gdp's Comments

http://www.conservativehome.com/ : Andrew Griffith: How the Government can put enterprise at the heart of the recovery

Sat, 19 Sep 2020 12:01:53 +0000

Those who are convinced that a free market economy is what brings prosperity to all should also acknowledge that competition is the essence of the enterprise culture and that it alone fosters innovation, wealth creation and the desire to win. For an economic model that relies on voluntary exchange between buyers and sellers and seeks to deliver goods and services to everyone at a price they are willing to pay, vigorous competition among vendors on the basis of a level playing field is absolutely essential. It is therefore heartening to learn that senior members of this government, including the Prime Minister, are self-confessed free marketeers and are willing to go out of their way to praise the virtues of the market over the State at every opportunity. The central tenet of capitalism is that those participating in it do so in the expectation that they will profit from their own labour and initiative. Yet, the last several years has seen the widespread belief that individuals at the top of big business and corporate houses are benefiting at the expense of their customers, employees, supply chain partners and the local community. The post-second world war experience has repeatedly vindicated the view that the single most powerful driver of prosperity is profit-seeking businesses trading within a law-governed and competitive market economy. However, in the new millennium, the recently exposed frailties of capitalism are all too evident in markets in which the government is the main or only customer, which happen to be some the most closed in the world, with significant barriers to entry. In the UK, the government spends £284bn of taxpayers’ money each year to purchase goods, services and labour from the private sector, making it quite easily the single largest buyer. The problem with markets in which the government is the only customer is the endless subsidies handed out to incumbent businesses, which insulates them from being usurped by agile and innovative start-ups, thereby preventing wealth being spread about. This is further compounded by the fact that, such markets are highly susceptible to cronyism – the nexus between the governing elite and the business elite that contrives to put the interests of business first, ahead of the wants, needs and expectations of ordinary citizens. Not least, because the twin evils of lobbying and corruption rear their ugly heads every time taxpayers’ money crosses the boundary between the public sector and the private sector. It is, as the economist Randall Holcombe puts in his book “Political Capitalism” a “system in which the economic and political elite cooperate for their mutual benefit.” The political elite tilt the economic playing field in favour of the economic elite, privileging them through subsidies, regulatory protections and targeted tax breaks. In exchange, the economic elite then help to ensure that the political elite remain in power. The rest of us pay the bill for this quid pro quo through higher taxes, higher prices, and a less efficient, less dynamic economy. As the UK looks outwards beyond the EU, there is a fear among free marketeers that uncompetitive businesses will intensify their lobbying efforts during the transition period, to shield themselves from being exposed to foreign competition. @JagPatel3

http://www.conservativehome.com/ : Daniel Hannan: Does the army really still need tanks? Or the navy aircraft carriers? Or the rest of

Wed, 2 Sep 2020 06:08:01 +0000

Of course, it makes sense to co-ordinate our procurement with the US. This government is doing exactly that. It has decided to align its equipment procurement activities not only to narrow the technological gap between UK/US forces during joint operations, but also benefit from the network effects of economies of scale. In a free market of mass-produced products, it is widely accepted that purchasers of goods can benefit from greater buying power because manufacturers are able to offer lower prices for the same design configuration of a fully engineered product, due to large-scale production and economies of scale, underpinned by bulk orders from different customers, which allows longer production runs to be maintained. The main reason behind this government’s decision to buy off-the-shelf equipment is that there already exists a fully functioning and verifiable production line, tooled-up for the product being manufactured, which also attracts the interest of other potential customers around the world. Therefore, it stands to reason that, for the government to negotiate the lowest possible price for the prime equipment (and its Support Assets package), it should hold back from taking the main investment decision until the price has fallen to an affordable level, by allowing other government customers to get ahead of it, before placing its order. This delay is further justified by the fact that the value of sterling has fallen significantly against major currencies since the EU referendum vote, making off-the-shelf equipment ordered from abroad a little bit more expensive. In the event that the vendor subsequently receives further orders for the same equipment from other countries, then according to the laws of economics, the unit price of that equipment should come down by a proportionate amount, enabling all earlier government customers to demand and obtain a cut in the contract price already agreed. So, relying on economies of scale is a pretty good reason why buying off-the-shelf equipment makes sense because it is the only type of procurement strategy that offers the prospect of a reduction in price after the supply and sustainment contract has been signed – unlike the other two approaches, namely procurement through open competition and simply handing out single-source, development contracts on a preferential basis to the usual suspects – which only guarantee an increase in costs, post contract award. Indeed, the government is so enamoured by the utility of this network effect mechanism of economies of scale that it wasted no time in putting it to use whilst procuring one of its most important off-the-shelf pieces of equipment, the Apache AH-64E attack helicopters manufactured by the US defence contractor, Boeing. Instead of placing an order directly with the vendor, the UK government has deployed an innovative approach. It signed a Foreign Military Sales agreement with the US government for 50 Apache AH-64E helicopters, which the latter then combined with its own considerably larger order as a ‘job lot’ without necessarily telling the vendor, to leverage its enhanced buying power and negotiate the lowest possible unit price from Boeing, thereby securing best value for money for both, the US and the UK. For confirmation, see this answer from the then Parliamentary Under-Secretary of State for Defence Procurement to a written question in the House of Commons, shown in this illustration: pic.twitter.com/KG9vuKcBhp. Here is an excellent example of the UK and US governments working together, in their mutual interests, to exert maximum pressure on the private sector so as to extract significant price concessions which they would not otherwise be able to do in the absence of competition. It will come as no surprise to learn that the P-8A Poseidon maritime patrol aircraft have also been bought in this clever way. @JagPatel3

http://www.conservativehome.com/ : Allan Mallinson: What is the army for?

