I spent my entire Royal Navy career wishing Britain would just buy American

Last week the UK Chancellor of the Exchequer acknowledged that Britain needs to spend more on defence. If this seems an odd thing to say just a few weeks after a Budget that barely mentioned defence, it does at least make clear where the blockage is.

The obviousness of the requirement is, slowly, finally, making Defence a votable issue. It shouldn’t take a terrible threat to force more money out of the Treasury but that is the reality. However, spending must be immediately followed by an acknowledgement that money alone is not the only solution. Money must also be spent better. There is a risk that the Ministry of Defence becomes a bottomless pit – the NHS with guns.

So it was with interest that I recently attended a session hosted by Civitas and led by MPs Mark Francois and John Spellar entitled “Fixing Britain’s Broken Defence Procurement System”. Here they ran through the findings of the Parliamentary Defence Committee’s report of last July entitled “It is broke – and it’s time to fix it: The UK’s defence procurement system”, a 60-page exposé of the horror show that is British defence procurement.

There were some fascinating insights. Here are a few of them.

This is the 15th such review since 1990, all of which have said versions of the same thing. The Infrastructure and Projects Authority’s “annual report on major projects 2022-23” states that of the 52 major defence projects then underway, just three were colour-coded green, i.e. likely to finish on time and to budget. The military – as ever – is accused of meddling with the requirements post contract award, contributing to cost and time overruns.

To give an idea of the longevity of this issue, and reveal its actual nature, we should listen to the words of Admiral Sir Raymond Lygo, who was chief executive of the defence contractor then known as British Aerospace in the 1980s. He later told the BBC:

“It’s a well-known fact, whether anybody admits it or not, [that] you’ll never get any programme through government if you ever revealed the real cost. Whatever you want to get through government, you have to first of all establish what is the Treasury likely to approve in terms of money? And then you think, what can you offer for these terms within the parameters that have been set?

“So you say, ‘Right, we can do this and we’ll do it for the price’ and then the programme goes ahead. But you know automatically that it’s going to cost more than that … and so after a year you say ‘I’m terribly sorry but the costs have now risen for this reason and the other reason’.

“There are always a thousand reasons because [the MoD] will never stop mucking about with the contract so you’ve always the comeback of saying, ‘that is not the contract we agreed.’

“And so then the price goes up … That’s life in Whitehall, I’m afraid.”

In France, mucking about with the contract is not allowed without the Secretary of State’s sign-off. Israel’s equivalent of our Defence Equipment and Support (DE&S) department has 300 people in it, ours has 12,500.

The report picks out three examples of poor practice from across UK defence: the Type 26 Frigate, the RAF’s E-7 Wedgetail airborne early warning aircraft and the British Army’s Ajax armoured fighting vehicle. By far the worst of these is Ajax. The problems with Wedgetail stem pretty much entirely from within the Ministry of Defence – particularly including a boneheaded ministerial decision in 2021 to cut the planned fleet from five to three to make a very small saving. I will concentrate on the frigate because I’m a warship man.

The Type 26 programme was actually conceived as far back as 1994 but a contract wasn’t awarded to BAE Systems until 2010. First steel was cut in 2017 and Initial Operating Capability (IOC, working to some degree but not yet as advertised) of HMS Glasgow the first of class is expected in October 2028, 11 years after first steel and 18 years from contract. Japan builds equally complex ships in four years. Items such as the gearbox arriving late and the ship needing to be cut open to fit it have caused delays costing £233 million and the Type 23 ships the Type 26s are set to replace will be over 40 years old when it eventually happens – double their designed life. It is costing fortunes to keep these old ships in service, though there have been positive impacts: late in life, they are finally being equipped with anti-aircraft defences which actually work and one of them now has land-attack missiles for the first time ever.

Everyone who was interviewed in the compiling of this report said the same thing when asked what they would change if they were King for a day – ‘speed it up’. Consensus at least, but to me that’s so obvious I’m not sure it’s even an answer unless you address ‘how’. One reason that things take so long is the incentive to spread projects over more years so as to reduce the cost in any given year, so allowing more projects to be shoehorned into the plan. Sadly, this always makes a project cost more in the end, as well as delaying it. One particularly well documented example of this is the Royal Navy’s new aircraft carriers, whose construction was deliberately slowed down with the result that the cost of the ships climbed from £4.6bn to £6.2bn.

So defence today is a disaster area. It took just eleven weeks to get an airborne early warning helicopter assembled and working during the Falklands conflict. “Crowsnest”, its replacement, has been in train for over 20 years and might reach full operational capability in 2025, four years before being retired from service. Politics, contract pacing, lack of qualified people, contractor bad behaviour and good old-fashioned organisational laziness all play a part here and none will be addressed unless there is a wholesale change in culture across all departments and at all levels.

The Integrated Procurement Model published in February of this year is supposed to address much of this. But those who remember Smart Procurement, Smart Acquisition, the Defence Industrial Strategy, the Gray Report etc etc etc, will be pardoned for a certain scepticism about this. There is a danger that these measures manifest as yet another layer of process and bureaucracy, a rumbling that is already being heard from within.

