Pace Through Integration? UK Defence Attempts Procurement Reform, Again

commentary

Mar 20, 2024

Still from a video published by the Ukrainian Armed Forces showing a Ukrainian soldier using a British-supplied Next-Generation Light Anti-Tank Weapon (NLAW) to destroy a Russian armored vehicle in an unspecified location in Ukraine, April 11, 2022, photo by Armed Forces of Ukraine/Aerorozv via Reuters Connect

Still from a video published by the Ukrainian Armed Forces showing a Ukrainian soldier using a British-supplied Next-Generation Light Anti-Tank Weapon (NLAW) to destroy a Russian armored vehicle in an unspecified location in Ukraine, April 11, 2022

Photo by Armed Forces of Ukraine/Aerorozv via Reuters Connect

Two years of warfare in Ukraine have fundamentally shifted the landscape of defence. NATO allies have demonstrated impressive commitment to supporting a partner in need and the war has driven an unprecedented drive towards European collective defence.

Such support carries a cost. The United Kingdom alone has pledged almost £12 billion in overall support to Ukraine since February 2022, of which £7.1 billion is for military assistance. Just last week, Defence Secretary Grant Shapps announced the supply of another thousand drones. The war has exposed a challenge: how can allies gear their defence industries up to deliver materiel to Ukraine while remaining fit for purpose at home?

The ambition to speed up the delivery of defence capabilities is at the heart of recently announced reforms from the UK Ministry of Defence. By introducing a new integrated procurement model (PDF), the Ministry aims to consciously integrate lessons learned from past programmes—successful and otherwise—and, in the words of Defence Minister James Cartlidge, make “every day count.”

The war has exposed a challenge: how can allies gear their defence industries up to deliver materiel to Ukraine while remaining fit for purpose at home?

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On paper, the new model seems to embed many approaches RAND has identified over the years to address some of the persistent challenges in defence acquisition. As successive governments have found, defence acquisition is almost uniquely difficult. Budgetary planning is difficult in a market defined by limited competition, high barriers for companies seeking to enter it, and an ever-changing geopolitical backdrop: now more than ever.

In the integrated model, the government and industry engage much earlier than before in identifying future needs and requirements. The reforms package calls for “exportability” to be borne in mind from the start of all programmes and for a “spiral development” approach to capability. The latter is supposed to drive faster delivery and enable upgrades and modifications as technology and threats evolve. All these reforms are likely to be welcomed by the defence industry, as they should improve how quickly new products can reach the market as well as their potential for commercial success through exports. There are still gaps to be addressed through further guidance, though. For example, what does “spiral development” truly mean in practice? As is common in defence, this often-used phrase means different things to different people.

There is also a welcome recognition of the need for an honest dialogue between government and industry on risk as it evolves in acquisition programmes, achieved through “a new alliance” between government and industry, with government for its part being “more transparent” on its acquisition needs. The reforms also reflect a desire to drive greater integration, rather than competition, across Services and domains (land, sea, air, and cyber) by adopting a portfolio-style approach to acquisition. The Ministry, like many public sector bodies, has long aspired to avoid duplication of effort and achieve better integration with partners and between its own departments in procurement.

If these ambitions could be achieved, they certainly have the potential to improve the Ministry's approach to procurement. The integrated procurement model is creditable. In 2022, RAND Europe was asked to inform the delivery of the Defence Space Strategy back in 2022. As space strategy was a new domain offering a “blank slate,” researchers highlighted many of the approaches now shown in these reforms as good practices to be baked into space capability acquisition. As the war in Ukraine has shown us, a faster and smarter approach to defence acquisition is required across NATO and beyond. The House of Commons Defence Committee summed this up bluntly in their 2023 parliamentary report (PDF) on procurement in the UK: “It is broken—and it's time to fix it.”

However, as often is the case in policy reform, the proof of the pudding is in the eating. As yet, there is very little detail on how the new strategy would be implemented—and effective implementation is exactly what is needed to translate the vision into new or improved processes and structures.

Next, changes will need to be embraced by teams across defence, industry, and government. UK defence acquisition processes have been frequently tweaked in recent history, from the Bernard Gray Review of Acquisition in 2009, to the launching of Defence Equipment & Support as a standalone body in 2014, which means that energising teams to accept the latest round of transformation can be a real challenge. Coming within a week of a significant new UK strategy on drones (PDF) which also identified acquisition improvements, and alongside a range of NATO initiatives, there is a risk of trying to change a lot at once without a clear sense of prioritisation and coherence.

Defence is, to an extent, culturally defined by a tendency towards optimism bias and siloes, which are persistently difficult to break.

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The introductory document released by the MOD in February recognises that embedding these reforms will require no less than a cultural shift, something that has repeatedly been called for over a long period of time; it was the subject of Bill Kincaid of RUSI's book 'Changing the Dinosaur's Spots: The Battle to Reform UK Defence Acquisition' as long ago as 2008. It will take time and focused attention to achieve this. Enabling spiral acquisition, for example, will require greater risk appetite. Defence is, to an extent, culturally defined by a tendency towards optimism bias and siloes, which are persistently difficult to break. Perhaps a new model and new process will address these underlying issues, but changing behaviours and culture throughout an enterprise with big budgets and responsibility for programmes that span decades is no small challenge.

Most importantly, whilst processes, culture and pace matter in defence acquisition, money talks. The UK's Spring Budget announcement this year made absolutely no mention of defence in the short term. Although there is a line on an £11 billion investment in defence to take UK defence spending to 2.3 percent of GDP, this is a repetition of announcements in Spring 2023 (PDF). Perhaps, then, the underlying challenge for UK defence is fundamentally about balancing ambition and capacity. The United Kingdom has shown great resolve and efficiency in providing Ukraine with the equipment that it needs, but must now ensure that this approach can be replicated and scaled up to serve its own.


Lucia Retter and Stuart Dee are research leaders in defence and security at RAND Europe.

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