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Defence Committee launch new inquiry into defence industrial policy: procurement and prosperity

23 July 2019

Background

In 2015, the Strategic Defence and Security Review introduced a new National Security Objective to “Promote our Prosperity”. The Defence Industrial Policy refresh published in 2017 reaffirmed that “competition and strategic choice remain at the heart of our approach to defence procurement”, whilst committing to taking measures to protect freedom of action and operational advantage on national security grounds. It also laid out a three-pronged refresh to industrial policy, including:

  • Improving the way defence delivers wider economic and international value, and national security objectives;
  • Helping UK industry in its plans to be internationally competitive, innovative and secure; and
  • Making it easier to do business with defence.

Supporting exports is now a core task of the MoD and has been incorporated into the National Shipbuilding Strategy (2017) and the Combat Air Strategy (2018).
Philip Dunne MP was commissioned by the then Defence Secretary to produce a report on “Growing the Contribution of Defence to UK Prosperity” which was published in 2018. He recommended that the MoD produce clearer, practical guidance on the prosperity factors defence is most likely to consider, the reasons for their importance and the primary metrics which might be used in assessing their value and relevance.

The Committee held an oral evidence session on 21 May 2019, looking into the procurement of Fleet Solid Support Ships and the planned (but now cancelled) move of a propulsion capability outside the UK. We are now expanding our inquiry to consider broader trends in defence industrial policy in relation to procurement and prosperity.

Call for evidence

The Committee would welcome written evidence addressing the following questions:

  • Is the current Defence Industrial Policy effective? Is a new Defence Industrial Strategy required?
  • What are the national skills and competencies needed for a successful UK defence industrial sector? How can the UK ensure, and assure, that these are maintained in the right place at the right time for the right cost?  
  • Does the market for Defence systems, products and services have any specific characteristics, which differentiates it from other markets? Does international collaboration limit the potential for defence exports?
  • Is tension between competition and strategic choice inevitable?  
  • Should the UK adopt a formal Offset/Made in the UK policy? What impact would this have on the national and international defence markets?
  • What is considered in assessments of “prosperity” and “value for money” in defence procurement? What consideration is given to the local economy, skills retention and balancing the positive financial impact across the regions and nations of the UK?
  • What progress has been made in implementing the recommendations from Philip Dunne’s report?
  • Does the MoD understand the risks and opportunities in the Defence supply chain, and the procurement strategies of other buyers in the market?
  • What has been the impact of reforms to defence procurement and acquisition? How should Head Office and DE&S acquisition reform be aligned to defence industrial policy and strategy?
  • Given that major capability acquisition programmes are international by design—the Combat Air Strategy and Type 26 frigate for example—how does a modern national defence research and industrial policy successfully manage cross-border long term partnerships and align with the industrial approach of allies and partners? What lessons can be learnt from other defence exporting countries?

The Committee invites written submissions for this inquiry, which need not cover all the points above. These should be submitted via the inquiry page on the Defence Committee website.

The deadline for written evidence is 9 September 2019

Further information

Image: Crown Copyright

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