It is hard not to be cynical when looking at British defence programmes, or to be more precise the management of those programmes. Over the years British defence procurement has been characterised by short term thinking and ineffective financial management.
This has led to cost overruns and seemingly an inability to deliver the end-user a system that meets the operational requirement, works properly, can be sustained in service, and actually arrives on time and on budget. Getting procurement right still remains an oft spoken ambition, but making it a reality has proven to be elusive.
Britain is not alone in having major problems with defence procurement and defence budgeting, other nations across Europe are experiencing similar difficulties. However, in Britain it always seems that it is only a matter of time before unpleasant procurement news will surface and, depending on its importance and visibility, create a scandal, or a resigned shrug where a negative result is somehow expected. Despite this, there are times when there is an outbreak of optimism and a belief that this time, finally, the Ministry of Defence (MoD) will manage to get its spending plans under control and that hitherto unsuspected and unused programme management skills will emerge. Then as the MoD, the procurement authorities and the end-users enter the sunlit uplands of controlled spending, effective procurement and long-term support plus happy end-users, the obvious truth that this can only be fiction emerges and all parties concerned resume the normal state of depression and resignation that the system will never be fixed.
Despite all of this negativity, all of a sudden some positive events were happening for the MoD. In November 2020, the British government delivered good news to the MoD. The UK’s Treasury announced that the MoD would receive GBP 16.5 Bn of additional funding, over and above the funding that they had expected to receive between 2021-2022 and 2024-2025. Then came the publication of two important defence strategy documents in March 2021: “Global Britain in a Competitive Age, the Integrated Review of Security, Defence, Development and Foreign Policy” and the MOD Command Paper on Defence (CP411) “Defence in a Competitive Age.” With these documents Britain had established its defence policy/strategy for the next decade.
According to the National Audit Office (NAO) in their report on the value for money aspects of the MOD ‘Equipment Plan 2021 to 2031,’ the MoD believed that: “the combination of these reviews (the two strategy documents) and the settlement (the extra funding) represented a real chance to remedy the affordability problems it had struggled with in its equipment planning over many years, as well as a chance to make a step-change in defence capability.”
Dealing with Realities
On paper this all sounded grand, the problem is that the MoD and defence policy do not act in isolation, there is more going on outside the British defence ecosystem than the MOD can adequately plan to confront. Events in London and beyond challenge the assumptions that the British government had in 2020 and 2021, the world is a very different place today than it was in 2021 and the defence and foreign policy challenges facing Britain today are far more complicated than they were in 2021.
On a political level, the Conservative government had a substantial majority from its victory in the December 2019 election. It moved forward on resolving the issue of Brexit, which further solidified its voting base. However, what would transform the political and economic situation in Britain were the three waves of COVID that rolled in across 2020 and 2021. The measures taken to control COVID gradually exhausted the political capital of the government, challenging its power, authority and eventually the legitimacy of its leadership. The economic consequences of COVID, especially the massive increase in government expenditure would have increasingly negative impacts. The loss of faith in the economic competence of the government, would further weaken their position.
The ‘Global Britain’ integrated review and the Defence Command Paper of March 2021 were documents prepared by a confident government, but by the end of 2021 it was a government lacking confidence. Even so, nobody could predict what was going to happen in 2022 and the possible implications of those events for the future of major British defence programmes.
In early 2022 British Prime Minister Boris Johnson was beset with domestic political problems. Internationally, his provision of extensive support to Ukraine in response to the Russian invasion demonstrated unexpected leadership and political acumen. However, once members of his own government started turning on him, his reign was over in July. Then followed a leadership election in the governing Conservative Party and Liz Truss became Prime Minister in September, she lasted some 49 days, and was succeeded in late October by Rishi Sunak.
In the midst of all of these changes of government, it suddenly became obvious that Britain had major economic problems. There was excessive government debt, inflation was rising, the economy was anaemic with low or zero growth, and the country was essentially in a recession. To be fair, post-Ukraine invasion, most of Europe was in an uncertain economic situation. The reaction of the Sunak government was somewhat old-fashioned, it would attempt to control spending whilst increasing taxes. It is having to deal with a wave of strikes and its popularity looks likely to plummet even further. It remains to be seen if the Sunak government will be up to meeting these economic challenges.
Dangers in Defence
While the Johnson government might have been ideologically committed to increasing defence expenditure and looking to play a more overt role in support of its ‘Global Britain’ agenda, the same cannot be said of the Sunak government. The crux of the matter is this – “Can a less than popular government justify, or be prepared to justify, increased defence expenditure and major defence procurement programmes in the midst of an economic downturn?” The most probable answer to this question is that they will desperately try and avoid making any decisions whatsoever. The problem with that is that eventually you will have to make a decision and by that point, any decision that you make could well be ill-considered.
All of which means that defence spending and procurement promises that seemed so certain even a few months ago, must now be considered in doubt. We will have an indication of what direction the government intends to take, most probably by the end of March 2023. This will see the issue of the Treasury’s Spring Statement which should provide an idea of how the government sees its financial situation and constraints. In the same time period, the government is due to publish and updated version of the ‘Integrated Review’ and in the wake of that the MOD will publish its updated Defence Command Paper. Only then will the official policy direction be known.
Being realistic, it is hard to see any grounds for confidence that the British and other European economies will experience any real economic improvement in 2023. Energy will remain a major issue in the first quarter, with matters not helped by the fact that the global economy is also likely to be dealing with an uncertain future. Added to which, matters will not be helped by the continuing COVID crisis in China, the true magnitude of which remains uncertain, as is its potential impact on the global economy.
