Report by the NAO on MOD Armoured Vehicle Procurement

The National Audit Office (NAO) has produced a report (20th May 2011) on The Cost Effective Delivery of Armoured Vehicle Capability. The NAO press release although couched in unemotional language, is damning of the Ministry of Defence (MOD) standard procurement process for Armoured Vehicles.
This is the key part of the Press Release dealing with the Standard Procurement Process:

The suspension and cancellation of a number of key armoured vehicle projects since the 1998 defence review has resulted in the Armed Forces facing a significant shortage in the principal armoured vehicles they require, until at least 2024-2025.

Today's National Audit Office report found that the Department's standard acquisition process has been undermined by a combination of over-ambitious requirements and unstable financial planning. Despite the commitment of considerable resources, since 1998, the MOD has received only a fraction of the armoured vehicles it has set out to buy through its standard acquisition process.

The Department's reluctance to compromise in setting technologically demanding requirements under its standard acquisition process has put the timely and cost-effective delivery of the equipment at risk. Unwieldy procurement processes have not coped well with rapid changes to equipment requirements in the light of operational experience, resulting in a number of armoured vehicle projects being delayed or abandoned.

Armoured Vehicle projects have also suffered from unstable budgets and continual changes to financial plans. As the NAO reported in its Strategic Financial Management of the Defence Budget report, the cycle of unrealistic planning followed by cost overruns has led to a need to find additional short-term savings on a regular basis. Spending to date includes £321 million on cancelled or suspended projects and a further £397 million funding on-going, but delayed, projects. Without significant additional investment sustained over time, the Department will have a shortfall in the armoured vehicles it says it needs until at least 2024-2025.

I am reminded of some of the comments and conclusions of the Review of Acquisition for the Secretary of State for Defence by Bernard Gray on the 15th October 2009 - For those without the time to read through the near 300 Page report should check out some of the other links on the MOD - Review of Acquisition Page.

Returning to the new NAO Report, it does have some 'nicer' things to say about the MOD's handling of Urgent Operational Requirements:

To address shortfalls in equipment for current operations, such as in Afghanistan, the Department has placed greater reliance on the Urgent Operational Requirements (UORs) since 2003, at an additional cost of £2.8 billion. This has been more successful and has significantly improved protection levels for UK forces against today's threats. The UOR process is not a sustainable substitute for the standard acquisition process. While some UOR vehicles may be taken into the core fleet, the Department does not expect these vehicles to offer a long-term solution to its armoured vehicle needs.

The 'more successful' phrase might, I feel be disputed, certainly Richard North when he was covering the UOR purchases in his Defence of the Realm Blog would probably disagree. My view is the rash of 'panic' buying by the MOD did eventually meet operational requirements, but the process was expensive in both in British Casualties and Financially enormous.

The Government's initial reaction to the report was given by Defence Equipment minister Peter Luff a Career Politician with no Defence Experience prior to him appointment as a minister, who said:

"The report highlighted serious flaws in the process left by the previous Labour government.We are absolutely committed to a funded and realistic defence equipment programme to ensure our Armed Forces are properly equipped and taxpayers get value for money," he said. "Given the disastrous state of the department's finances we inherited, this change will take time."

Whilst it is true that the previous Labour Government on Defence Policy in general and Defence Procurement in particular was very poor, the same can be said of all previous Governments, Conservative, or Labour going back as far as the 1960's.
When this is coupled with the culture that exists in the MOD, also stretching back into the 1960's it is surprising the British Armed Services ever get the right equipment, almost never on time and never at the budgeted cost.

Sadly this NAO Report after the initial Media furore dies down and some temporary discomfort for some Officials in the MOD, being asked difficult questions, will like other Similar Reports be quietly ignored.

NAO The Cost Effective Delivery of Armoured Vehicle Capability Report Links:
Press Release
Full Report - The Cost Effective Delivery of Armoured Vehicle Capability -  PDF (730kb)
Executive Summary

Media Reaction to the Report:
BBC-Armed forces 'face vehicle shortages until 2025'
Guardian -Auditor attacks chaos in equipping British troops
Independent -Afghan war 'to leave UK short of armour'
Mail Online -MoD 'cost lives' by wasting £718m on vehicles never builtMirror -Troops 'face shortage of vehicles'
Reuters -Army faces armoured vehicles shortage - watchdog
Sky News -UK Forces' Vehicle Shortage 'Costs Millions'

Specialist Media:
Defence Viewpoints - NAO slams UK armoured vehicle procurement

Related Posts in this Blog:
Cormorant Communications System - Lame Duck in a War Zone
Lost Before It Started - A Defence of the Realm Series
Nimrod exposes contempt for Armed Forces