The balance between what we build from scratch and what we buy off the shelf is forever up for discussion and is essentially a trade-off between capability and value for money versus job creation. Both of these are noble ambitions, but they are incompatible: and it’s worth noting that capital-intensive industries like defence are a very expensive way of creating jobs. It’s also an unfortunate fact that when we build from scratch so as to generate jobs in defence manufacturing, many of the jobs are not British.

Consider the four Tide class tankers that were built, effectively as an off-the-shelf buy from an up-and-running shipyard, in South Korea on budget and on time (barring a minor delay to the first of class). Now compare that with the Fleet Solid Support ships so important for our carrier strike operations. These latter will be built between Spain, Devon and Belfast (with the long-dead shipyard Harland and Wolff re-opened to carry out final assembly). With a following wind, the first will be launched in 2028. Hurrah for international collaboration and job creation, but boo to a six- to eight-year capability gap with the existing RFA Fort Victoria, the only remaining solid support ship in the fleet, being expensively extended in the meantime.

Most of our best equipment has come straight from the US: the Chinook, the C-17, the Hercules (now sadly gone) and the Tomahawk for example. Should we now spend a fortune (which we and our partners simply don’t have, just ask Professor Justin Bronk of RUSI) trying to learn how to build fighters more advanced than fourth generation, or just buy lots of F-35s?

I spent my whole naval career wishing we had made destroyer hulls here and then slotted in the unrivalled American Aegis command, sensor and weapons combination with Mk 41 vertical launch cells, as the Japanese and South Koreans did. Our Type 45 destroyers did finally achieve a decent level of capability but you only have to look at their horrific growing pains to see how we manage to waste both money and time. HMS Daring, the first of class, was on her third captain by the time her main armament was finally working. The T45s still don’t have any land attack or ballistic missile defence capability, and most of them still have not undergone the lengthy and expensive generator refit which turns out to be necessary to stop the ship occasionally losing all power for no good reason. These are major embarrassments.

To be sure the T45s meant jobs on Clydeside, but that would also have been true if we had got Aegis ships on the Japanese or South Korean model – and, based on those nations’ experience, we’d have paid around half the price for much better ships. There were a few British jobs in building the weapons for our destroyers from scratch, but also a lot of Italian and French ones. When HMS Diamond fires an Aster missile in the Red Sea, the MoD can call it a “Sea Viper” as much as it likes, but it will still be French workers who make the million-pound replacement missile, not Brits.

Often, people will suggest that it’s a good idea not to be dependent on America for tech support, parts, reloads etc. I can’t see why it’s better to be dependent on France and Italy: and in any case we are always dependent on America as well, because all advanced Western military equipment contains controlled US technology and is subject to Washington’s International Traffic in Arms Regulations (ITAR). To give just one minor example, our supposedly Franco-Italo-British Type 45 destroyers run on Windows software, and this is just one of the many American technologies they contain. An item of “ITAR free” defence equipment is about as easy to find as a unicorn.

Just buying American and only doing the parts we can actually do ourselves, rather than teaming up with the Europeans to reinvent US wheels at huge cost, would make a lot of sense. It wouldn’t mean nearly as much money for the company which today is known as BAE Systems, of course, but it’s hard to see why we should really care about a mostly foreign-based multinational: barely a third of BAE’s 100,000 employees are in Britain.

The Treasury also has a key role here with ‘Treasury brain’ leading to things like annual budgets that make longer-term planning much harder than they need to be. France’s system in this regard is often cited as the reason they generally get more bang for their defence buck. There is a lot of work going on into Treasury orthodoxy at the moment and the role it has in hindering projects across the country, not just in defence.

Other suggestions from people close to this include projects needing better risk provision and to be financially ring-fenced. Ministers need to stop jumping the gun on announcements before they are properly funded creating constraints that are then difficult to reverse. The financiers in the MoD need to pay closer attention and/or not ignore DE&S when the true cost of a project and associated risk provision is presented to them. And so on.

Mark Francois summed it up thus: “With Russian tank factories now working three shifts, if we are to deter war then we need to respond accordingly. That means rapidly accelerating how we procure kit for our own military – with far less bureaucracy and wokery and much greater emphasis on weaponry and speed of delivery instead.”

These are good words and the Defence Committee including Francois and John Spellar should be congratulated for their tireless attempts to investigate and expose this: but they stop short of saying that we can have job creation or proper Defence – but not both. Independence from American support is not on the table, but we can at least avoid being dependent on continental Europe at the same time.

In the meantime, wholesale cultural reform is required across all departments and at all levels, including supporting behaviours and incentives. The trouble is, I can’t remember the last time this happened across such a broad, diverse and yet entrenched industry.

Increasing global instability demands we spend more on Defence, spend it better and work to recruit and retain more people. Someone needs to persuade the Prime Minister of this and if his Chancellor can’t, then maybe we are the last hope.

Tom Sharpe was a Royal Navy officer for 27 years. He was a specialist anti-air warfare officer, which is why he especially wishes the RN had got Aegis warships