"The MOD's standard route for acquiring priority
equipment has not been working in the case of armoured vehicles.
Too many major projects have been cancelled, suspended or delayed
and the Armed Forces will not be fully equipped with the vehicles
they need to carry out their full strategic remit until at least
2024-2025.
"While some of the lessons learned from the successful
use of the Urgent Operational Requirements process can be applied
to core projects in the future, a long term solution is likely to
need significant further investment, realistic plans and stable
budgets sustained over time."
Amyas Morse, head of the National Audit Office, 20 May
2011
The suspension and cancellation of a number of key armoured
vehicle projects since the 1998 defence review has resulted in the
Armed Forces facing a significant shortage in the principal
armoured vehicles they require, until at least 2024-2025.
Today's National Audit Office report found that the Department's
standard acquisition process has been undermined by a combination
of over-ambitious requirements and unstable financial planning.
Despite the commitment of considerable resources, since 1998, the
MOD has received only a fraction of the armoured vehicles it has
set out to buy through its standard acquisition process.
The Department's reluctance to compromise in setting
technologically demanding requirements under its standard
acquisition process has put the timely and cost-effective delivery
of the equipment at risk. Unwieldy procurement processes have not
coped well with rapid changes to equipment requirements in the
light of operational experience, resulting in a number of armoured
vehicle projects being delayed or abandoned.
Armoured Vehicle projects have also suffered from unstable
budgets and continual changes to financial plans. As the NAO
reported in its Strategic Financial Management of the Defence
Budget report, the cycle of unrealistic planning followed by
cost overruns has led to a need to find additional short-term
savings on a regular basis. Spending to date includes £321 million
on cancelled or suspended projects and a further £397 million
funding on-going, but delayed, projects. Without significant
additional investment sustained over time, the Department will have
a shortfall in the armoured vehicles it says it needs until at
least 2024-2025.
To address shortfalls in equipment for current operations, such
as in Afghanistan, the Department has placed greater reliance on
the Urgent Operational Requirements (UORs) since 2003, at an
additional cost of £2.8 billion. This has been more successful and
has significantly improved protection levels for UK forces against
today's threats. The UOR process is not a sustainable substitute
for the standard acquisition process. While some UOR vehicles may
be taken into the core fleet, the Department does not expect these
vehicles to offer a long-term solution to its armoured vehicle
needs.
Publication details:
HC: 1029, 2010-2012
ISBN: 9780102969696