Sun, 30 Aug 2020 07:22:15 +0000

The scope and depth of the Integrated Review of Security, Defence, Development and Foreign policy should be appropriate to the UK’s place in the world as a newly independent, sovereign nation in the post-Brexit era, recognising its enduring commitment to promoting good governance at home & abroad and security & prosperity for all, underpinned by mutually beneficial free trade and unhindered movement of people. That is in an ideal world. However, the harsh reality is that the Integrated Review, led by the Cabinet Office, will be tempered by what is realistically possible within the constraints of a Treasury-specified funding envelope, which is certain to be severely cut back in the current FY 2020/2021, and beyond, due to the downturn in the economy brought about by the Covid-19 pandemic. Even more importantly, it will be driven by this government’s unwavering determination to raise the lot of its people through pursuit of an independent trade strategy – most notably, a comprehensive free trade agreement with its ideological, freedom-loving partner and closest defence, security and intelligence ally on the other side of the Atlantic. To this end, the Integrated Review needs to focus on this economic, military and technological relationship with the United States and ask why this country has increasingly come to rely on the US for most of its new defence equipment, how this state of affairs has come about and what it portends for the future of the defence manufacturing industry – given that decades of early engagement, collaboration and cosy partnerships with the defence industry has only achieved one outcome – persistent delays and cost overruns on defence procurement programmes. It is safe to say that the defence manufacturing industry is ill-equipped to help realise the government’s vision of a thriving and globally competitive defence sector trading freely with countries beyond the EU, post Brexit. @JagPatel3

http://www.conservativehome.com/ : Daniel Hannan: Politicians can't win. When they don't give us what we want, we protest. And when the

Wed, 19 Aug 2020 06:30:01 +0000

Yet another example of the failing administrative state is the MoD’s arms-length procurement organisation at Abbey Wood, Bristol which has presided over persistent delays and cost overruns on defence procurement programmes for as long as anyone can remember. Dominic Cummings sees the Integrated Review as an opportunity to drive down equipment procurement costs and tackle waste by bringing new thinking to the farcical defence procurement process which, he says, has squandered billions of pounds, enriched some of the worst corporate looters and corrupted public life via the revolving door of officials/lobbyists. In addition to visiting secret MoD sites around the country, he also needs to go on a fact-finding mission to Bristol if this vision is to be realised. To be able to understand and appreciate the reasons why MoD has got itself in this terrible mess, it is instructive to look at the recent history of defence procurement in the UK. Such was the intense focus of attention and diversion of resources onto examining alternative management models for MoD Abbey Wood during the 2010-2015 Parliament that, the urgent need for the existing, flawed procurement process to be replaced by a new acquisition policy which deals with the usual delays and cost overruns was completely ignored by the then coalition government. The main reason why the government went down the GOCO route (the so-called Government-Owned, Contractor-Operated governance model) is because it was deemed not to have the necessary skills in-house, to undertake its procurement duties with confidence and was accordingly persuaded to outsource this role to the private sector instead. However, the inability of the government to find and install a private sector operator to run MoD Abbey Wood on a for-profit basis has left it in the worst possible situation – the status quo – which guarantees ongoing failure on defence equipment procurement programmes. Indeed, the quality of management skills in the public sector is so poor that there is not a single person in the pay of the State who is equipped with the necessary blend of leadership/communication skills, specialist knowledge, cross-discipline expertise or prior experience to, not only correctly identify the deep-seated problems associated with the existing procurement process but also come up with simple, workable, easy-to-apply solutions which will tackle these shortcomings – yet, it is the responsibility of government to shape, and then implement acquisition policy which will deliver equipment to the Armed Forces that is fit for purpose, adequately sustained in-service and constitutes value for money through-life. This lack of leadership talent and management capability in Whitehall would explain why there is a massive void in defence procurement policy. In response to this deficiency, the governing elite has concluded that there is an urgent need to inject private sector skills and practices into the business of government. However, the policy of replacing just the top man at MoD Abbey Wood with someone from a private sector background, in the expectation that the commercial acumen he brings will “rub off” onto people around him has not worked at all, nor has it delivered dramatic improvements in efficiency hoped for, and demanded by the political elite. What is urgently needed is injection of tried-and-tested private sector skills not only at the top, but right down every level of the hierarchy at MoD Abbey Wood – but especially at the coal-face level, where it matters most, in numbers large enough to make a tangible difference to performance outcomes. In addition, this top man should be given the power to choose lower-tier post holders ‘in his own image’ (as well as releasing the existing lot) so that he can assemble a delivery-orientated management team which is focused solely on results. @JagPatel3

http://www.conservativehome.com/ : Morgan Schondelmeier: State-directed research is no substitute for the marketplace of ideas

Fri, 14 Aug 2020 14:34:42 +0000

The UK government has committed itself to increasing its investment in research & development to 2.4% of GDP by 2027 which places ARPA, the UK’s version of DARPA, the brainchild of the Prime Minister’s special adviser Dominic Cummings, at the forefront of any new research and innovation funding that is likely to be disbursed. Whereas it is reasonable to expect the State to fund early, high-risk research work into the technologies that will power tomorrow’s economy, there should be a mandatory requirement for its private sector partners to also make a contribution – chief among them is the defence industry. Whereas new-economy tech firms have been putting significant amounts of their own money into research & development, innovation and creation of intellectual property in recent years, old-economy oligopolists like defence contractors are doing no such thing. And yet they say that they want to work with government, but don’t want to rely upon it. But the fact of the matter is that they are entirely dependent on taxpayers’ money for their very existence. Recognising the crucial link between R&D, productivity and competitiveness in this important sector of the UK’s manufacturing base, the government makes the following observation (on page 13) of its Defence Industrial Policy published in December 2017: “Industrial investment in defence research and development has declined markedly since the early 1990s, blunting productivity, competitiveness and innovation in the defence sector; government and industry have a mutual responsibility to reverse this trend. Where we can, we are acting to nurture competition in the defence market and throughout the capability life-cycle, supporting productivity, while strengthening our dialogue with industry about the challenges and needs of modern defence to ensure effective investment.” For some years now, defence contractors have repeatedly expressed their eagerness to invest private sector investment capital in MoD equipment procurement programmes, provided MoD reveals more information about its spending plans. Yet, defence contractors’ behaviour is contrary to declarations of intent made in public because they have been found to be hoarding mountains of cash clandestinely and then sitting on it, instead of using it to fund in-house R&D to gain a competitive advantage, boost productivity and ready off-the-shelf products – by advancing the developmental status of their staring-points for the technical solution from its existing condition, to a point where it will satisfy the qualitative and quantitative requirements expressed in the invitation to tender, which will also serve to ease the burden on MoD’s equipment budget. This amounts to duplicitous behaviour – saying one thing and doing the exact opposite! The nub of the problem is that defence contractors’ business model is founded on lies and deception; perpetrated by the few upon the unsuspecting many – governments, shareholders, Members of Parliament, employees, academics, the military, supply chain partners, journalists and the wider community – over several decades. Not a shred of honest intent is to be detected anywhere. An innovative proposal on how to elicit private sector investment capital into defence procurement programmes is set out in a written submission to the Public Accounts Committee of the UK Parliament which has just completed its inquiry into “Defence Capability and the Equipment Plan 2019-29”. The pdf copy of this paper can be downloaded from: https://committees.parliament.uk/writtenevidence/... @JagPatel3

http://www.conservativehome.com/ : Tory MPs, Downing Street and the Treasury are poised to clash over plans to cut the army to 60,000.

