Let’s Get A Tighter Grip On Defence Spending

Britain’s performance on defence procurement is poor – it’s time to make those responsible face the consequences.














Equipped to do the job: British armoured forces in action in Afghanistan.

The history of defence procurement is not a happy one. Ensuring that our Armed Forces get the best possible equipment they need, when they need it, is easier said than done. Today, Labour will publish the findings of a comprehensive 10-month study into defence acquisition policy that will inform a wholesale review of party policy launched by Ed Miliband last year. There are few benefits of being in opposition, but being able to take a step back and reflect is one.

Labour can be proud of the fact that we increased the defence budget by 10 per cent in real terms during our years in power. Defence procurement was reformed and equipment, from drones to personal kit, was transformed – so much so that, by 2009, the last chief of the defence staff, Air Chief Marshal Sir Jock Stirrup, remarked that our troops had never been so well equipped. The welfare of our forces, and crucially that of their families, was also improved.

But defence procurement is a complex and challenging activity. The lead times are enormous and technology changes So what is to be done? It is often said that there is a “conspiracy of optimism” in defence procurement. At best, there is a tendency to muddle through in the hope that both the customer and supplier “get there in the end”. At worst, defence procurement has been based on unrealistic assumptions and over-ambitious plans that balloon beyond all recognition, along with the costs. This conspiracy of optimism has to be replaced by a culture of consequences.

This must apply to the defence industry. In the past, the taxpayer has been left carrying the can for some of its lamentable failings, with some suppliers seeing the UK government as little more than a cash cow. Too many times, once a company or consortia has been awarded a contract, the price begins to ramp up.

First, we need firmer and fairer contracts that incentivise good performance, with industry asked to provide higher warranties for performance. There should be far greater penalties for those that fail to deliver on time and on cost, and the MoD should not be afraid of taking companies back to the initial approval stage, or indeed calling time on contracts that are simply not working. Experience should triumph over hope.

Second, in the case of de facto and actual monopoly suppliers to the MoD, there should be what is known as “open book” contracting once a contract is let. This means far greater transparency of costs and profits in a long-term partnering approach. Within such an approach, there should be not just an agreed price but an agreed target level of profit, too. If the MoD’s requirements change due to operational imperatives – where, say, our Armed Forces need something extra on top of the original specifications – industry must not be allowed to cash in and make super-normal profits on the change in price.

And third, we need shorter, less complex projects with streamlined processes and decision-making. In defence procurement, time is money.

But we also need that same culture of consequences inside the MoD. In the commercial world, promotion and bonuses are based on performance. But in the MoD, there is little sense that poorer performing individuals in very senior roles are ever held accountable. The people leading Integrated Project Teams (IPTs), who manage major procurement programmes, should have the authority, accountability and responsibility for project execution. Currently, they are given as little as four or five days’ training and tend to come from either the Civil Service or from the military – this does not always make them best able to manage hugely challenging commercial contracts.

These problems are compounded by the frequent changes in project managers. The norm in the MoD is to move jobs every two years. This leads to constant changes of strategy and emphasis, which are not helpful and avoid the need for managers to live with the consequences of their actions.

This autumn, the Government will publish its White Paper on the defence industry, but all the signs are that it will have little to say except – as is the case with the Bombardier contract for new trains – that we should give up at home and simply “buy off the shelf” from abroad. Today, Labour will present a host of ideas to reform defence procurement. But in beginning to shape policy for the future, all parties need to be honest about the past and learn from their mistakes.

Michael Dugher MP is shadow minister for defence equipment rapidly, as do our requirements, with the enemy having a say in all of this. And despite all the investment and improvements, we made mistakes. The problems of defence procurement have plagued all governments, but the huge delays and massive cost overruns continued on our watch.

That is why Labour in government commissioned the Gray Report in 2009 to identify the serious failures in acquisition. The current Government liked the report so much that it hired the author, Bernard Gray, to head up defence equipment and support at the Ministry of Defence.