The British government will be under an immense amount of fiscal pressure in 2023, inevitably this must have an impact on defence spending. If the current government wishes to remain in office, it has all of 2023 and the majority of 2024 to put the economy on the right track and restore its popularity. To win that future election, the government will have to make difficult decisions in 2023 and hope that they get the payoff in 2024. This is hardly the environment for a considered long-term defence strategy and effective procurement planning.
Armour Modernisation
In an environment where funding is uncertain and where the commitment of the current government to defence modernisation is in doubt, this brings us to the current state of play in British Army armour programmes and the future of these programmes in the face of these doubts over political support and funding. At one stage there were four major armour programmes being worked on, these were: Warrior Capability Sustainment Programme (WCSP), Challenger 2 upgrade, Ajax, and the Mechanised Infantry Vehicle (MIV) for which the Boxer had been contracted in November 2019.
Even after more money had been promised to the MoD in late 2020, and after the release of the Integrated Review and the Command Paper in March 2021, the British Army nonetheless found itself with WCSP, one of its four major programmes, cancelled in March 2021. It is true that this programme was running late and was over budget, but the programme did look to be salvageable. However, the programme was cancelled primarily to save money, although at the time the implication was that cancellation was caused by a lack of confidence that the programme could successfully deliver.
With no WCSP, the existing Warrior fleet will remain in service for lack of an alternative, but with the originally stated out of service date being 2025, there is going to be a major capability gap after this point unless some of the vehicles are kept on. In an ideal world there would be an IFV programme to replace Warrior, unfortunately such a programme does not exist at this point.
Over the years there have been mixed signals concerning the British Army Challenger 2 tank fleet, but eventually they embarked on the Challenger 2 Life Extension Programme (LEP). This gradually grew in scope until it evolved into the Challenger 3 upgrade programme and on May 7, 2021, RBSL were awarded a GBP 800 M contract to upgrade 148 tanks out of a current fleet total of 227 to the Challenger 3 configuration. In an answer to a Parliamentary question in December 2022, the Secretary of State noted that: “Challenger 3 is scheduled to enter service in 2027, with an out of service date of 2040.” The British Army desperately needs the capabilities of this upgraded tank, but in the current environment, some might ask if spending GBP 800 M on a tank intended for 13 years of service is a logical course of action?
This brings us to Boxer, in a recent Parliamentary answer the current state of play on the programme was described as follows: “623 Boxer armoured vehicles have been ordered against a funded provision of 1,016. The 1,016 includes potential future variants which are being explored on a longer-term basis with allies and industry in line with the Land Industrial Strategy.” There is great enthusiasm surrounding the Boxer programme, costs are under control and no technical catastrophes have been encountered. Indeed, it almost seems that if a new armoured vehicle-related requirement emerged at the MoD, Boxer would be the first suggestion to meet it!
Then we come to the Ajax programme which has found itself mired in controversy for some considerable time. The NAO described the programme status in a March 2022 report: “The [MoD] has a GBP 5.522 Bn firm-priced contract with General Dynamics Land Systems UK (GDLS-UK) for the design, manufacture and initial in-service support of 589 vehicles. At December 2021, the Department had paid GDLS-UK £3.167 billion and, at this point, GDLS-UK had designed the vehicles, built 324 hulls and assembled and completed factory acceptance testing of 143 vehicles. The Department had received 26 Ajax vehicles, as well as associated training systems and support.”
In its report on the Ajax programme, the NAO contends that both the MOD and the contractor did not understand the scope and complexity of the programme. Difficulties with the programme caused the date for Initial Operating Capability (IOC) to be pushed from the initially envisioned 2017 out to July 2020, however this date was also not met, and IOC was pushed to June 2021. Once again this IOC date was not met, but at this point it was the least of the problems facing Ajax, as significant noise/vibration issues had led to the trials programme being halted in November 2020. A solution was apparently found, and trials commenced once more in March 2021, then safety concerns resurfaced, and the trials were halted again.
The Ajax programme was in serious trouble, but by December 2022 the situation had changed somewhat, with the publishing of the MoD’s ‘Ajax Noise and Vibration Review’ policy paper, in which the MoD stated that there was a system to manage noise and vibration problems. The solutions comprised noise-cancelling headsets for the crew to reduce the effects of noise, and unspecified “system adjustment”, along with “managing exposure times” for the crew to reduce vibration issues. Neither of these seem like particularly permanent solutions, but they are evidently seen as sufficient to allow trials to continue. Answers to Ajax-related Parliamentary questions in December 2022 on the Reliability and Growth Trials revealed that: “Work to recover the Armoured Cavalry Programme is well underway and will be taken forward for formal approval by Ministers from this Department and His Majesty’s Treasury early in the New Year.” A question on how much time would be necessary to complete these trials revealed that: “The Reliability Growth Trials and subsequent analysis are expected to last 18 to 24 months.”
There is no question that Ajax is a critical programme for the British Army, it is central to its future organisation and strategy. The crux of the matter is whether there is enough faith that the MOD can manage the programme and deliver the desired capability in an acceptable time scale. There are two schools of thought here, the first of these is that the programme is now on track and there is no alternative except to continue. The other is that the programme cannot be recovered and should therefore be cancelled, an option which would only benefit lawyers who would be involved in litigation surrounding a cancellation. Then there is the challenge of what to do instead, can a suitable replacement capability be found, and could it be afforded?
Of the four major armour programmes that we have discussed, Boxer and Challenger 3 are both on course, while Warrior is cancelled. As for Ajax, it appears that it has managed to claw its way back from the edge of the grave. The question now is has Ajax done enough to survive? The answer to this question should emerge in the first quarter of 2023.
David Saw
