ALEX CHALMERS
Defence procurement is back in the headlines as Secretary of State for Defence John Healey contemplates cancelling the £6 billion Ajax programme. Ajax is the UK’s single biggest order for an armoured vehicle in over 20 years and has been a disaster from start to finish. The programme is running eight years behind schedule, and trials in both 2020–2021 and this year have reportedly left soldiers with life-changing injuries.
Ajax is based on an existing European reconnaissance vehicle, but the Ministry of Defence (MOD) made 1,200 modifications to turn it into, in the words of the Army, the ‘most advanced, medium weight, armoured fighting vehicle in the world’. They did this by thickening the armour, adding a new 40mm cannon and installing advanced digital systems. A National Audit Office report concluded that the MOD ‘did not fully understand the scale or complexity of the programme’ or ‘some of the components’ specifications or how they would be integrated onto the Ajax vehicle’.
Similarly, the MOD’s Watchkeeper programme took a highly performant Israeli drone, made 2,000 modifications and created a vehicle that struggles to take off. They will be retired in 2027, 15 years ahead of schedule and having seen little use. In the meantime, RAF’s experimental drone squadron had no drones for four years.
Nobody set out to create a bad defence procurement system. But there are government reports stretching back as far as the Seventies pointing out the same set of mistakes: projects that take on unnecessary technology risk, undue optimism about timelines and poor cost control.
The actors involved are rationally following a set of perverse incentives.
At a time when programme budgets are being gutted, complex projects, which can be branded as flagship modernisation programmes, are more likely to survive the axe. A simple reconnaissance vehicle might be cut, but if its internal champions can rebrand it as a multi-use armoured vehicle with the latest digital systems, then its survival prospects are altogether better.
When the framework for business cases doesn’t factor in time to first use as a factor, then there is no penalty attached to scope creep or endless chopping and changing.
Meanwhile, the Senior Responsible Owners for projects are reshuffled every two to three years, so they are unlikely to see a procurement through from beginning to end. This incentivises them to do whatever creative accounting is required to get a project approved, knowing it will be someone else’s job to find the money.
As I argue in a new report, there are important changes that the Government can make to this system. These include mandates to buy off-the-shelf equipment where possible, empowering the new National Armaments Director to curb inter-service rivalry and an overhaul of the business case process. If implemented, these would put an end to vanity projects we can’t afford, prioritise workable kit that reaches the frontline over bespoke capabilities that never do and make it harder for MOD to continue robbing Peter to pay Paul.
Procurement reform, while necessary, is not sufficient. There remains a significant gap between the UK’s strategic ambitions and the resources it has to meet them. The UK’s military is declining in size. At the last count, our defence equipment plan contained a £16.9bn black hole. A defence investment plan promised for this autumn may be delayed into 2026, while the service chiefs are allegedly in open revolt about their budget.
Despite this, the UK remains committed to: reinforcing homeland security; the AUKUS partnership with the US and Australia; maintaining a presence in the Gulf, the Indo-Pacific and the Middle East; maintaining a nuclear deterrent; and supporting Ukraine up to the point of Ukrainian victory.
These are all admirable goals, but embracing them all risks the UK being present everywhere at the expense of being resourced anywhere. Given the Government failed to successfully means test winter fuel payments, it’s hard to believe that they’re about to push through unpopular tax rises to pay for significant increases in defence spending.
As well as reforming procurement, we need to systematically think through the real circumstances in which our military is likely to be deployed and alongside whom.
Does the UK really need to be buying the Challenger 3 tank, given that its predecessor struggled on the battlefield and when, in any confrontation with Russia, we would fight alongside allies with significantly larger tank fleets? Is the Ajax programme worth rescuing? Must we preserve the fanciful notion that the UK is going to send a carrier strike group to the South China Sea?
Such a reevaluation could free up resources to improve pay and conditions, as well as ending the scandal of crumbling military bases and houses. We could launch one of the world’s most ambitious drone-buying programmes. And we could replenish our dangerously low ammunition and missile stocks.
Until we have this conversation, any defence procurement system is likely to be as incoherent as the strategic goals it is meant to serve.
Read the report ‘Fixing Defence Procurement’ here.
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This article (Britain can’t afford its defence fantasies) was created and published by CapX and is republished here under “Fair Use” with attribution to the author Alex Chalmers
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