Philip Dunne is a former Defence Minister, and is MP for Ludlow.
This week I launched my report Growing the Contribution of Defence to UK Prosperity – rather catchily known within the Ministry of Defence as the Dunne Review.
The Secretary of State for Defence invited me in mid-March to undertake this review, in part to make explicit what has previously been presumed, and in part to help illustrate what Defence does for the economy, over and above the obvious.
Having spent nearly four years in the MoD with Ministerial responsibility for Defence Procurement and Exports, I have been well placed to explore these issues.I believe this is the first time in several years that such an exercise has been undertaken, seeking to capture the full impact of the whole Defence effort, namely the Armed Forces, civil service and defence industry which supports them, across the United Kingdom.
We can all recognise that defence plays a vital role in underpinning the economic prosperity of this country. Some 500,000 people are employed directly or indirectly in Defence, and Defence is collectively one of the largest and most consistent developer of skills across the economy, with over 25,500 apprenticeships every year.
But Defence innovation has also spawned much of the applications we take for granted in our everyday lives – from the internet, to GPS signal, to the technology that allows Hot-Spot to help umpires make decisions in test matches.
In putting my review together, I engaged with senior leaders within the MOD, the Armed Forces, other Government departments, including the devolved administrations, as well as defence industry trade associations, industry groups, unions, academics, some commentators and the largest 20 or so individual defence suppliers.
One of the challenges encountered immediately was the availability of data. The Office for National Statistics has not collected economic data on the defence sector for some years. So one of my recommendations is to encourage defence economic data sets to be re-established.
In all, my Report runs to some 90 pages and makes 41 Recommendations. In characterising my recommendations, I first sought to look at how defence can embed the Prosperity objective which it has accepted since the Strategic Defence and Security Review of 15 into its own processes and procurement.
The MoD needs to take account of prosperity in all major procurements. It has started to do so explicitly, for the first time that I have seen, in the way the Type 31e Frigate competition is being run. The department has also very recently, in fact coincidentally during the course of my work on this review, adopted a new Outline Business Case approval step, to be introduced at the outset of the investment approvals process for major projects, which will be very welcome if it secures swift senior decision-maker buy-in.
I have made recommendations as to how the MoD should develop practical guidance for its acquisition teams how to assess UK prosperity, as well as some suggestions how to capitalise on the reputation of our Armed Forces to help UK suppliers boost export success.
The second main theme is around increasing agility in procurement. As a Conservative, I believe competition is the best way to drive value for money for the taxpayer who fund our Armed Forces. I also believe competing for business in international defence markets and domestically helps to keep our defence industry match fit and vibrant. But alongside EU competition rules, we have created a procurement process which can take years to make decisions, let alone bring new capability into service.
I am suggesting the MoD should use the opportunity of Brexit to reflect on whether EU competition rules should continue to apply to defence procurement. Major procurements should be able to take into account UK content, whether capital cost and/or through life support cost, once we have left the EU.
In addition, I am recommending that the MOD and Armed Forces look to build on the emerging initiatives to develop and deploy new capability more rapidly. In this week of celebration of the RAF’s 100th anniversary, it is fitting to highlight Air Command’s Rapid Capabilities Office, set up last year, as an example of innovation in agile procurement.
Third, I have made some suggestions as to how the MOD and Armed Forces can work with the defence industry, and how Defence and the rest of the economy could work more closely together.
Defence needs to be able to absorb the huge technological change – particularly around data – which is affecting the entire economy, as well as the threats we face. I see a growing financial investor interest in MilTech – cyber, defence and security – which the MoD should explore for innovation.
I look forward to seeing how the department responds to these recommendations, designed to help grow the contribution of Defence to the prosperity of the UK. If accepted, and implemented, I believe in turn they should help Defence to prosper too.