The fact is Britain’s record is poor. Over the period for which there is consistent data (2003-2010), major projects costing the taxpayer in excess of £200 million, and those that were planned to take four to five years between “Main Gate” decision and entry into service, exceeded their most likely out-turn estimate of costs by more than 10 per cent on average – with extremes of up to 40 per cent. These programmes also slipped by 40-50 per cent – some by as much as 250 per cent – from their expected schedule.

So what is to be done? It is often said that there is a “conspiracy of optimism” in defence procurement. At best, there is a tendency to muddle through in the hope that both the customer and supplier “get there in the end”. At worst, defence procurement has been based on unrealistic assumptions and over-ambitious plans that balloon beyond all recognition, along with the costs. This conspiracy of optimism has to be replaced by a culture of consequences.

This must apply to the defence industry. In the past, the taxpayer has been left carrying the can for some of its lamentable failings, with some suppliers seeing the UK government as little more than a cash cow. Too many times, once a company or consortia has been awarded a contract, the price begins to ramp up.

First, we need firmer and fairer contracts that incentivise good performance, with industry asked to provide higher warranties for performance. There should be far greater penalties for those that fail to deliver on time and on cost, and the MoD should not be afraid of taking companies back to the initial approval stage, or indeed calling time on contracts that are simply not working. Experience should triumph over hope.

Second, in the case of de facto and actual monopoly suppliers to the MoD, there should be what is known as “open book” contracting once a contract is let. This means far greater transparency of costs and profits in a long-term partnering approach. Within such an approach, there should be not just an agreed price but an agreed target level of profit, too. If the MoD’s requirements change due to operational imperatives – where, say, our Armed Forces need something extra on top of the original specifications – industry must not be allowed to cash in and make super-normal profits on the change in price.

And third, we need shorter, less complex projects with streamlined processes and decision-making. In defence procurement, time is money.

But we also need that same culture of consequences inside the MoD. In the commercial world, promotion and bonuses are based on performance. But in the MoD, there is little sense that poorer performing individuals in very senior roles are ever held accountable. The people leading Integrated Project Teams (IPTs), who manage major procurement programmes, should have the authority, accountability and responsibility for project execution. Currently, they are given as little as four or five days’ training and tend to come from either the Civil Service or from the military – this does not always make them best able to manage hugely challenging commercial contracts.

These problems are compounded by the frequent changes in project managers. The norm in the MoD is to move jobs every two years. This leads to constant changes of strategy and emphasis, which are not helpful and avoid the need for managers to live with the consequences of their actions.

This autumn, the Government will publish its White Paper on the defence industry, but all the signs are that it will have little to say except – as is the case with the Bombardier contract for new trains – that we should give up at home and simply “buy off the shelf” from abroad. Today, Labour will present a host of ideas to reform defence procurement. But in beginning to shape policy for the future, all parties need to be honest about the past and learn from their mistakes.

Michael Dugher MP is shadow minister for defence equipment.

Could This Be The End Of The RAF? Military Chief Refuses To Rule Out Merger With Navy As Cuts Loom

The future of the RAF and Royal Navy were thrown into doubt last night after the head of the Armed Forces said their merger should be 'debated'.


















Cash-strapped: Air Chief Marshal Sir Jock Stirrup has not ruled out an amalgamation of the RAF and the Navy.

Sir Jock Stirrup caused consternation when he failed to rule out the amalgamation of two of the three cash-strapped military services.

The Chief of the Defence Staff said it was only 'plausible' that they would all exist separately in ten years' time.

The drastic cuts needed and the growing cooperation between forces in Afghanistan raised the controversial possibility that the air and sea service could unite.

Sir Jock made his comments at the unveiling of the Government's Green Paper on military reform, which lays the groundwork for a full-scale strategic defence review after the General Election.

The document, published by Defence Secretary-Bob Ainsworth, revealed no spending figures nor any indication of how the Armed Forces would look after the long-awaited shake-up. But it was revealed that:

* Defence chiefs will be forced to compromise on purchasing costly state-of-the-art equipment as ministers battle to reduce the nation's £178billion deficit;
* Britain can expect higher casualty rates as we are dragged into guerilla wars with increasingly sophisticated enemies;
* Despite the nation's battered finances, ministers will press ahead with the £20billion update of the Trident nuclear deterrent;
* The Armed Forces will have to work more closely with the French and other allies as spending cuts bite.