Tue, 21 Jul 2020 08:22:48 +0000

In the face of entrenched, powerful vested interests, a conservative Defence Secretary has for the first time found the courage to talk about what has gone wrong with defence procurement – the total lack of competition in the acquisition of military equipment. Speaking at a fringe meeting hosted by ConservativeHome during the Conservative Party conference, Ben Wallace said that: “It was embarrassing when our troops have ended up with very bad build quality equipment because domestic suppliers have been shielded from competition.” Competition is the essence of enterprise and free market capitalism. For an economic model that relies on casual interactions between buyers and sellers and seeks to deliver goods and services to everyone at a price they are willing to pay, vigorous competition among vendors on the basis of a level playing field is absolutely essential. In markets in which the government is the main or only customer, it is the responsible duty of government to apply the instrument of fair and open competition to select the private sector player who will be awarded the contract to supply goods and services for public use. How it goes about applying the competition process to achieve its policy objectives is a matter entirely for government – it cannot be outsourced to outsiders. Indeed, in its latest policy statement on defence procurement expressed in the Defence Industrial Policy, the government makes it absolutely clear that military equipment is to be procured through fair and open competition – the only exceptions being off-the-shelf purchases and single-source development contracts, the latter to be handed-out on a preferential basis (to the Select Few). However, instead of facilitating a competitive market in defence goods and services, governments of all persuasions over the last several decades have succeeded only in presiding over market failure in defence procurement. This government has admitted as much. Indeed, the government is very frank in its DIP, where it says (on page 23): “Competitive tension is the greatest driver for innovation, productivity and earning power in any economy. It is our policy to develop and foster competition, and to preserve strategic choice in the market, including over the longer term. There are, nevertheless, particular challenges and constraints in doing this, causing various levels of market failure in defence procurement.” What’s more, in the very next sentence, the government comes clean and acknowledges that 42% of new MoD contracts by value were placed via open competition in 2016/17, down from 64% in 2010/11 – which leads one to conclude that the trend is towards more of the same. So, it seems that less and less use is being made of the market-based instrument of fair and open competition – notwithstanding its role at the very heart of the government’s policy on defence procurement. There is a suspicion that senior executives seconded from the defence industry and embedded within MoD, who remain in the pay of their employers, may have exercised their maligned influence to interfere with implementation of policy to serve their narrow commercial interests. Or is this a clear-cut case of the senior civil servants subverting the will of the party of government, and policy set by Ministers? What Trump calls the “deep state” which is out to frustrate his administration. One thing is for certain – there is reluctance on the part of some people in the pay of the State in leadership roles to use the instrument of competition as a tool, because it creates winners and losers – reflecting their deep-seated socialist tendencies. It would explain why the defence industry has failed so miserably to deliver equipment which is fit for purpose, adequately sustained in-service and constitutes value for money through-life. @JagPatel3

http://www.conservativehome.com/ : Johnson prepares for his new Prime Minister's department

Sun, 19 Jul 2020 09:46:16 +0000

In his blogpost earlier this year, Dominic Cummings tells it exactly how it is: “The Whitehall procurement system is embedded in the dominant framework of EU law (the EU law is bad but UK officials have made it worse). It is complex, slow and wasteful. It hugely favours large established companies with powerful political connections — true corporate looters … It is horrific for SMEs to navigate and few can afford even to try to participate. The officials in charge of multi-billion processes are mostly mediocre, often appalling. In the MoD corruption adds to the problems.” To spread prosperity around, it is government policy to widen the participation of SMEs, specifically, it is committed to spending 33% of the central government procurement budget on SMEs by 2022, either directly or indirectly via its top-tier contractors. The target for MoD, which spends about £15bn a year on procuring new military equipment, is a modest 25%. The clear message behind the government’s defence procurement policy is that equipment is to be purchased through fair and open competition – the only exceptions being off-the-shelf purchases and single-source development contracts, the latter to be handed out on a preferential basis (to the Select Few). By handing out taxpayer-funded contracts in this way, MoD has shown leadership and set an example by inadvertently directing prime contractors to adopt the same method of hand picking their first-tier supply chain partners, for each dissected workshare part of their evolving technical solutions. But unlike MoD, which has been disbursing such contracts on national security grounds, prime contractors have been using the tried-and-tested old boys’ network to choose their first-tier subcontractors, usually during a gathering at the 19th Hole limited to the great-and-the-good from subsidiary companies wholly-owned by the prime contractor, or some other favoured, old school-tie chums – which has allowed corrupt activities, characterised by artificially inflated subcontract prices and the obligatory kickbacks that go with them to flourish. It is the stupid act of disclosing the budgeted expenditure figure in the invitation to tender that has given prime contractors the opportunity to “divvy up” this money in the same way as they dissected the technical solution into its workshare parts, thereby offering leeway for discretionary payments. By its very nature, this type of clandestine activity in the defence industrial supply chain is very difficult to unearth, because the extremely small number of people right at the top who benefit from it will go out of their way to keep it under wraps, citing the excuse of commercial confidentiality whilst skilfully covering their tracks. It is truly a bizarre situation, where the buyer tells the seller (confidentially) the price level at which he should pitch at, so that they can both profit. A scenario which can only occur on government-funded contracts – only because public servants are asleep at the wheel! But what is especially disturbing about this epic story of bribery and corruption is that, it is instigated and perpetuated by people who were previously in the pay of the State – given that the workforce on defence contractors’ premises, large or small, is made-up entirely of former public servants who came across in overwhelming numbers, via the ‘revolving door’ to pursue a second career in the private sector. What’s more, MoD’s green lighting of this practice has prompted first-tier subcontractors to also select their lower-tier suppliers in the same manner, paving the way for the entire defence industrial supply chain to be corrupted, right down to the lowest level of piece-part & component manufacturers. @JagPatel3

http://www.conservativehome.com/ : What the abolition of DfID tells us about the war on Civil Service generalists

