The Defence Industries Council has published its view on the process of the SDSR.
The Defence Industries Council welcomes the Government’s decision to conduct a Strategic Defence and Security Review. This has long been needed given the UK’s involvement in significant military operations since 2001, and the threats to national security, which have been clear since the beginning of the last decade. We welcome the opportunity to contribute to the Review
The new Government has made a clear statement of its intent in its document ‘The Coalition: our programme for Government’. In the foreword, the Prime Minister and Deputy Prime Minister said, “We are agreed that the first duty of government is to safeguard our national security and support our troops in Afghanistan and elsewhere – and we will fulfil that duty.”
Maintaining Britain’s defences will be crucial to fulfilling this pledge, and recent history clearly highlights the need to sustain a credible, thriving defence industry to deliver the military capability that underpins it.
The industry has done a great deal to help support our troops in theatre and through the rapid provision of Urgent Operational Requirements. It has shown it can be agile in delivering equipment and services to meet new requirements at short notice. That does not happen by accident and the SDSR must develop a strategy to sustain our military and industrial effectiveness at these levels while tackling immediate challenges to improve efficiency and reduce cost.
Industry wants to do all it can to help the Government achieve these goals.
The programme for Government also makes it clear that deficit reduction is the overriding priority. It also makes clear the intention to reduce MOD running costs by 25%. Industry understands this and is entirely familiar with the need to deliver better for less. We believe that, collectively, we can achieve this, as long as the Government gives us the opportunity to be innovative and that it is open to new ways of doing business.
The Coalition document makes clear too the need for a more balanced economy. We agree and we believe that the defence industry has a key role to play in helping the Government deliver on its objective. It is a high value added manufacturing sector; it invests heavily in research and technology; it creates highly skilled jobs in many of the most economically disadvantaged regions of the UK; and it is strong in creating apprenticeships and other forms of workforce training. This capability cannot be switched on and off. It cannot be reconstituted, or adapted from capabilities in other industries – and certainly not without prohibitive cost. It requires a clear strategy for the industry which ensures that a critical mass of core skills is maintained.
Finally, the Coalition document makes clear that responsible defence exports will be supported, and that the Government will be considering how to ensure that the UK is Europe’s leading high-tech exporter. The defence sector, along with the pharmaceutical industry, is a real success story in delivering export revenue for the UK. We are pleased that the Government has given a commitment to us that it will work to ensure that we maintain this position.
What is required, from the perspective of the defence industry, to give life to these Government commitments, within the context of a Strategic Defence and Security Review?
First, a refreshed Defence Industrial Strategy, which sets out clearly how the Government will ensure that the industry in the UK will be able to deliver world class capability to the armed forces, and help deliver the economic growth that the nation needs. That requires a clear statement of the industrial capability which the Government wishes to keep on-shore. It needs a clear definition of what is required to deliver “operational sovereignty”, which assures military commanders they will have the ability to adapt capabilities urgently to meet changing operational situations; that the UK is able freely to adapt and upgrade capabilities in the systems it acquires; and that the UK can get the optimum approach to safety and the mitigation of obsolescence. In circumstances where capabilities are acquired from overseas, it needs to consider, and explain as transparently as possible, how these key objectives can be achieved.
Second, a renewed focus on research and technology within the defence programme, which can ensure that long term requirements are understood, and that the solutions to them can be developed in the UK environment, with UK technology.
Third, that the industry is enabled to develop different ways of doing business which can deliver better military capability for less and can help the Government address the need to control public expenditure. Examples of innovation through partnering provide clear examples of how different commercial models can transform the delivery of military capability. The boundary between MOD and industry needs constantly to be reviewed too. Outsourcing of functions currently carried out in the Department, and in the Government more generally, clearly offer real opportunities to save money. We need a mechanism to enable industry the opportunity to propose different ways of doing business, which do not currently exist
Fourth, we need total Government focus on, and commitment to the pursuit of responsible defence exports. That means real political leadership from the top down to help drive export campaigns. It means MOD assistance in the provision of support and training solutions to customers overseas who crave the involvement of the UK’s armed forces in the development of their own capabilities. It means an export credit organisation that is prepared to help and to put UK industry on a level playing field with its competitors in terms of the commercial offerings it can offer customers. And it means a defence export promotion organisation that can help co-ordinate all of this activity, with the express support of MOD, FCO and BIS.
Finally, we need a Government which makes absolutely clear its support for the defence industry in this country, and is prepared to celebrate it and recognise the contribution that it makes to the economic well-being of this country
The DIC urges the Government to grasp the opportunity which the SDSR provides in contributing to the aims of the programme for Government. The industry is an integral part of the UK’s national defence capability, as well as a motor for future economic growth. We stand ready to discuss how we can sustain that position in the long term through action in the five areas we have outlined.
To download the document as a PDF click here.