Mr Ainsworth also announced that the war in Afghanistan - which has claimed the lives of 253 UK service personnel - remained the top defence priority. Funding for troops and equipment will rise from £3.5billion to £5billion next year.






















And despite the urgent need for the MoD to cut costs in the face of a £ 36billion shortfall, he said that two new aircraft carriers costing £5billion each would 'most likely' go ahead.

The Green Paper warned: 'We cannot proceed with all the activities and programmes we currently aspire to, while simultaneously supporting our current operations and investing in the new capabilities that we need.'

The total number of British service personnel - 188,440 - is dwarfed by that of China and the U.S. and even trails that of France.

The Defence Secretary refused to say where cuts - expected to be significant - would be made in the defence budget.

But Sir Jock admitted that it was 'plausible' that one of the three services could be cut in future.














Top of the list: Afghanistan will remain the priority, with funding set to rise.

He warned against 'duplications, overlap and inefficiencies' in the Army, Royal Navy and RAF, while insisting the three could work seamlessly together. However, he said: 'There are interesting issues to be debated here.'

Experts suggested that the RAF - formed in 1918 - could be most vulnerable to the axe. Its fast jets, transport planes and helicopters could be split between the Army and Navy.


















Mr Ainsworth said he did not foresee 'major structural change' but warned: 'Not allowing single service interests to stand in the way of efficient delivery of security to the nation is something we have to look at.'

He added that the UK must prioritise its defence capabilities because it could not afford to 'insure against every risk'.

He made clear Labour would not scrap the Navy's new aircraft carriers despite criticism they were unaffordable and unsuited to modern conflict.

However, he refused to be drawn on the 140 Joint Strike Fighters intended to fly from the warship. The price of each jet has soared from £37million to more than £62million in four years.

He paved the way for greater military co-operation with France in a 21st century 'Entente Cordiale' while insisting the U.S. would remain Britain's most important ally.

'Our Armed Forces must be prepared if called upon to protect our interests, often in distant places, and most likely as part of a coalition of international forces,' he said.

Mr Ainsworth also promised legislation to force future governments to carry out a strategic defence review every four years. The last was in 1997 soon after Labour entered power.

Tory defence spokesman Liam Fox said: 'That our nation's security should be compromised by Labour's historic economic incompetence is truly a national tragedy.'

Baha Mousa Inquiry: MoD's Guilt For Death Of Army's Iraqi Prisoner

Nineteen soldiers could face criminal charges for their role in the death of an innocent Iraqi man after a public inquiry found he was the victim of “appalling and cowardly” violence while in British custody.












Baha Mousa with his son.

Military and civilian prosecuting authorities are examining the findings of a three-year inquiry into the death of Baha Mousa, a hotel receptionist who died after a 36-hour ordeal at the hands of British soldiers in Basra in September 2003. Nine other civilians were bound, hooded and subjected to “serious, gratuitous violence”.

The inquiry, chaired by Sir William Gage, a retired judge, found the Ministry of Defence guilty of a “corporate failure” to uphold basic standards by allowing rules to go “largely forgotten”. While clearing the soldiers’ unit, the 1st Bn Queen’s Lancashire Regiment, of having an “entrenched culture of violence”, he said it was clear the abuses were not a one-off.

Dr Liam Fox, the Defence Secretary, said the events described in the report were “deplorable, shocking and shameful” and instructed the head of the Army to take action against any serving personnel who were involved.

Three serving soldiers, including an officer, have already been suspended from duty as a result of the inquiry.

Dr Fox told the Commons: “Baha Mousa was not a casualty of war. His death occurred as a detainee in British custody – it was avoidable and preventable and there can be no excuses. There is no place in our Armed Forces for the mistreatment of detainees and there is no place for a perverted sense of loyalty that turns a blind eye to wrongdoing or erects a wall of silence to cover it up.”

The 1,400-page report details how the victims spent a day and a half with bags tied around their heads while being forced to stand in “stress positions” – practices banned under both domestic law and the Geneva Conventions.

