Exeter University research published on defence spending shift from public to private sector
Professor Mickey Howard, Professor of Supply Management at the University of Exeter Business School comments on British defence spending.
Admiral Lord West, former First Sea Lord has told MPs that the Ministry of Defence has effectively "run out of money".
Defence programmes in the UK being delayed and going over budget is nothing new. In fact, more than 30 per cent of our defence programmes have fallen into this category in the past. While issues over government spending may again be given as being partly responsible for the hold-up, this is not the only factor, nor indeed are the government and the Navy the only stakeholders in defence decisions.
When procuring complex programmes such as new warship platforms, a much wider range of considerations must be used when examining overall performance. Research at the University of Exeter Business School shows that the boundary between where the public sector - the Ministry of Defence - and private contractors - ship builders, defence system suppliers – start and finish has been continuously shifting over the past 30 years as successive governments have attempted to mitigate costs, whilst encouraging industry to take more risk and responsibility.
The desire to ‘keep buying British’ under the banner of sovereign capability has only exacerbated an already difficult defence sourcing equation. As increased outsourcing of warship construction, maintenance and repair has occurred, even infrastructure such as UK dockyards are now in the control of a few large firms in the private sector. It could be argued that we have reached a tipping point, where control of much of our warship design, build and support capability lies outside the direct influence of government agencies.
Given the recent unfortunate events in maritime defence procurement in terms of both delays to the Type 26 frigate and deficiencies to the Type 45 destroyer power unit, the government and MoD must reconsider just how much responsibility private firms can realistically be expected to handle in matters which concern our national defence.
Some warships are built outside of Britain, so decisions over selection of prime contractors should be relaxed to give the MoD better options over ship design and price.
The MoD should perhaps learn some lessons from neighbouring European and NATO countries who, instead of buying bespoke new ships, lease fleets of common platform, purpose-built warships for a fixed annual fee that includes the cost of maintenance and repair. Britain may still successfully argue that it is an island nation that requires its maritime defence capability, but not at any price.