Yesterday, Alistair Darling pledged £4 billion for the MoD, earmarked for Afghanistan. He did not specify what the cash would buy, presumably because the Defence Spending Review will take place after the election. But a day is a long time in politics and the forthcoming spending review no longer seems to be so decisive: BAE and the MoD have signed a £127million four-year contract to design the proposed Type 26 frigate.
This is welcome in principle: the Type 22 and 23 frigates need to be replaced eventually and British companies and their employees will prosper. But this contract should have fallen under the spending review – defence procurement remains unreformed and the nation can ill-afford a £127million design contract.
Two influential reports, the Gray Report and the Haddon-Cave report, concluded that the MoD’s ‘conspiracy of optimism’ initiates these grand projects. As Haddon-Cave put it:
‘Industry and the Armed Forces have a joint vested interest in sponsoring the largest programme at the lowest apparent cost in a ‘conspiracy of optimism’. This ‘conspiracy’ gives rise to an over-large programme, and the deep reluctance to cancel projects means that these pressure are not relieved.
When this over-large and inflating programme meets the hard cash totals that the MOD has been allocated each year, the Department is left with no choice but to slow down its rate of spend on programmes across the board… over time, costs exceed budgets.’
Therein is a partial explanation of the frequent, and often fatal, shortages of unglamorous equipment. If challenging vested interests is the function of government, then the next government must confront the MoD.
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