Philip Dunne is the MP for Ludlow and Minister for Defence Equipment, Support and Technology.
Lord Levene confirmed last month in his third annual review that this Government’s transformation of Defence is working and that ‘Leopards Can Change Their Spots’.
Since 2010 we have made huge progress in ensuring that our Armed Forces have the equipment and support they need to keep Britain safe. That is the role of Ministers and we have dealt with the ‘hospital pass’ that too often characterised defence procurement.
The Equipment Plan published today sets out our plans for spending around £163bn on new equipment and equipment support over the next decade. Investments that will make a major difference to our Armed Forces.
How far we’ve come
The Plan is a concrete demonstration of how far we have come since 2010. We have delivered a realistic and affordable plan, with substantial headroom and flexibility built in.
Thanks to a radical transformation programme and the hard work of everyone within the MOD and our Armed Forces, we have turned our back on the past.
We’ve filled Labour’s legacy £38bn black hole in the defence budget, got a firm handle on our big-ticket procurement projects and overhauled the way we undertake defence procurement and acquisition.
In the process we’ve transformed MOD into a leaner and more efficient machine that equips our Armed Forces with the kit they need in a world of burgeoning threats at greater value for money for taxpayers.
A plan that is already delivering
And over the past year we have been able to make a steady stream of investments in new capability.
On land, this included the biggest Armoured Fighting Vehicle order for the British Army in a generation – a £3.5bn contract for 589 highly advanced Scout specialist vehicles.
At sea, we saw the floating up of the Royal Navy’s flagship Queen Elizabeth Carrier, followed by news that it will be joined in service by our second operational aircraft carrier. We also contracted to build three new offshore patrol vessels for the Royal Navy.
Beneath the oceans, we launched HMS Artful, the third of seven Astute-class submarines.
The Royal Air Force received the first A400M Atlas transport aircraft which will become the backbone of one of the most modern Air Mobility military fleets in the world.
All three services received additions to their helicopter fleets.
Finally – as an illustration of just how much we have achieved – the Prime Minister announced last July an extra £800 million of investment inintelligence and surveillance assets – so vital in a world of ever more sophisticated global threats.
I’ve only touched on what is a long list, but also a powerful statement of where we have got to in transforming the defence capabilities available to our Armed Forces.
A plan that has independent endorsement from the NAO
Significantly, the National Audit Office in its report released today also recognises how far we’ve come.
This year, for the first time, the NAO’s findings on the Equipment Plan have been merged with it’s assessment of the MOD’s Major Projects Report (MPR).
There’s much good news. Of the 11 projects of 17 that have passed the main investment decision point, the forecast cost has reduced by £397 million. Only two of the in-service dates have been increased, by a matter of months rather than years.
This is the MOD’s best cost performance since 2005 and the best time performance since 2001.
More work to be done
But there is always more to be done.
The NAO has highlighted areas where we must continue to improve.
Whether honing our forecasting accuracy or sharpening our focus on delivering equipment support more efficiently.
That work is already underway.
The NAO also questioned whether the £4bn of efficiency savings we have earmarked in the Equipment Support Plan are achievable, going on to suggest our procurement and support cost forecasts are over-optimistic with not enough contingency in the pot to absorb cost growth.
Firmly on the right track
Whilst noting their concerns, I do not share them.
We are already making good progress on savings, including identifying nearly £3bn of potential savings in the support budget over the next ten years,and securing some £300m savings from renegotiating PFI contracts let by Labour.
When it comes to managing cost growth, I take some reassurance from the fact that our £4.6bn central contingency provision exists over and above routine risk provisions within individual project budgets.
What is more, we will also have around £8bn of extra headroom for future equipment capability requirements.
Together, these provide flexibility to address any cost growth within the core equipment plan and will allow us to fund extra programmes that are a high priority for Defence.
Competence not chaos
The contrast with Labour’s legacy couldn’t be starker: where there was a £38bn budget black hole, now there is a balanced budget; where there was chaos, now there is competence; where there were cost-overruns, now there are cost savings; where equipment deliveries were years late, now they are either on time or a few months behind.
That said, I am far from complacent and I remain committed to working with the NAO to increase the confidence that Parliament, the taxpayer and industry can have in the Equipment Plan’s deliverability.
But, most importantly, I am confident that through this plan, brought in by Conservatives in Defence over the past five years, we will achieve the vision set out in the Strategic Defence and Security Review – a vision of versatile, agile and battle-winning armed forces equipped with the kit they need, when they need it.
They deserve nothing less.