National Audit Office report on Defence capabilities - delivering what was promised

Wednesday, 18 March 2020 00:01

The Ministry of Defence (MoD) is struggling to deliver key parts of the UK’s planned defence capabilities programme, according to a National Audit Office (NAO) report published today. New military capabilities – the combination of equipment, trained personnel, infrastructure and information needed to meet a specific requirement of the Armed Forces – are pivotal to delivering the UK’s defence policy.1 These capabilities cover major projects such as...Request free trial

The Ministry of Defence (MoD) is struggling to deliver key parts of the UK’s planned defence capabilities programme, according to a National Audit Office (NAO) report published today.

New military capabilities – the combination of equipment, trained personnel, infrastructure and information needed to meet a specific requirement of the Armed Forces – are pivotal to delivering the UK’s defence policy.1

These capabilities cover major projects such as offshore patrol vessels, fighter aircraft, drones and battlefield communication systems. The estimated total procurement cost of the 32 most significant defence projects and programmes is £196.2 billion. To deliver such capabilities, the MoD employs around 20,000 staff.

The NAO finds that projects are not being consistently delivered to the expected standard or on time. At a time of fast-paced technological developments and global change, it is essential that the MoD can make swift and full use of the capabilities it needs as planned. Failure to deliver them on time is likely to undermine the MoD’s ability to carry out its key tasks, and lead to overextended use of existing assets, and additional costs.

Ten of the MoD’s 32 most significant projects and programmes either require urgent action to get back on track, or already cannot be delivered on time. Whereas, five of the 32 are currently likely to be delivered on schedule. These projects and programmes are forecast to be on average more than two years late by the time they are declared as fully operational.

A persistent ongoing problem the MoD faces is equipment delivered either late or faulty by its suppliers. Nearly a third of the 32 most significant projects report serious issues with suppliers. In some cases, poor performance has persisted over a number of years.

MoD project and delivery teams are under-resourced and lack essential skills, contributing to delays in delivery. Six of the 32 projects face shortfalls of more than 20% in their programme teams. The report also highlights shortages of key staff and how some teams are reliant on consultancy support. The MoD also does not have the information it needs to hold teams to account and make strategic decisions.

The NAO has also identified examples where poorly defined delivery ‘milestones’ have meant the MoD has been unclear what has actually been achieved. Projects can be declared ‘fully operational’ even if they are not or if testing is incomplete.2 In some cases, this has affected MoD’s ability to use equipment in the way intended.

In response to these challenges, the MoD is introducing a new approach to procurement, designed to speed up delivery, and allow it to flexibly upgrade equipment in response to technological change. For this to successfully tackle the issues highlighted in the report, the NAO emphasises that key decision makers must have an accurate and current understanding of the level of capability that has been delivered.

Gareth Davies, head of the NAO, said:

“It is essential that the MoD improves the way it introduces important new defence capabilities into service. This includes ensuring that pressure to be seen to deliver quickly does not lead to it accepting incomplete projects, and making decisions on the basis of incomplete reporting."

Key facts

£196.2bn
the estimated total procurement cost of the 32 most significant defence capabilities that the Ministry of Defence (the Department) is bringing into service

number of the Department’s 32 most significant defence capabilities that require ‘urgent action’ to deliver in full, or are already ‘undeliverable’ to the current timetable

5
number of the Department's 32 most significant defence capabilities where delivery is ‘probable’ or ‘highly likely’ to be in line with schedule

12 months	average forecast delay to the delivery of an initial operating capability for the Department’s most significant defence capabilities
26 months	average forecast delay to the delivery of a full operating capability for the Department’s most significant capabilities
10	number of the Department's 32 most significant defence capabilities which face serious issues with supplier engagement and/or performance
9	number of the Department's 32 most significant defence capabilities which have significant skills shortages that are impacting on deliverability
12	number of additional Senior Responsible Owners that the Department calculated in 2018 it would need if each of the most significant defence programmes was to have its own

Notes for Editors

In this context, a military capability is a combination of equipment and trained personnel that is needed to carry out tasks in support of the Government’s defence policy objectives.
The MoD declares key project milestones as achieved without the intended capability always being delivered at that point. Departmental guidance permits the declaration of a milestone even if performance does not meet acceptance criteria, or if testing to confirm criteria have been met is incomplete. The MoD allows 'exceptions' for a variety of reasons, but milestones are frequently declared as achieved on the basis that progress is 'good enough', despite criteria not being met fully.