Sat, 18 Jul 2020 06:34:18 +0000

During this unprecedented public health emergency, Whitehall has been forced to call in management consultants because the civil service, famously led by generalists, has failed in its administrative functions. The good news is that the Prime Minister’s chief adviser, Dominic Cummings, has already recognised that there is an urgent need to bring back a sense of purpose and mission to the civil service and to this end, he has set out his ideas on how to go about doing exactly that. Thanks to his blogposts, his views on policy priorities and governance are well known. He wants to repurpose the machinery of government to make it more responsive to the wants, needs and expectations of ordinary citizens and the left-behind – as opposed to serving the interests of big business, financiers and those who shout loudest in the corridors of power. The so-called “levelling up” agenda. In particular, he wants to make the massive central government procurement programme more efficient at delivering what the civil service has contracted for – that is to say, purchasing of goods, services and labour from the private sector to the tune of £284bn per year. But there is a major hurdle getting in the way of this aspiration. It is the civil service. The government’s much heralded Industrial Strategy finds that the skills and capabilities of those employed in the private sector need upgrading, if the UK is to realise its vision of a Global Britain and pay its way in the world, post-Brexit. But there is no recognition that people in the pay of the State – the other party to this Industrial Strategy, on whom its success is wholly dependent – are equally ill-equipped for their public sector roles. This lack of acknowledgment is not a surprise. The Industrial Strategy was, after all, written by people in the pay of the State! It would explain why there is very little confidence in the ability of big government to fix market failures, use the instrument of regulation to curb anti-competitive behaviour, manage outsourced public service contracts or secure value for money for investments made in infrastructure. Indeed, the reputation of people in the pay of the State is further diminished by the fact that their ability to innovate, solve problems, learn from past mistakes and adapt to change, which is a distinctive characteristic of people in the private sector, has been erased in the public sector due to incessant conditioning of the mind from an early age. And, of course, people in the pay of the State are very good at talking a “big game” but they can’t “do it”. But, what is especially worrying about people in the pay of the State is that they haven’t got a clue about what it is that drives the behaviour of for-profit organisations in the free market – not least, because they have not spent a single day of their lives in the private sector – and yet, they have been put in charge of spending taxpayers’ money to buy goods, services and labour from non-public sector organisations. Worse still, in specialised markets such as that in military equipment for the Armed Forces, the role of the regulatory authority and sponsoring agency has been combined in one department of state – the Ministry of Defence – which means that the independent scrutiny function, free from political interference, is non-existent. So, successful capture of a department of state by the defence industry amounts to taking control over both roles! In no other field of human endeavour are such ill-equipped people allowed to ply their trade as in defence procurement – which would explain why the government has been getting appallingly poor value for money these last several decades. @JagPatel3

http://www.conservativehome.com/ : George Bathurst: We must prize the dead hand of officialdom from our railway network

Fri, 17 Jul 2020 11:42:33 +0000

Competition is the essence of enterprise and free market capitalism. For an economic model that relies on casual interactions between buyers and sellers and seeks to deliver goods and services to everyone at a price they are willing to pay, vigorous competition among vendors on the basis of a level playing field is absolutely essential. This philosophy is as true for the market in defence equipment as it is for the market in consumer goods and services. To this end, the government has made it absolutely clear, time and again, that it would like see the competitiveness of the defence industry improved significantly, both in the domestic market and globally, so that the UK can pay its way in the world post-Brexit. But the reason why this constant badgering is not yielding any results is that defence contractors, on whom the government has become totally reliant for all its military equipment needs, are competition-averse – not least, because they are staffed (from the very top to the bottom) by people who were previously in the pay of the State where they never had to face any competition and consequently, have no experience whatsoever of what it is like to ‘feel the heat’ of competitive market forces. This total dominance of the payroll has come about because the last several decades has seen the transfer of tens of thousands of people in the pay of the State to the private sector via the ‘revolving door’, largely due to the resounding success of the policy instituted by Defence Secretaries of all political persuasions – to encourage for-profit organisations in receipt of government defence contracts to take-on people who were previously in the pay of the State. This mass migration would explain why the workforce, at every level of the hierarchy within defence contractors’ organisations (right across the full spectrum of defence engineering businesses, government outsourcing contractors and foreign-owned entities, large and small) is now made-up entirely of people who were previously in the pay of the State. To add to this blunder, the government is inviting precisely this sort of people into its policy-making forums in Whitehall to try to get a handle on what has gone wrong with defence procurement, because its own civil servants are not up to the job. So, it will come as no surprise that these outsiders, seconded from the defence industry and treated as ‘one of us’ will never bring themselves to prescribe more competition as the medicine to the ills suffered by defence equipment manufacturers. And yet, the government’s default policy is to procure military equipment for the Armed Forces through fair and open competition. It confirms this stance in its most recent policy statement on defence procurement expressed in the Defence Industrial Policy published in December 2017, where it says (on page 23): “We strive to provide our Armed Forces with the capabilities they need at the best value for money, obtaining this through open competition in the global market, wherever possible. Competitive tension is the greatest driver for innovation, productivity and earning power in any economy.” However, those lower-down the hierarchy underneath the governing elite who are hostile to competitive markets have fought tooth and nail to prevent this policy from being implemented fully, which would explain why only 42% of new MoD contracts by value were placed via open competition in 2016/17, down from 64% in 2010/11. Reinforced by fierce opposition from vested interests outside Whitehall, there seems little chance of it being applied anytime soon. So long as defence contractors carry on with the practice of recruiting only people who were previously in the pay of the State, they will continue to be competition-averse. @JagPatel3

http://www.conservativehome.com/ : Jesse Norman: My revolutionary experiment with other Ministers today in delivering better value for

Thu, 16 Jul 2020 10:04:40 +0000

Thirty-six years after the then Secretary of State for Defence, Michael Heseltine was persuaded to call-in the National Audit Office to examine the delivery performance of major defence equipment projects, MoD has still not tackled the deep-seated problems that continue to afflict the existing, flawed procurement process. During his ten-year term as Comptroller and Auditor General completed last summer, Sir Amyas Morse had a ringside view of the inner workings of government. To this end, he is well-qualified to say that policymakers in Whitehall keep making the same mistakes over and over again, because they have failed to learn from past errors. In the last Parliament, the Public Administration and Constitutional Affairs Committee held an inquiry into the Government’s Management of Major Projects, to find out how these projects are being managed. As part of the inquiry, PACAC heard evidence from Sir Amyas Morse, who led NAO audits of government departments on behalf of Parliament. He found that people managing such projects keep making the same mistakes over and over again, like for instance, revealing how much the government is going to spend on a particular public works programme, right at the outset. He says that, in so doing, the government “loses a lot of negotiating leverage with the people it might contract with”. There are signs that the government is learning from blunders like these. For the last several decades, successive Secretaries of State for Defence have sanctioned the practice of disclosing publicly, the budget set aside for the procurement of new military equipment for the Armed Forces, both to Parliament and in the invitation to tender released to defence contractors. However, in a major reversal of policy, this government is now refusing to reveal the total budgeted expenditure figure or associated year-on-year financial funding profile, on the grounds that to make the such cost estimates public would be prejudicial to the commercial interests of MoD. This is because hitherto, defence contractors have taken this information as an indication of how much MoD can afford and responded accordingly – by simply taking a commercial decision to price their proposals to match this figure, instead of working out what it will actually cost to execute the Programme of Work to bridge the shortfall between the starting-point for their technical solutions and the requirement – which is what it ought to be! See this illustration pic.twitter.com/wP25sESOIw. Quoting identical bottom-line selling prices in this way amounts to price-fixing on a grand scale, with the active connivance of the Secretary of State for Defence. See this illustration pic.twitter.com/BQV4KUgdNg. What’s more, MoD’s Project Team Leader at Abbey Wood, Bristol has been denied the opportunity to choose the single preferred Contractor on the basis of price competitiveness, and therefore value for money. The narcissistic tendency of self-serving politicians wanting to capture the headlines for the sole purpose of elevating their profile in the media and attracting plaudits from the wider party membership is what has caused them to act in this reckless manner – which, ironically, has only served to wrongfoot their own side whilst delighting producer interests. Now that the government has seen the error of its ways and made amends, the question arises – how long has this been going on and what was the reason behind it surviving this far? @JagPatel3

