Douglas Carswell

Defence procurement needs radical change

Philip Hammond, the defence minister, this week abandoned one of his proposals to overhaul defence procurement.

Ironically an attempt t0 bring more choice and competition into the system has been defeated by a lack of choice and competition. Only one bidder came forward to run the procurement process.

I am sorry to see this setback, but am sure it will be just that: a temporary setback.

Britain cannot afford for Hammond not to press ahead with change.

For decades, Whitehall has been monumentally useless at converting billion-pound defence budgets into weapons.

It is not just a case of the MoD not having enough expertise and personnel, or enough bright lawyers. Those are symptoms of the malady, not the disease itself.

The problem with defence procurement lies in the way that successive governments have consolidated the defence sector. Firms were encouraged to merge. Giant consortiums were formed. This might have achieved economies of scale in the defence industry, but it has had one very serious consequence.

In any market, when you restrict supply, the seller sets the terms of trade. This is what has happened in defence.

Defence production costs have soared. Squillions have been spent on second-rate options, delivered late.

Add in some of the protectionist ideas that corporatism inevitably breeds, and you end up with one of the largest defence budgets in the world, but serious shortages of kit. Aircraft carriers without aircraft. Helicopters that cost twice the price of the better alternatives. Loitering munitions programmes that ought to have been wound down. UAVs that contain yesterday's technology, when we have spent enough on them to have today's.

We need to start spending our limited defence budget in the interests of our armed forces, not the contractors. We should certainly never spend the defence budget as a giant job creating scheme.

Hammond is seeking to make many long overdue changes. Off-the-shelf procurement is becoming the default. Various vested interests that have their paws all over defence spending are being reined in. Various parasitical corporate interests must be taken on and broken.

The sooner Hammond presses ahead, the better.

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