain 31 considers friendl...

The Ministry of Defence’s open and country-agnostic approach to foreign involvement means that the defence supply chain has been open to potentially hostile foreign involvement, with reports of companies being owned and influenced by foreign Governments whose values and behaviours …

The relative indifference of the Ministry of Defence to the possible relocation of General Electric’s Rugby facility was concerning. We are pleased that this important industrial capacity ultimately remained in the UK. The Ministry of Defence should prioritise the maintenance of sovereign capability within the UK defence industry.

The relative indifference of the Ministry of Defence to the possible relocation of General Electric’s Rugby facility was concerning. We are pleased that this important industrial capacity ultimately remained in the UK. The Ministry of Defence should prioritise the maintenance …

Venture capitalism helps to drive innovation in defence and associated industries. However, we heard concerns that venture capitalist funding could represent an avenue for hostile foreign investors to gain entry into the UK defence supply chain. The Minister for Business and Industry told us that the National Security and Investment Bill legislates in this area to protect national security-sensitive entities.

Venture capitalism helps to drive innovation in defence and associated industries. However, we heard concerns that venture capitalist funding could represent an avenue for hostile foreign investors to gain entry into the UK defence supply chain. The Minister for Business …

The defence industry in the UK has remained broadly resilient in the face of financial pressures resulting from the COVID-19 pandemic. Unfortunately, the same cannot be said for all businesses within the defence supply chain, particularly those that also operate in commercial aerospace and are small 32 Foreign Involvement in the Defence Supply Chain and medium sized enterprises. The financial vulnerability of such businesses could increase the risk of hostile foreign involvement in the defenc...

The defence industry in the UK has remained broadly resilient in the face of financial pressures resulting from the COVID-19 pandemic. Unfortunately, the same cannot be said for all businesses within the defence supply chain, particularly those that also operate …

The Ministry of Defence and wider Government have provided substantial support to businesses in the defence supply chain. Unfortunately, we heard that this support has not always reached its intended beneficiaries or had the intended consequences. The Ministry of Defence should improve its communication strategy with small and medium sized enterprises to ensure that they are aware of the support that they are eligible for at this difficult time.

The Ministry of Defence and wider Government have provided substantial support to businesses in the defence supply chain. Unfortunately, we heard that this support has not always reached its intended beneficiaries or had the intended consequences. The Ministry of Defence …

The commercial aerospace industry remains financially fragile. The Ministry of Defence should already be aware of the close links between this industry and the defence supply chain and should consider what more it can do to support businesses which operate here, particularly small and medium sized enterprises.

The commercial aerospace industry remains financially fragile. The Ministry of Defence should already be aware of the close links between this industry and the defence supply chain and should consider what more it can do to support businesses which operate …

The COVID-19 pandemic impacted the supply chains of defence businesses as well as their finances. Global supply chains for defence represent a vulnerability, especially when these supply chains include materials from countries not closely aligned with the UK. The Ministry of Defence should set out how it is proactively supporting efforts from defence businesses to seek domestic alternatives for supply and to shorten supply chains. (Paragraph 72) Foreign Involvement in the Defence Supply Chain...

The COVID-19 pandemic impacted the supply chains of defence businesses as well as their finances. Global supply chains for defence represent a vulnerability, especially when these supply chains include materials from countries not closely aligned with the UK. The Ministry …

In producing a national strategy for critical and emerging technologies, the Government should assess the UK’s domestic research and development capability for each technology area as well as the capability of its allies. As the Government looks 5G market diversification and wider lessons for critical and emerging technologies 53 to strengthen research and development in the UK, this assessment should be used to identify particular critical and emerging technology areas of strategic importanc...

In producing a national strategy for critical and emerging technologies, the Government should assess the UK’s domestic research and development capability for each technology area as well as the capability of its allies. As the Government looks 5G market diversification …

There remains considerable uncertainty over the Department’s future ambitions for Carrier Strike. The government is re-assessing its defence priorities in the Integrated Review of Security, Defence, Development and Foreign Policy (the Review), which it is due to publish in November 2020. We are extremely frustrated that the government has failed on several occasions to hold a strategic spending review to address the defence budget’s unaffordability, which has resulted in a debilitating lack o...

There remains considerable uncertainty over the Department’s future ambitions for Carrier Strike. The government is re-assessing its defence priorities in the Integrated Review of Security, Defence, Development and Foreign Policy (the Review), which it is due to publish in November …

It remains to be seen whether the foreign policy aspect of the Review will produce a distinct Foreign Policy Strategy or whether this will be combined with a National Security Strategy. Whether the Review produces one, two, or three documents, we have heard that it must first clearly identify the desired “ends” of the UK’s security, defence, development and foreign policy. It is only by developing a detailed conceptual framework for the UK’s security and foreign policy that the Review will be...

It remains to be seen whether the foreign policy aspect of the Review will produce a distinct Foreign Policy Strategy or whether this will be combined with a National Security Strategy. Whether the Review produces one, two, or three documents, …

Given that systemic challenges have not been resolved in the previous thirteen reviews of defence procurement, we doubt that the Integrated Review will come up with even a short-term fix. We believe that the Review ought to address the strategic issues that should underpin the UK’s approach to defence procurement, in order to provide a sound basis to address these challenges in the future. The UK’s capability priorities and force structure should inform the answers to the following strategic ...

Given that systemic challenges have not been resolved in the previous thirteen reviews of defence procurement, we doubt that the Integrated Review will come up with even a short-term fix. We believe that the Review ought to address the strategic …

We have heard that external engagement in the Review process provides a challenge function to the Government’s understanding, can act as an early signpost to stakeholders who can contribute to achieving the UK’s security and defence priorities and contributes to the legitimacy of the review’s outcomes. External consultation must be structured in a clear and transparent way so that all interested stakeholders can contribute. In some cases, there may be existing mechanisms for Government to sol...

We have heard that external engagement in the Review process provides a challenge function to the Government’s understanding, can act as an early signpost to stakeholders who can contribute to achieving the UK’s security and defence priorities and contributes to …