http://www.conservativehome.com/ : James Wild: The security, defence and foreign policy review is underway. We cannot afford to duck, d

Tue, 14 Jul 2020 06:17:29 +0000

For decades, MoD has treated its forward Equipment Plan – the list of new defence equipment it intends to procure in the years ahead – as its crown jewels, to be protected from outside interference at all costs. So, it comes as no surprise that it has survived unscathed through numerous recessions, funding crises and spending cuts. However, the Covid-19 pandemic has seen this latest crisis elevated to an entirely new level which has caused an unprecedented double-digit drop in the UK’s GDP in a matter of weeks. As a consequence, it is likely that the Integrated Review will recommend a cut of up to £4bn in the defence budget to fulfil a commitment made by the Cameron-led government to fix defence spending at 2% of GDP. Given that more than 40% of the defence budget is currently spent on procuring and sustaining military equipment in-service, it is anticipated that this time the Equipment Plan will not escape being a target for cuts. But it doesn’t have to be that way. If the Equipment Plan is to continue to remain sacrosanct, there is an alternative to de-scoping, deferring or deleting projects from the list – eliciting private sector investment capital into each equipment procurement programme. Not only will this new source of funding relieve the burden on MoD’s finances, but it will also preserve the integrity of the Equipment Plan. It is called the private sector for a reason – so that it can use private sector funds, not public sector subsidy to innovate, grow, create jobs and make a profit. Notwithstanding this statement to be self-evidently true, there is no evidence that MoD’s long-standing policy of securing input of private sector investment capital into defence equipment programmes is being applied, which means that they continue to be funded exclusively by the taxpayer. Defence contractors have long claimed that they are investing their own funds into defence equipment programmes, but no one has been able to provide any evidence to prove this assertion, including the Defence Secretary – and yet, he is the one who initiated the procurement process! In recognising this deficiency, the government has called on the defence industry to play its part too, in this joint endeavour. Indeed, it makes this appeal (on page 32) of its Defence Industrial Policy: “We want to encourage more private venture capital into the defence sector, including from non-traditional defence suppliers. Co-investment (where both industry and Government jointly invest) is commonplace in the civil aerospace and automotive sectors, and we want to see more of this in defence.” After decades of propping up the defence industry with unquestioning support, the government is realistic in its aims and recognises that the private sector will not willingly put forward, or risk its own money. Nevertheless, it has concluded that industry’s appetite for self-funding will be boosted only when the instrument of competition is applied more rigorously. The advent of the multiple-phase, winner-takes-all competition allows the government to do exactly that – namely, it is now possible to use competition as a tool to elicit input of private sector capital into each phase of MoD equipment procurement programmes. It is very well having an agreed policy on private sector investment in place, but the problem for people in the pay of the State is how to go about implementing this policy. An innovative proposal on how to elicit private sector investment capital into defence procurement programmes is set out in a written submission to the Public Accounts Committee which is currently conducting its inquiry into Defence Capability and the Equipment Plan 2019-29. It can be accessed via this link: https://committees.parliament.uk/writtenevidence/... @JagPatel3

http://www.conservativehome.com/ : Greg Hands: Now that Britain has left the EU, Conservatives must support free trade

Tue, 4 Feb 2020 09:12:14 +0000

Competition is the essence of enterprise and free market capitalism. In Adam Smith’s use, the “free market” is not a market free from government, but one that is free from rents – these rents include distortions borne of market power, privileged access and position. It is therefore heartening to learn that senior members of this government, including the Prime Minister, are self-confessed free marketeers and are willing to go out of their way to praise the virtues of the market over the State at every opportunity. The central tenet of capitalism is that those participating in it do so in the expectation that they will profit from their own labour and initiative. Yet, the last several years has seen the widespread belief that individuals at the top of big business and corporate houses are benefiting at the expense of their customers, employees, supply chain partners and the local community. The post-second world war experience has repeatedly vindicated the view that the single most powerful driver of prosperity is profit-seeking businesses trading within a law-governed and competitive market economy. However, in the new millennium, the recently exposed frailties of capitalism are all too evident in markets in which the government is the main or only customer, which happen to be some the most closed in the world, with significant barriers to entry. In the UK, the government spends £292 billion of taxpayers’ money each year to purchase goods, services and labour from the private sector, making it quite easily the single largest buyer. The problem with markets in which the government is the only customer is the endless subsidies handed out to incumbent businesses, which insulates them from being usurped by agile and innovative start-ups, thereby preventing wealth being spread about. This is further complicated by the fact that, such markets are highly susceptible to cronyism – the nexus between the governing elite and the business elite that contrives to put the interests of business first, ahead of the wants, needs and expectations of ordinary citizens. Not least, because the twin evils of lobbying and corruption rear their ugly heads every time taxpayers’ money crosses the boundary between the public sector and the private sector. It is, as the economist Randall Holcombe puts in his book “Political Capitalism” a “system in which the economic and political elite cooperate for their mutual benefit.” The political elite tilt the economic playing field in favour of the economic elite, privileging them through subsidies, regulatory protections and targeted tax breaks. In exchange, the economic elite then help to ensure that the political elite remain in power. The rest of us pay the bill for this quid pro quo through higher taxes, higher prices, and a less efficient, less dynamic economy. As the UK looks outwards, there is a fear among free marketeers that uncompetitive businesses will intensify their lobbying efforts during the transition period, to shield themselves from being exposed to foreign competition. @JagPatel3

http://www.conservativehome.com/ : Ben Brittain: Get Brexit Done and innovate like Israel

