Policy Hub
According to a report by the Centre for Policy Studies (CPS) published on 1 February 2010, spending on defence over the last 12 years has not matched the demands made on the UK’s armed forces. It estimates that the equipment programme is underfunded by nearly £35 billion.
The report argues that besides the hard choices to be made in the next strategic defence review, the Ministry of Defence must show that it has learned the lessons of past failures in military procurement by getting better value from the equipment budget. In particular, the limits of European defence integration must be recognised, in the light of the fragmented nature of Europe's defence industry and the weak outlook for defence spending in many countries.
The report contends that the lessons of European collaborative projects, including the Eurofighter and Type 45 destroyer, must be learnt and more equipment must be bought on a military or commercial off the shelf basis to keep costs down, as happens in Australia.
It calls for the "conspiracy of optimism" to be tackled. The Ministry of Defence, the military and industry over-order and under-cost, in the knowledge that once in the equipment plan, cancellation of programmes is rare. Instead, the report recommends that the supply chain of major contractors is opened up to bring in more innovation. By learning the lessons of previous failures in defence procurement, it should be possible to deliver more for less.
More bang for the buck: how we can get better value from the defence budget (PDF)