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How to prepare the MOD for the future

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As part of its new defence strategy – intended, in the words of the Prime Minister, to get Britain ‘match fit’ for a more competitive age – the government has set aside £6.6 billion to invest directly in research, development and experimentation. The intention, says Defence Secretary Ben Wallace, is to not only bolster the UK’s military and cyber capabilities, but also to generate high-skilled jobs and further export potential.

But just how successful has Britain been when it comes to defence innovation? In a year in which our traditional, strategic role has once again been thrown into question after the withdrawal from Afghanistan – and a year in which Wallace himself admitted we are no longer a military superpower – can our science and technology base have a role in revitalising our standing on the world stage?

To find out, The Spectator hosted a lunch bringing together defence experts – from parliament and beyond – and manufacturers to discuss how the UK could strengthen its defence development base. It was a discussion sponsored by SubSea Craft, a British-based small business which recently developed its own advanced marine craft (the VICTA diver delivery unit) which can transport special forces operators directly to their operating area.

Somewhat unusually for a military-use vessel, VICTA was developed entirely from private capital. As former army officer Graham Allen, the company’s founder, explained in his opening remarks, the product started life as a digital design which eventually became a working prototype with the backing of investors (including Stephen Lansdown, the co-founder of investment firm Hargreaves Lansdown). It was a strategy that had paid off. ‘We now have several of the prime defence companies interested in working with us,’ he said.

For SubSea Craft’s chief executive, Scott Verney, the product’s utility was demonstrated by the current threat horizon. The growing risk of new maritime threats – whether from Russian submarines disrupting critical communication infrastructure in the Atlantic or ongoing tensions in the South China Sea – was increasingly evident. The West faces the possibility of being effectively shut out from parts of the seas.

‘If you look at those spaces where the West might be excluded, the defence systems are typically set up to detect larger assets such as submarines,’ said Professor John Louth, formerly of the Royal United Services Institute think-tank and now a non-executive director of SubSea Craft. As a much smaller vehicle with a lesser signature, VICTA would be able to evade these systems and transport military personnel to a target without detection.

But what did the vessel’s journey from pipe dream to prototype say about defence investment more broadly? For Allen, the lesson was clear: the power of private capital. ‘We wouldn’t be anywhere near where we are without private investment,’ he said. ‘In seven years, we’ve already built two crafts.’ This was much more agile, he explained, than the typical sector approach, in which larger companies took on government contracts.

For Julian Lewis, a former chair of the defence select committee, this model offered significant benefits for government procurement, too. ‘If you’ve got a relatively small amount of money for a project, it’s going to go much further with a small business than with one of the defence primes,’ he said. His parliamentary colleague, Richard Drax, agreed. ‘We all know how innovative the private sector can be,’ he said. ‘So why can’t we put out a document saying exactly what we need and see if they can do it?’

Flick Drummond, founder of the all-party parliamentary group on cybersecurity, took a similar view, seeing advantages in the potential for public and private sector funding to work in tandem to get quicker results. ‘You’re not going to get private investors funding projects like VICTA unless they know they’ll get their money back,’ she said. ‘Which means the government needs to show it’s willing to back these kinds of projects.’

With the approach striking a chord with the politicians around the world, were there any signs that the Ministry of Defence might be open to such an approach? ‘They’ve said they’re going to have a business strategy following the integrated review, so there’s an open door there,’ said Louth. He added, however, that the process had historically been far too siloed. Allen expressed concerns that the MoD had cut back on its senior technologists: a decision which was clearly at odds with the government’s new defence strategy.

Furthermore, the willingness of US firms to acquire start ups – and then throw money at their ideas – meant that the UK risked seeing its patents snapped up and sent stateside. ‘You then get into the position where the MoD is paying to buy technologies that could have been developed here,’ he said.

For a country looking to expand its status as a tech and science superpower it was a less than ideal position. Can this deadlock be broken? That will be the test to watch.

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