Mon, 30 Dec 2019 07:33:04 +0000

Competition is the essence of enterprise and free market capitalism. For an economic model that relies on casual interactions between buyers and sellers and seeks to deliver goods and services to everyone at a price they are willing to pay, genuine competition among vendors on the basis of a level playing field is absolutely essential. Time and again, this conservative government has made it absolutely clear that it would like see the competitiveness of the defence industry improved significantly, both in the domestic market and globally, so that the UK can pay its way in the world, post-Brexit. To this end, it has abandoned the tried-and-failed policy of talking and cajoling to try to convince the big defence contractors to become more competitive. Instead, the government has adopted a radically different approach. It is now seeking to accommodate additional participants in the UK defence equipment market, both at prime contractor level and right down the extended supply chain – by attracting foreign defence contractors to take up the slack at the top and indigenous engineering businesses from adjacent sectors who have not previously engaged with MoD, elsewhere in this highly lucrative market. Indeed, in its latest policy statement on defence procurement expressed in the Defence Industrial Policy published in December 2017, the government says (on page 24): “Competition and innovation are mutually reinforcing. SMEs and non-traditional suppliers, alongside universities, are the bedrock of British innovation. We are committed to make it easier for them to do business with defence ……..” But the real reason why the government wants to widen the diversity of defence equipment suppliers is because it wants to be released from the suffocating embrace of the cabal of usual suspects, the Select Few, who have monopolised the military equipment market for as long as anyone can remember. Indeed, this is confirmed by statistical data cited by a recent House of Commons Library Briefing Paper which reveals that a few big contractors dominate the UK defence industry landscape today. In fact, over 42% of MoD expenditure on defence procurement for 2017-2018, amounting to over £15 billion was spent on just ten suppliers, with this market share remaining pretty much the same over the last decade. It is hard not to conclude that this stranglehold by the Select Few has been the cause of poor performance hitherto – characterised by persistent delays, cost overruns and chronically weak export performance. The government also knows that by opening-up the defence equipment market to all and sundry, there is every chance that standout performers from the civilian arena – businesses that do real, proper engineering as their core activity (using professionally-qualified people from a wide variety of backgrounds and disciplines) – will be attracted to this highly lucrative market, bringing with them strict standards of ethical behaviour, a culture that nurtures the get-it-right-first-time philosophy and an export-orientated outlook. These newcomers view taking part in competitions as a natural order of things and treat it as a challenge, to take market share from incumbents. They are also used to raising private capital from the financial markets for the purpose of investing in innovation, product research and development, creating intellectual property and upskilling employees. But the greatest benefit to be derived from displacing the Select Few is that the standards of workmanship on defence contracts will be elevated to the level exhibited by the UK’s high-performing, best-in-class manufacturing businesses which are more likely to deliver value for money, and with it, lessen the burden on the Exchequer. @JagPatel3

http://www.conservativehome.com/ : Julian Brazier: So Downing Street wants to tackle defence procurement. Here are five ways in which i

Wed, 18 Dec 2019 08:31:43 +0000

One of the reasons given by people who want the government to carry-on with the practice of handing out uncontested, single-source development contracts to UK-based defence contractors is that an indigenous engineering design, development, systems integration, prototyping and testing capability will be cultivated and maintained in-country, in perpetuity. But the fact of the matter is that the defence sector in the UK has already lost such a capability. It went many years ago. This is because the last several decades has seen the transfer of thousands of people in the pay of the State to the private sector via the ‘revolving door’, in particular, defence equipment manufacturers’ organisations, largely due to the resounding success of the policy instituted by Defence Secretaries of all political persuasions – to encourage for-profit organisations in receipt of government defence contracts to take-on people who were previously in the pay of the State. This mass migration would explain why the workforce, at every level of the hierarchy within defence contractors’ organisations (right across the full spectrum of defence engineering businesses, government outsourcing contractors and foreign-owned entities, large and small) is now made-up entirely of people who were previously in the pay of the State. Whereas this targeted action has done much to alleviate the problem of high joblessness among those who had completed their terms as public servants, it has only served to deprive defence contractors of the ability to design & develop new military equipment to a user-specified technical specification requirement. This is due to the fact those who have come across from the public sector, in their middle-age (armed with a full government pension), have no experience whatsoever of advancing the developmental status of the starting-point for a technical solution from its existing condition, to a point where it will satisfy the qualitative and quantitative requirements expressed in the technical specification requirement – not least, because they were never required to do so, during the first half of their career. In fact, such expertise is the sole preserve of people who were inducted into the private sector at an early age, where they honed their design & development skills within the crucible of a competitive market environment and a setting driven by the profit motive and winning mindset. It also required, as a minimum, an adequate understanding of what it takes (in terms of skill types, funding, tools, processes, materials, scheduled work plan, inter-business contractual agreements etc.) to advance an immature technical solution from its existing condition. As a consequence, these types of people are to be found exclusively in the non-defence, engineering sector of the UK economy today. The most important feature of any business that calls itself an engineering company is the existence of an in-house design, development, systems integration, prototyping and testing as a core capability. By employing only people who were previously in the pay of the State, UK-based defence contractors have inadvertently forsaken this capability – which has ironically, left them at risk of being usurped and displaced by real engineering companies from adjacent sectors or outside the UK, who have made it their foremost priority to invest in such a foundational capability. The complete absence of any new patent applications, IP rights or innovative products put forward by UK-based defence contractors is yet another indication of the paucity of such a capability. It would also explain, in part, the persistent instances of delays and cost overruns on equipment development programmes – brought about by contractors not possessing suitably experienced and talented engineers, problem-solvers, innovators and doers on their payroll, right at the start of an equipment procurement contract. @JagPatel3

http://www.conservativehome.com/ : Richard Patient: At last, the Conservatives have realised that the CBI is the voice of big business,

Tue, 19 Nov 2019 07:55:42 +0000

The determined pursuit of Brexit leads one to believe that the Conservative party is no longer the party of business, but a party wedded to a pro-market, pro-competition philosophy. The post-second world war experience has repeatedly vindicated the view that the single most powerful driver of prosperity is profit-seeking businesses trading within a law-governed and competitive market environment. However, in the new millennium, the recently exposed frailties of capitalism are all too evident in markets in which the government is the main or only customer, which happen to be some the most closed in the world with significant barriers to entry. In the UK, the government spends £292 billion of taxpayers’ money each year to purchase goods, services and labour from the Private Sector, making it quite easily the largest single buyer. The problem with markets in which the government is the only customer is the endless subsidies handed out to incumbent businesses, which insulates them from being usurped by agile and innovative start-ups, thereby preventing wealth being spread about. This is further complicated by the fact that, such markets are highly susceptible to cronyism – the nexus between the governing elite and the business elite that contrives to put the interests of business first, at the expense of the wants, needs and expectations of ordinary citizens. Not least, because the twin evils of lobbying and corruption rear their ugly heads every time taxpayers’ money crosses the boundary between the Public Sector and the Private Sector. It is, as the economist Randall Holcombe puts in his book "Political Capitalism" a “system in which the economic and political elite cooperate for their mutual benefit.” The political elite tilt the economic playing field in favour of the economic elite, privileging them through subsidies, regulatory protections and targeted tax breaks. In exchange, the economic elite then help to ensure that the political elite remain in power. The rest of us pay the bill for this quid pro quo through higher taxes, higher prices, and a less efficient, less dynamic economy. @JagPatel3

http://www.conservativehome.com/ : Mark Harper: If the Conservative Party is not the party of sound money, then what on earth are we fo

