Speech delivered by Mr. Bernard Gray, Chief of Defence Materiel, at the Royal United Services Institute/Cranfield University Acquisition Reform Conference, at the Defence Academy, Shrivenham, on Tuesday 15 March 2011.
Minister for Defence Equipment, Support and Technology - Peter Luff MP also gave a speech at the same event.
I would like to add my own appreciation to that of others, and say that it is a great privilege and a pleasure to work with you on the vital task of acquisition reform.
You approach this difficult issue with insight, courtesy and determination: a great combination when change is needed. Your support for the MoD, for DE&S, for our industry, and in support of our exports has been remarked on by many, and is admired by all.
I last spoke at a Shrivenham acquisition conference almost two years ago, when my report had yet to be published. Then, I shared with the audience some of my key conclusions. I am sad to say that these conclusions were subsequently leaked to the media.
Of course, I was sad that the information itself was leaked, but mostly I was sad that the poor quality PowerPoint slides that someone had made to try to explain my conclusions to others were passed off to the BBC as being my work. I’d never be seen dead producing that kind of low quality graphics.
But whether in tawdry black and white or glorious Technicolour, the conclusions of that report are now, of course, a matter of record. In some senses, it is a matter of history.
That “bow wave” of impending costs that I demonstrated was about to descend on the MoD has now crashed down upon us. And it has done so at precisely at the worst possible time, when the government has to retrench more generally, when money is so tight.
Sadly, the impact of this perfect storm is all too clear. Key capabilities have had to be cut, important programmes cancelled. Many good and capable crown servants are in the process of being laid off. It is a grim picture for all of us who care about the robust health of the UK’s Armed Forces.
No part of this reduction is welcome, and indeed the Government has made clear its distaste of the action it has had to take to balance the budget. But the worst example of what has had to happen is in my mind the fate of the Nimrod MRA4 programme.
It is not because I have a particular view about the importance or otherwise of this capability, I leave that well-worn fight to others. It is because the MoD will have spent £4bn on this capability over the past 15 years and ended up with, nothing.
That is the worst indictment of the defence programme I can imagine. Just think of what capabilities we could have had for that money: imagine the number of aspects of defence that could have been improved. Or perhaps, don’t. To do so may be too disheartening.
That the programme had to be abandoned, I have no doubt. The MoD simply could not afford to carry on with that capability, alongside all of the other priorities in the defence budget, and with the limited cash available.
No, I am not cross because the programme was stopped. My ire is raised because the situation that gave rise to the expenditure of £4bn on a programme we could not afford was predictable. This disaster could have been avoided if action had been taken earlier.
It is the exemplar par excellence of what happens if the department lives beyond its means. Put simply, if you start more things than you can afford to finish, then sooner or later you are going to waste money by having to cancel some of those projects.
And what is worse, you will probably waste money on all of your projects along the way because you will slow everything down in a brave attempt to stave off the inevitable.
My report made a number of points, some say too many. The MoD helpfully, and accurately I think, boiled this down into two key principles.
First, the MoD must balance its budget over the short, and even more importantly, the long term. We are in a long-term business, and we must plan for the long term. We have to be realistic and clear-eyed about what our programme will cost, and we have to balance what we are planning to buy against the cash we are likely to have.
Second, we must make sure that DE&S is well set up to acquire and support the equipment within the plan. We have to be able to deliver.
These two tasks are, I believe, the principle focus that Min(DEST) and I will have in driving forward acquisition reform in the years ahead. (end of excerpt)
Click here to read the full text of Mr Gray's speech on the MoD website.