Last night the Chief of the General Staff, Sir Peter Wall, said the incident “cast a dark shadow” over the reputation of the Army while David Cameron condemned the “truly shocking and appalling” abuse which he said should never be repeated.

The £13 million inquiry singled out 19 soldiers whom it concluded were directly involved in the abuse, including some who have already faced unsuccessful prosecution at court martial.

Lawyers for families of the victims said there was potentially the evidence to bring new prosecutions against all of them in the civilian courts. It emerged last night that three soldiers serving in the Army, including an officer, had been suspended from duties and MoD sources believed another 11 former servicemen could also face charges.

The suspended officer, Maj Mike Peebles of the Intelligence Corps, would face a second court martial if Army prosecutors believed there was sufficient new evidence. He was originally acquitted of negligently performing a duty during a court martial in 2007 when he was among six soldiers to walk free after the effective collapse of a £20 million case.

Only Cpl Donald Payne, named as committing some of the worst abuses, was convicted at the original court martial after pleading guilty to inhumane treatment. He was cleared of manslaughter but jailed for a year. Six others, including the regiment’s former commanding officer, Col Jorge Mendonça, were cleared of charges.

Yesterday both he and Maj Peebles were singled out as bearing “heavy responsibility” for what happened. Several soldiers who were not involved in the original court martial are among those who could now face prosecution.

This could include a large number of men who have left the Forces.

Dr Fox said efforts were already under way to determine whether “more can be done to bring those responsible to justice”. He told MPs that the MoD’s Iraq Historic Allegations Team had found evidence of “some concern” and cases would be passed to the Director of Service Prosecutions where there was “sufficient” evidence. Any eventual cases would be likely to be brought by the Crown Prosecution Service as most of the men were now civilians. Sapna Malik, a lawyer representing the Iraqi families, said they “expect” both military and civilian prosecuting authorities to act.

Despite the criticism, Dr Fox rejected a key recommendation in the report for a blanket ban on so-called “harsh” questioning methods, warning that lives could be put at risk unless the Forces could deploy all “necessary” techniques.

Army Suspends Baha Mousa Soldiers As More Prosecutions Are Considered

General Sir Peter Wall, the head of the army, says new evidence could mean further disciplinary action against soldiers.












General Sir Peter Wall says further prosecutions against soldiers are being considered after fresh evidence was unearthed.

The army has suspended a number of soldiers after the publication of a damning report into the "violent and cowardly abuse" by servicemen that led to the death of an Iraqi detainee in British military custody.

There have been widespread calls for further prosecutions and the defence secretary, Liam Fox, disclosed that Ministry of Defence inquiries "are revealing evidence of some concern" in other Iraqi abuse cases.

Fox acknowledged for the first time that there could be more prosecutions. "If any serviceman or woman, no matter the colour of uniform they wear, is found to have betrayed the values this country stands for and the standards we hold dear, they will be held to account," he said.

General Sir Peter Wall, head of the army, confirmed that the force's provost martial will investigate whether anyone else should be disciplined in the light of fresh evidence unearthed by Sir William Gage's inquiry into the final hours of Baha Mousa's life in Basra in 2003.

Wall said the inquiry had cast a "dark shadow" over the service's reputation.

The retired appeal court judge's report, which runs to three volumes, found that troops from 1st Battalion Queen's Lancashire Regiment inflicted "gratuitous" violence on a group of 10 Iraqi civilians, who were kicked and hit in turn, "causing them to emit groans and other noises and thereby playing them like musical instruments". This humiliating practice was nicknamed "the choir".

While focusing criticism on a few members of the regiment – particularly Corporal Donald Payne, Lieutenant Craig Rodgers and Lieutenant Colonel Jorge Mendonca – the report also passes scathing comment on the role of the unit's regimental medical officer, Dr Derek Keilloh, and its padre, Father Peter Madden.

Both Keilloh and Madden face further hearings: the doctor will be examined by a General Medical Council disciplinary tribunal over his role in Iraq and the priest is to be interviewed by the archbishop of Birmingham, Bernard Longley.

The report will be passed to prosecutors to assess whether fresh charges should be brought against any soldiers. So far only Payne has been convicted of inhumanely treating civilians; he served one year in prison.