Mon, 8 Jul 2019 10:03:50 +0000

This country is in a sorry place when the two leadership contenders for the office at 10 Downing Street which carries the title of Prime Minster and First Lord of the Treasury sound like old-fashioned, tax-and-spend socialists trying to outdo the leader of the opposition and his kind. They should be reminded of the words of the current Chancellor of the Exchequer who said these words in March 2017: “We need to maintain our commitment to fiscal discipline and to strengthen our economic position and ensure we get back to living within our means. That requires us to stick to the plan I set out in November to maintain the trajectory of reducing borrowing so that we don’t pass on our debts to future generations”. The principles of sound fiscal management require that governments put their economic security first, and balance their books at the earliest possible time. The fact of the matter is that the urgent task of paying down the UK’s national debt – which currently stands at £1,780 billion, and rising – can only begin after the budget deficit of £25 billion (the gap between government income and expenditure) has been cut down to zero, not before. It’s never too late to begin to do that. In 2010, the incoming coalition government led by David Cameron did the right thing and put the national interest first, by making it a priority to balance its books. Today, it has given this Chancellor of the Exchequer the maximum amount of freedom to deal with, not only the national debt, but also the immediate fallout from Brexit. @JagPatel3

http://www.conservativehome.com/ : Penny Mordaunt: It's time for servant leadership that will listen to the people

Thu, 30 May 2019 08:18:34 +0000

Talking of failed leadership, it is instructive to look at the recent history of defence procurement in the UK – so that people can understand and appreciate the reasons why the new Defence Secretary’s department is in such a financial mess right now. Such was the intense focus of attention and diversion of resources onto examining alternative management models for MoD’s arms-length defence procurement organisation at Abbey Wood during the 2010-2015 Parliament that, the urgent need for the existing, flawed procurement process to be replaced by a new acquisition policy which deals with the usual delays and cost overruns, was completely ignored by the then coalition Government. The main reason why the Government went down the GOCO route (the so-called Government-Owned, Contractor-Operated governance model) is because it was deemed not to have the necessary skills in-house, to undertake its procurement duties with confidence, and was accordingly persuaded to outsource this role to the Private Sector instead. However, the inability of the Government to find and install a Private Sector operator to run MoD Abbey Wood on a for-profit basis has left it in the worst possible situation – the status quo – which guarantees ongoing failure on defence equipment procurement programmes. Indeed, the quality of management skills in the Public Sector is so poor that there is not a single person in the pay of the State who is equipped with the necessary blend of leadership/communication skills, specialist knowledge, cross-discipline expertise or prior experience to, not only correctly identify the deep-seated problems associated with the existing procurement process but also come up with simple, workable, easy-to-apply solutions which will tackle these shortcomings – yet, it is the responsibility of Government to shape, and then implement acquisition policy which will deliver equipment to the Armed Forces that is fit for purpose, adequately sustained in-service and constitutes value for money through-life. This lack of leadership talent and management capability in Whitehall would explain why there is a massive void in defence procurement policy. In response to this deficiency, the governing elite has concluded that there is an urgent need to inject Private Sector skills and practices into the business of Government. However, the policy of replacing just the top man at MoD Abbey Wood with someone from a Private Sector background, in the expectation that the commercial acumen he brings will ‘rub off’ onto people around him has not worked at all, nor has it delivered dramatic improvements in efficiency hoped for, and demanded by the political elite. What is urgently needed is injection of tried-and-tested Private Sector skills not only at the top, but right down every level of the hierarchy at MoD Abbey Wood – but especially at the coal-face level, where it matters most, in numbers large enough to make a tangible difference to performance outcomes. In addition, this top man should be given the power to choose lower-tier post holders ‘in his own image’ (as well as releasing the existing lot) so that he/she can assemble a delivery-orientated management team which is focused solely on results. @JagPatel3

http://www.conservativehome.com/ : The most pro-intervention speech by a Defence Secretary since the Iraq War

Wed, 13 Feb 2019 08:52:54 +0000

The principles of sound fiscal management require that governments put their economic security first, and balance their books at the earliest possible time. When it comes to procuring defence equipment, the government has no option but to rely on the Private Sector, because it no longer has the ability to produce military equipment – as it used to do. This is because the means of defence production, distribution and exchange is now exclusively in the hands of private interests, that is to say, the State is entirely dependent on for-profit organisations for the design, development, manufacture and delivery of new military equipment to the Armed Forces. Consequently, the government has become reliant on the Private Sector for all its military equipment needs, including its subsequent upkeep, when in-service with the user. The harsh reality is that, no department of state in Whitehall is as dependent on the Private Sector, as is MoD. Likewise, these private interests are completely hooked on a steady flow of taxpayer funds for their very existence. Consequently, as the only customer of defence equipment, the government is in a powerful position to dictate the terms of trade. But it has failed to leverage this enormous purchasing power to its advantage. The main reason for this failure is that people in Whitehall have little or no understanding of the forces at work and commercial pressures that exist within for-profit organisations which are ready to be harnessed for the benefit of taxpayers – not least, because they have not spent a single day of their lives in the Private Sector – and yet, they have been put in charge of spending taxpayers’ money to the tune of £15 billion per year to buy defence equipment, outsourced services and labour from the Private Sector. What’s more, the judgements made by these people, as it relates to the expenditure of public funds, are distorted by the fact that they will end up in the Private Sector to pursue a second career, later on. So, it comes as no surprise that MoD employees are, without exception, favourably disposed towards the defence industry because they are completely dependent on it for their subsequent career choices (via the revolving door), when their time in public service comes to an end, or their employment contract is terminated abruptly by political edict because they have been found wanting. Indeed, it is very hard to find anyone at MoD who will aggressively defend taxpayers’ interests, once they have enjoyed a cosy relationship with defence contractors. This mass migration would explain why staff on defence contractors’ payroll is made-up entirely of people who were previously in the pay of the State. Defence contractors may very well call themselves public companies and have their shares quoted on the stock market, but they really are Private Sector organisations in name only, not least, because they are ‘created in the image’ of public sector institutions like MoD Abbey Wood (warts ’n all) displaying all the tell-tale features of: a workforce made-up entirely of people who were previously in the pay of the State (where they developed an unhealthy penchant for rules, regulations and processes), who have succeeded in transplanting a work culture characterised by failed practices of management by committee & PowerPoint presentations, and groupthink that disallows external challenge. What’s more, instead doing the right thing and educating people in the pay of the State about the ways of the Private Sector, these new arrivals (in association with those who have gone before) then set about exploiting the ignorance of their former colleagues in government, for one purpose only – relieving them of taxpayers’ money – which has, in itself, left the public finances in pretty bad shape. @JagPatel3

http://www.conservativehome.com/ : Howard Flight: Finding taxpayers better value for money

