The story about the MOD’s equipment investment plan for the next 10 years features this morning, including in the Financial Times (subscription only), Defense News, The Times (page 4 of the paper) and the Daily Mirror (on page 2).
You can read more on GOV.UK here, and Defence Minister Philip Dunne has written a blog on the Equipment Plan – see more below.
Also in the news today is the annual Stonewall Index.
A positive story in The Times (page 22) reports that the British Army, Royal Navy and the RAF have been ranked among the top 100 gay-friendly employers only 15 years after it became legal to be openly homosexual in the forces. Defence Secretary Michael Fallon said:
“I’m tremendously proud of this ringing endorsement from Stonewall – our Armed Forces have worked tirelessly over the last 15 years to become more inclusive employers.
“Making sure that our Armed Forces fully reflect our society is a key objective. And we know that a more diverse organisation is more effective – people perform better when they can be themselves.
“That’s why we work hard to attract and retain the most talented individuals, whatever their gender, race or sexual orientation. So, all three services being in the top 100 best places to work for lesbian, gay and bisexual staff, and the Army in the top 50, is truly outstanding.”
Keep an eye on GOV.UK and our Twitter feed (@DefenceHQ) for more information later today.
Defence Minister Philip Dunne has set out his thoughts on the Equipment Plan for 2014
Lord Levene confirmed last month in his third annual review that this Government’s transformation of Defence is working and that ‘Leopards Can Change Their Spots’.
I agree the MOD has made huge progress and want to amplify what we have achieved since 2010 to transform the traditional ‘hospital pass’ that too often characterised defence procurement. To do so, I'm launching a series of blog posts focusing on how our investments in equipment across all domains are making a major difference to our Armed Forces' capability.
To set the scene, I begin by looking at the annual Equipment Plan summary – laid before Parliament yesterday.
This is the third consecutive year we have published our long term Equipment Plan – setting out details of our plans for spending around £163 billion on new equipment and equipment support over the next decade.
How far we’ve come
The plan – which you can read in full here – is a concrete demonstration of how far we have come since 2010. We have delivered a realistic and affordable plan, with substantial headroom and flexibility built in.
Thanks to a radical transformation programme and the hard work of everyone within the MOD and our Armed Forces, we have turned our back on the past.
We’ve filled the £38 billion black hole in the defence budget, got a firm handle on our big-ticket procurement projects and overhauled the way we undertake defence procurement and acquisition.
In the process we’ve transformed MOD into a leaner and more efficient machine that equips our Armed Forces with the kit they need in a world of burgeoning threats at greater value for money for taxpayers.
The details of our investment in cutting-edge next generation capability are listed in the plan.
A plan that is already delivering
And over the past year we have been able to make a steady stream of investments in new capability.
On land, this included the biggest Armoured Fighting Vehicle order for the British Army in a generation – a £3.5 billion contract for 589 highly advanced Scout specialist vehicles.
At sea, we saw the floating up of the Royal Navy’s flagship Queen Elizabeth Carrier, followed by news that it will be joined in service by our second operational aircraft carrier. We also contracted to build three new offshore patrol vessels for the Royal Navy.
Beneath the oceans, we launched HMS Artful, the third of seven Astute-class submarines.
The Royal Air Force received the first A400M Atlas transport aircraft which will become the backbone of one of the most modern Air Mobility military fleets in the world.
Our first new RC-135 Airseeker surveillance aircraft came into service – cutting its operational teeth over Iraq.
All three services received additions to their helicopter fleets, with Puma Mk2 and Mk6 Chinooks for the RAF, new Merlin Mk 2s for the Royal Navy and Wildcats for the Army.
Finally – as an illustration of just how much we have achieved – the Prime Minister announced last July an extra £800 million of investment in intelligence and surveillance assets – so vital in a world of ever more sophisticated global threats.
I’ve only touched on what is a long list, but also a powerful statement of where we have got to in transforming the defence capabilities available to our Armed Forces.
If you read the report you will see there is much more capability due to be delivered over the next ten years.
A plan that has independent endorsement from the NAO
Significantly, the National Audit Office in its report released yesterday also recognises how far we’ve come.
This year, for the first time, the NAO’s findings on the Equipment Plan have been merged with it’s assessment of the MOD’s Major Projects Report (MPR).
There’s much good news. Of the 11 projects within the MPR sample of 17 that have passed the main investment decision point, the forecast cost has reduced by £397 million only 2 the in-service dates have been increased by a matter of months rather than years.
This is the MOD’s best cost performance since 2005 and the best time performance since 2001.
More work to be done
But there is always more to be done.
The NAO has highlighted areas where we must continue to improve.
Whether honing our forecasting accuracy or sharpening our focus on delivering equipment support more efficiently.
That work is already underway.
The NAO also questioned whether the £4 billion of efficiency savings we have earmarked in the Equipment Support Plan are achievable.
Going on to suggest our procurement and support cost forecasts are over-optimistic with not enough contingency in the pot to absorb cost growth.
Firmly on the right track
Whilst noting their concerns, I do not share them.
We are already making good progress on savings, including identifying nearly £3 billion of potential savings in the support budget over the next ten years, and securing some £300m savings from renegotiating PFI contracts let by the previous administration.
When it comes to managing cost growth, I take some reassurance from the fact that our £4.6 billion central contingency provision exists over and above routine risk provisions within individual project budgets.
What is more, we will also have around £8 billion of extra headroom for equipment capability requirements yet to be identified by Service Chiefs.
Together, these provide flexibility to address any cost growth within the core equipment plan and will allow us to fund extra programmes that are a high priority for Defence.
Competence not chaos
The contrast with the previous administrations legacy couldn’t be starker: where there was a £38 billion budget black hold, now there is a balanced budget; where there was chaos, now there is competence; where there were cost-overruns, now there are cost savings; where equipment deliveries were years late, now they are either on time or a few months behind.
That said, I am far from complacent and I remain committed to working with the NAO to increase the confidence that Parliament, the taxpayer and Industry can have in the Equipment Plan’s deliverability.
But, most importantly, I am confident that through this plan, brought in by this Government over the past five years, we will achieve the vision set out in the Strategic Defence and Security Review – a vision of versatile, agile and battle-winning armed forces equipped with the kit they need, when they need it.