ADS gives White Paper thumbs up despite conflicts in objectives and publication delays

Posted on 2 Feb 2012

Aerospace, defence and security trade body ADS has praised the Ministry of Defence White Paper on security and defence equipment for satisfying most of its industries’ procurement issues, despite the delay in its publication.

The results of the consultation on defence and security equipment procurement, set up in March 2011, was widely hoped to provide industry with answers on a range of key questions such as investment in specific technology classes, support for exports and the level of the MoD’s commitment to off-the-shelf procurement.

Released on Feb 1, the white paper – National Security through Technology: Technology, Equipment and Support for UK Defence and Security – was due to be published several weeks ago, but ADS supported the delay in the document’s delivery. “Contrary to general opinion, the delay in the White Paper’s release would appear to have been beneficial, resulting in deeper understanding of industries concerns within the Government,” said ADS’s chief executive, Rees Ward.

A chief concern of the companies that ADS represents expressed in the consultation was how the Government proposed to couch the potentially conflicting aims, of open market, off-the-shelf equipment procurement – opening the market for foreign, perhaps cheaper suppliers – and promoting an export-led growth strategy.

The paper’s authors, minister for defence, support and technology Peter Luff and James Brokenshire, minister for crime and security, expressed this in the report, firstly saying: “Wherever possible, we will seek to fulfil the UK’s defence and security requirements through open competition in the domestic and global market, buying off-the-shelf where appropriate, in accordance with the policies set out in this paper.”

And then later: “Our policy on technology, equipment, and support for UK defence and security also supports our wider economic policy objective to achieve strong, sustainable, and balanced growth for the UK.”

The paper also stated that the Government was committed to supporting SMEs.

Responding to the consultation’s concern that an open market approach would unfairly penalise UK SMEs, the paper said the MOD has traditionally used a prime contractor model for its largest procurements. It said “this has meant that the Government is not doing enough to make the most of the many thousands of small- and medium-sized enterprises that are part of the MOD’s supply network, a point reflected in many of the Green Paper consultation responses. We are therefore taking a number of steps to make defence and security procurement as accessible as possible to small- and medium-sized-enterprises, as part of our wider work,led by the Cabinet Office, to simplify public procurement processes to reduce burdens on industry.”

includes benefits to the economy as a whole””]Rees Ward, CEO of ADS, said: “There are over 3,000 SMEs in the UK defence industry – more than France, Germany, Spain, Italy and Norway combined. These entrepreneurial and agile companies are the bedrock upon which industry success has been built, but they can only thrive if there is work available to UK industry… Working with the MoD on their specific proposals over the coming months will be of paramount importance in ensuring that SMEs receive the support they need.”

Detail on the technology
ADS also supported the Government’s proposals on Technology in these sectors. “Maintaining the Research and Technology budget above a fixed rate demonstrates a long term commitment from Government towards the future of the UK Defence and Security sector,” said Mr Ward.
“It is reassuring for Government to guarantee an investment which will deliver significant returns to the overall economy. Studies show that a defence investment of £100m will deliver returns of £230m.”

Commenting on the Government’s proposals for buying off-the-shelf equipment, the most contentious issue raised in the consultation, Mr Ward said: “Industry recognises that Government will inevitably meet many of its requirements by off the shelf procurement. HMG has long espoused open competition as its main acquisition method and industry is comfortable with this approach.

“The question is how it is implemented in practice. The need to develop capability in the UK remains, as the White Paper recognises in its section on technology. Industry believes that each procurement should be evaluated against criteria which ensure that our Armed Forces needs are met and the value for money test includes the benefits to the economy as a whole rather than any narrower measure. .”

The paper also said that the MOD is also evaluating the potential benefits of appointing a Senior
Responsible Owner within Government to head up a security authority and the merits of developing a UK Security Brand –a signal that Government is seeing the security industry as a high value sector in its own right, such as aerospace and automotive.

Rees Ward said: “This… demonstrates a real commitment from Government for this hi-tech market with enormous export potential. With one of the principal roles of any government being national security, the commitment to evaluate the benefits of a Senior Responsible Owner – or more simply a security champion – in Whitehall, responsible for industry engagement and development of the UK Security Brand, is a real step forward.”