Fox said: "There is no place in our armed forces for the mistreatment of detainees and there is no place for a perverted sense of loyalty that turns a blind eye to wrongdoing or erects a wall of silence to cover it up."

Referring to methods of "conditioning" suspects in Northern Ireland that were banned in 1972, Fox admitted that "there was a 'systemic failure' that allowed knowledge of the prohibition on abusive techniques made by the Heath government to be lost over the years".

Military prosecutors from the Service Prosecuting Authority (SPA) will be responsible for examining any cases brought against those still in uniform. Despite suggestions that the Crown Prosecution Service will be asked to examine the fresh evidence in relation to those who have already left the army, a CPS spokeswoman said: "We are not aware of anything being referred to us."

Dan Leader, a solicitor with Leigh Day and Co, which represented some of the detainees, said: "The claimants are very clear they want accountability. We are talking about torture and murder. All that has happened is that someone has spent one year in prison. The claimants are concerned about criminal justice and feel let down so far."

In terms of immediate disciplinary action, Wall told the Guardian that "some soldiers have been suspended from operational duty and military service". More suspensions may follow. Only 14 of those referred to in the Gage report are still in the army.

So far £2.8m has been paid out by the Ministry of Defence in compensation to Mousa's relatives and the nine other Iraqi detainees held in Basra between 14 and 16 September 2003.

The solicitor Phil Shiner, of Public Interest Lawyers, renewed his call for a wider inquiry into allegations about how British troops treated detainees in southern Iraq between 2003 and 2009.

"There is a case called Ali Zaki Mousa," Shiner said, "currently before the court of appeal that will determine whether the UK should fulfil its legal obligations by holding an extended inquiry into 150 additional complaints by Iraqi civilians."

Mousa's father, Daoud Mousa, was not in Britain for the report's publication but is due to deliver a lecture in memory of his son in London next week.

The MoD signalled that it would not accept one of Gage's recommendations, namely that "harshing" – shouting at detainees to intimidate them – should be abandoned. A test case about the technique, which the MoD defends, is due to come before the courts soon.

The General Medical Council declined to comment on the forthcoming hearing into Keilloh but Peter Jennings, press secretary for the archdiocese of Birmingham, said of the criticism of Madden: "The Catholic church takes this matter extremely seriously.

"The archbishop, the Most Rev Bernard Longley, and the vicar-general of the archdiocese will be meeting with Fr Madden when he has had the opportunity to study carefully the full report and the criticisms of himself in the context of the report."

Amnesty International called for soldiers to be charged.

"Those responsible must be held accountable for their actions and brought swiftly to justice, including in criminal proceedings," said Nicola Duckworth, the organisation's Europe and central Asia director.

Priorities Questioned Over Defence Cuts

Nearly 2,000 armed services personnel are learning that their jobs are to disappear today.

At least half of the 920 Army jobs and 930 RAF roles are expected to face compulsory redundancies in the first round of defence cuts.












RAF pilots prepare for a mission over Libya.

The Gurkhas face the heaviest cuts, with 140 soldiers facing redundancy. No service personnel currently receiving the operational allowance will be forced to leave, however.

"Just as many RAF personnel will be thinking about returning home having performed heroics in Libya, ministers are drawing up their P45s," shadow defence secretary Jim Murphy said.

"People will be shocked and will wonder whether the government have got their priorities straight."

The defence cuts follow an eight per cent overall reduction in the MoD's budget in the comprehensive spending review.

Broader financial problems have forced defence secretary Liam Fox to seek a more fundamental rationalising of his department, leading to plans for over 22,000 jobs to go in total by 2015.

"The tough measures will bring the budget largely into balance for the first time in a generation," Mr Fox said.

"Extra money allocated for the equipment budget from 2015 will allow capability to grow in the second half of the decade."

The slow-burning nature of the cuts makes them politically sensitive, however. Around 1,600 redundancies in the Royal Navy are expected to be announced next month.

"This underlines the scale of the government's cuts in manpower. The frontline cannot be protected from cuts this deep," Mr Murphy added.

"Savings must be made, but in a world of uncertainty to many this will seem a worrying loss of important capability."