Written statement on Combat Air Strategy Update - Jul 22

On publication of the strategy, my right hon. Friend, the then Secretary of State for Defence, made a commitment to update the House annually on implementation of the strategy and the programmes it launched. Today I provide this update.

It is worth reflecting on the strategy and its key themes. First, it recognised the strength of our industry and its contribution to the well-being of our nation. This sector is economically, strategically important and is enables sovereign decision-making on where and how to deploy our military capability. Secondly, it makes clear that partnering with like-minded allies is the best means to deliver our collective objectives. The update will therefore cover both themes – domestic developments, as well as international.

Domestic Update

Alongside the launch of the strategy, the Department re-affirmed our commitment to the approximately £2 billion Future Combat Air System Technology Initiative (FCAS TI). This initiative will mature the technologies needed for our future combat air systems and crucially, develop key skills across both Government and industry. The central pillar of FCAS TI is ‘Team Tempest’, a co-funded partnership between Government and our industry partners. Over the last year this partnership has driven a step change in relationships and behaviours between Government and industry by aligning incentives, sharing costs and benefits and creating common interest in pace and agility. The team is on track to delivering 17 European-firsts and 7-world firsts. The first of these has already been achieved – the embedding of an electrical starter generator by Rolls-Royce within the main body of a powerful military aircraft engine. This increases the power density and reduces the complexity of future aircraft engines, resulting in more efficient engine designs and is fully exploitable to Rolls-Royce’s multi-billion pound civil business. This technology will continue to be matured in the coming years, leading to a fully integrated novel power and propulsion system.

This partnership, and the private and public funding underpinning it, already supports over 1,000 jobs, many of them in high-end design, across the breadth of the country, from BAE Systems in Lancashire, to Rolls-Royce in Bristol and to Leonardo in Edinburgh and Luton. This number is set to rise to 1,800 by the end of this year.

The strategy recognised that there is significant capability residing in UK companies of all sizes and therefore, we are engaging with companies beyond our ‘Team Tempest’ partners. My right hon. Friend, the Minister for Defence Procurement hosted an Industry Engagement Day on the 19 March at Farnborough where 180 companies representing a wide range of capabilities and sizes, received briefs on the technologies being matured by ‘Team Tempest’ and the opportunities that exist for further collaboration. I am pleased to announce that the ‘Team Tempest’ partners have subsequently engaged an additional 500 companies and so far, have let over 120 sub-contracts in support of Team Tempest activities.

The Combat Air Sector is likely to be a key driver in new technologies and skills in areas such as automation, machine learning, advanced manufacturing and big data which will have broader benefit to the economy. Crucial to the long-term sustainability of this sector is ensuring that the skills needed in the future are identified, the workforce trained and that ultimately these skills are transferred to the next generation. Team Tempest has therefore established a dedicated STEM engagement team to inspire young people to be involved in this sector. This approach, along with the assurance provided by the strategy has resulted in record numbers of young people joining the workforce. This year, Leonardo MW will recruit 104 graduates and 62 apprentices, with the majority planned to be involved in Team Tempest activities. Similarly, BAE Systems is planning to recruit approximately 700 apprentices and 300 graduates to grow the percentage (currently 10%) of their Team Tempest workforce that are graduates and apprentices.

Working closely with officials from the Department for Business Energy and Industrial Strategy (BEIS), the Department has launched a skills index to monitor the health of industrial and government skills critical to the delivery of our national objectives. Industry have provided their inputs and we are analysing the results and intend to present our findings in September. The skills index will be used to inform and measure the success of interventions such as FCAS TI, to ensure the health of the sector.

International Update

On F-35, in February, the avionic and aircraft component repair hub in North Wales was awarded a second major assignment of work worth some £500 million by the US Government. This will create hundreds of additional jobs in the UK and was the result of working closely with industry to deliver a national campaign approach.

On Typhoon, the strategy confirmed our commitment to continue to invest in this remarkable platform. In June, NETMA, on behalf of the UK and the other European Partner Nations, awarded a €54 million contract for the Typhoon Long Term Evolution study to industry which will explore how to maximise Typhoon’s capability for this decade and beyond.

The FCAS TI programme is maturing technologies for national usage, as well with our international partners. We are contracting our industry to work with their French counterparts on technologies that would maximise interoperability of our current and future platforms, recognising that, as currently envisioned, the Franco-German Système de Combat Aérien Futur (SCAF) acquisition programme does not meet the objectives laid out in our strategy. We are also investing in the development of the next generation Lift Fan for the F-35B, to reduce weight and improve the overall effectiveness of this world beating platform.

Our next generation acquisition programme will define and deliver the capabilities required when the backbone of the RAF, the Typhoon, leaves service. The team delivering this is working at pace, having within a few months of forming, delivered the Strategic Outline (Business) Case, which confirmed acquisition options to deliver our future combat air capability, which are now being explored and tested with potential international partners.

Despite challenging international dynamics, the Department has made great strides in our discussions with potential partners. With the support of wider Government (most notably officials from the FCO and DIT) and our industry, we have launched feasibility studies with potential partners.

We have discovered that there is a great appetite to collaborate with us. We offer a unique partnering approach, recognising the need to deliver ours and our partners’ benefits together, learning from our rich history of collaboration. This approach provides the firm leadership needed and appears to be an attractive alternative to the traditional, dominant-junior partner relationships.

Last week I signed a Memorandum of Understanding with my Swedish counterpart on this topic. This marks a significant step in aligning our nations, recognising both nations have highly capable Combat Air sectors. We will work together to mutually develop our understanding of the systems required to deliver our future requirements and how best to develop, deliver and ultimately support them. Beyond Sweden, we are furthering our engagement with other potential partners and I aim to sign similar arrangements over the next year.

From progress to date, we believe that Europe can afford two separate Combat Air programmes. We are investing in technologies, such as open systems architectures and advanced design and manufacturing techniques which offer significant reductions to the time and cost of design, manufacture, in-service upgrades and modifications. We are also ensuring that collaboration will be with partners whose strategic objectives align with our own, including the determination to reduce costs. We recognise that in an effective and efficient collaboration, there will be an optimum number of partners, which may include those outside of Europe.

The strategy’s next major steps are to continue the Concept Phase until December 2020, gathering evidence on the acquisition options presented and then submit the Outline Business Case. This will select the preferred acquisition route and concept to be taken forward into the assessment phase.