Strategic Defence and Security Review

I will not respond to the right hon. Member for Newcastle upon Tyne East (Mr Brown), because I am confident that one or two of my hon. Friends will do so. Instead, I will talk for a few minutes about defence procurement. Twenty-five years ago, I was responsible for carrying out a survey with three colleagues as a management consultant to compare the procurement systems in seven western powers. It is depressing, a quarter of a century on, how little things have moved on from the issues at that time. I remain convinced, as I was at the end of that process, that Britain is about average or a little above average, and not as inefficient as it is presented to be by some commentators. I share the view of the Chairman of the Defence Committee that Bernard Gray is exactly the right man in the right job and that his report is excellent. I am deeply concerned that much of Lord Levene's report will undermine some of Bernard Gray's best and most important ideas, much as I respect the noble Lord and the work that he did in procurement at about the time I was a consultant. There is time to touch briefly on only four points, of which two relate to the procurement function and two to the Ministry of Defence. My first point is that Bernard Gray is absolutely right to point to weaknesses in the contract staff, who are grossly underqualified for the job of stacking up against the highly competent lawyers employed by the other side. In project after project, we have found ourselves badly damaged by the small print. My second point is about project managers. Gray, Levene and everybody else who has looked at this matter have concluded that we need more continuity in project managers and that they need to be professionally trained. Nevertheless, we are out of line with most other countries in concluding that project managers should be civilians. The most efficient procurers in the world remain, in my view, the Swedes. Their project managers are overwhelmingly military. They are in post typically for four to five years and they are properly trained before they become project managers. The problem, particularly on the army side where there are large numbers of comparatively cheap interlocking projects, is that if civilians are in charge of the projects, as in France, one ends up with lots of detailed user-problems that would have become obvious earlier if they had been before a military project manager. That is why France, despite spending far more on research and development than any other continental country, does not have a particularly good record on land vehicles. My third point goes more to the heart of the distinction—in my mind, anyway—between Levene and Gray. The heart of Gray's report—perhaps his single most important recommendation—is at point 4 in his summary, where he says that we must"““Clarify roles and create a real customer-supplier relationship between the capability sponsor (MoD centre)””—" —this is a distinction that we, alone in the whole world, developed before the second world war—"““and project delivery (DE&S)””." He goes on to stress that the Deputy Chief of the Defence Staff (Capability) is the man who has to drive this. In contrast, Peter Levene suggests that DCDS (Capability) should be merged with one, or possibly two, other functions out of a long list—that it should be downgraded—instead of having, as Gray recommends, one board whose secretariat and day-to-day policing should be provided by DCDS (Capability) to oversee the process. In Levene's structure we would end up with a complete muddle, with, in effect, four different bodies considering these matters—the new Defence Board, which is all-civilian except for the Chief of the Defence Staff, and the three armed forces themselves. That would take us halfway back to pre-1936.