Mon, 7 Jan 2019 11:42:01 +0000

Nowhere is there a greater need for taxpayer value as in the acquisition of military equipment. When it comes to procuring defence equipment, the government has no option but to rely on the Private Sector, because it no longer has the ability to produce military equipment – as it used to do. This is because the means of defence production, distribution and exchange is now exclusively in the hands of private interests, that is to say, the State is entirely dependent on for-profit organisations for the design, development, manufacture and delivery of new military equipment to the Armed Forces. Consequently, the government has become reliant on the Private Sector for all its military equipment needs, including its subsequent upkeep, when in-service with the user. The harsh reality is that, no department of state in Whitehall is as dependent on the Private Sector, as is MoD. Likewise, these private interests are completely hooked on a steady flow of taxpayer funds for their very existence. Consequently, as the only customer of defence equipment, the government is in a powerful position to dictate the terms of trade. But it has failed to leverage this enormous purchasing power to its advantage. The main reason for this failure is that people in Whitehall have little or no understanding of the forces at work and commercial pressures that exist within for-profit organisations which are ready to be harnessed for the benefit of taxpayers – not least, because they have not spent a single day of their lives in the Private Sector – and yet, they have been put in charge of spending taxpayers’ money to the tune of £18 billion per annum to buy defence equipment, outsourced services and labour from the Private Sector. What’s more, the judgements made by these people, as it relates to the expenditure of public funds, are distorted by the fact that they will end up in the Private Sector to pursue a second career, later on. So, it comes as no surprise that MoD employees are, without exception, favourably disposed towards the defence industry because they are completely dependent on it for their subsequent career choices, when their time in public service comes to an end, or their employment contract is terminated abruptly by political edict because they have been found wanting. Indeed, it is very hard to find anyone at MoD who will aggressively defend taxpayers’ interests, once they have enjoyed a cosy relationship with defence contractors. This mass migration would explain why staff on defence contractors’ payroll is made-up entirely of people who were previously in the pay of the State. Defence contractors may very well call themselves public companies and have their shares quoted on the stock market, but they really are Private Sector organisations in name only, not least, because they are ‘created in the image’ of public sector institutions like MoD Abbey Wood displaying all the tell-tale features of: a workforce made-up entirely of people who were previously in the pay of the State, who have succeeded in transplanting a work culture characterised by failed practices of management by committee and groupthink that disallows external challenge. What’s more, instead doing the right thing and educating people in the pay of the State about the ways of the Private Sector, these new arrivals then set about exploiting the ignorance of their former colleagues in government, for one purpose only – relieving them of taxpayers’ money – which has, in itself, left the public finances in pretty bad shape. There is something very disturbing about people who have previously, as public servants sworn undying allegiance to Her Majesty Queen Elizabeth II, only to then engage in defrauding Her Majesty’s Government of taxpayers’ money on behalf of vested interests.

http://www.conservativehome.com/ : George Freeman: There was much to cheer in the Budget. But now we need an inspiring programme for g

Fri, 2 Nov 2018 07:34:55 +0000

Your observation “Too often, Whitehall’s funding orthodoxy rewards failure” is just so true. At a time when this Government is wrestling with how to deal with the fallout from Brexit, eliminate the budget deficit and pay down the national debt, it cannot afford to subsidise failure in the defence industry any longer. Whereas the foremost priority is to tackle the £20bn funding “black hole” in MoD’s budget, there remains an alternative to withdrawing front-line capabilities, delaying projects or cancelling them altogether – eliciting Private Sector investment capital into each equipment procurement programme. Not only will this new source of funding relieve the burden on MoD’s equipment budget, but it will also preserve the integrity of the rolling 10-year Equipment & Support Plan. Accordingly, each Bidder should be invited to declare that part of the bottom-line Selling Price for the overall programme which is to be paid for, from his own (or third party) funds to advance the developmental status of his starting-point for the Technical Solution – as a separate line item on DEFFORM 47 to enable Abbey Wood Team Leader to make a like-for-like comparison. The more money Bidders put in, the less MoD will have to contribute and the lower the risk that the Team Leader will be censured for exceeding the sanctioned budget. See illustration pic.twitter.com/UIZFTSayqq on how this works. Whereas MoD’s focus on upskilling its existing workforce to a level comparable with counterparts in the defence industry will yield results only in the long term, the policy of eliciting Private Sector funds into defence equipment procurement programmes will have an immediate impact upon HM Treasury’s objective of balancing MoD’s budget this fiscal year, and for the rest of the Parliament. Normal commercial pressures and market forces prevalent within the context of a multiple-phase winner-takes-all competition will, in themselves, persuade defence contractors to take a business decision to voluntarily make a contribution from their own funds, towards the cost of advancing the developmental status of their starting-point for the Technical Solution, to meet the Requirement. It will not even require expenditure of procurement officials’ time, in trying to persuade Bidders to put their own money into defence equipment programmes – saving MoD an enormous amount in overhead costs. Such a feat has not been achieved on any previous equipment acquisition programme for the UK’s Armed Forces, not least, because no one (including the Secretary of State for Defence) has provided convincing evidence of any Private Sector capital invested – instead, this issue has been dominated by lies, disinformation and spin. An added benefit to be derived from compelling Bidders to borrow funds from third parties such as Finance Houses or Private Equity partners to pay for the cost of developing their Technical Solutions is that, the monitoring and scrutinising function will be automatically transferred from MoD to the lending institutions, who are likely to be much more rigorous and demanding regarding day-to-day performance than disengaged, here-today-gone-tomorrow procurement officials – yet another good reason why the headcount at MoD Abbey Wood should be reduced even further! @JagPatel3