The Nimrod Review - Official Documents

The Nimrod Review
14.25
408
forces are engaged in less conventional, counter-insurgency and peace enforcement
operations in defence of our national security, so now our planning assumptions are tested
in the heat of battle, with no room for delay or failure. Every one of our servicemen and
women has the right to know that we are doing everything possible to ensure that every
pound of investment in our equipment programme goes towards the front line and is not
wasted in inefficient or weak processes of acquisition.
That is why I asked Bernard Gray in December last year to conduct a detailed examination
of progress in implementing the MOD’s acquisition change programme, as I hope right
hon. and hon. Members will recall. I have to be satisfied that the current programme of
change is sufficient to meet the challenges of the new combat environment that we now
face. To date, I am not. I expect to receive the report shortly. Bernard Gray has conducted
a thorough and wide-ranging analysis. I am confident that when his report is published, it
will be both honest about the scale of the task that confronts us and clear in describing a
detailed and radical blueprint to reform the process of acquisition in the MOD from top to
bottom. That is something that we must get right. There can be no room for complacency,
and given the current tempo of operations, we have no choice but to act with urgency. I
will publish Bernard Gray’s report before the summer recess, and I will come to the House
again to outline the Government’s response to it.
Given the size of the challenge that we face, I am in no doubt whatever that change must
happen and that it must be radical. There must be changes to the system and structure
of acquisition process, changes to the incentives that drive and determine behaviours –
behaviours that have often led to waste, delay and efficiency, bedevilling the efforts of
both Labour and Conservative Governments over a long period – and changes to the
skills sets of those involved in acquisition. I am committed to doing everything that I
can to make it possible for our armed forces to be better served, and I will make future
announcements in due course.”
Unfortunately, the Rt Hon. John Hutton MP resigned as Secretary of State for Defence the very next day, on
5 June 2009.
Mr Bernard Gray’s evidence
14.26
14.27
I had the benefit of meeting Mr Bernard Gray. He is an extremely knowledgeable expert on Defence
Procurement. He was Special Advisor to the Secretary of State for Defence in the period 1997-1999 and
played an important role in drawing up the 1998 SDR. He told me that he presented the final version of his
Report on Defence Procurement to the new Secretary of State for Defence, the Rt Hon. Bob Ainsworth, in
July 2009. As at the date of sending this Report to the publishers, Bernard Gray’s report has still not been
published. 24
Bernard Gray told me that the MOD’s own figures showed that:
14.27.1 The average time over-run on MOD procurement programmes is currently 80% (or about 5 years
from the time specified at initial approval through to in service dates);
14.27.2 The average cost over-run on MOD procurement programmes is currently 40% programmes is c.
40% (or about £300 million); and
14.27.3 The frictional costs 25 to the MOD of this systematic delay is in the range of £900m – £2.9 billion
p.a.
24 Bernard Gray’s Report was suddenly published on 15 October 2009, after completion of this Report for printing.
25 By which I mean the money that is wasted each year (and which would otherwise be available to spend, whether within the MOD budget or
elsewhere) as a result of the delays.