MoD: More major Royal Navy, Army and RAF projects delayed and overbudget but data is "good", says expert

Andy Start, Chief Executive of the Defence, Equipment & Support (DE&S) arm of the Ministry of Defence (MoD), made the announcement alongside a panel of experts at a Defence Select Committee meeting on Wednesday (December 17). They were being quizzed about the current financial pressures facing the MoD and armed forces.

The Infrastructure and Projects Authority’s Annual report on Major Projects categories programmes on a traffic light system, analysing how likely it is that they will be completed on time and to budget. The previous 2022-2023 report outlined issues with many armed forces projects across the Royal Navy, British Army and RAF.

Projects are graded green, amber, red and grey (exempt). The previous report said a red grade means a programme has “major issues” over schedule, budgets and quality, and states a scheme’s successful delivery needs “re-scoping”. Describing the amber category, the report said “successful delivery appears feasible but significant issues already exist, requiring management attention,” adding that these problems are considered “resolvable” if they are “addressed promptly”.

The latest report is yet to be published, but the experts declared some of the statistics to the committee. When asked about the findings by Emma Lewell-Buck, Labour MP for South Shields, Lieutenant General Sir Robert Magowan KCB CBE said: “There were five declared reds in March 2023, and we are predicting against those declared, that this will go to seven.”

Mr Start added that there was a slight decrease in amber projects by one, as a balancing figure due to less programmes being worked on, with “greens being broadly the same”. “Globally, we are going through some extraordinary dynamics across the automotive, aerospace and defence sectors,” he said.

“Those dynamics are affecting skills and supply chain very significantly, and that’s knocking on to the delivery of all big programmes across all sectors globally.” He added: “In Covid, there was a dramatic reduction in the aerospace industry and capacity, as it was a matter of business survival. This was also true in automotive. A lot of factories were shut and a lot of talent, particularly those close to retirement, moved out of the sector. During Covid, the defence sector benefitted a bit due to gaining access to that capacity.”

Mr Start said after the pandemic, the automotive and aerospace industries had a backlog of activity to fill - especially aerospace with more people taking flights abroad. He added: “What that has done is push the lead times on components from two weeks, to two years in some cases. It has created an incredible skills shortage across the whole sector.

“The knock-on consequence in defence has been our industrial suppliers have found it harder to get components and skills, so they're having to work really hard to hold the delivery schedules on programmes and deliver programmes to cost. I’m actually really pleased that the headline data is as good as we’ve described it. Relative to what is going on globally, that is a good performance.” The number of amber projects is expected to rise to 41 from 39 for 2023-2024, with red climbing from five to seven, Lt Gen Magowan said.

Mr Start said the challenge will be to address the skills shortage - working with academia and industry firms to encourage more people to get into the sector. Defence firms such as BAE Systems and Babcock have already invested heavily into new apprenticeships and graduate schemes. When asked if more projects will end up in the red category over the next few years, he responded: “We’ll have to work really hard to keep it down.”

Ms Lewell-Buck said one programme, the Clyde infrastructure project, went from green, amber to red and then exempt last year. She asked: “Are we right to be concerned that national security is being used as a cover up for project failure?”

Lt Gen Magowan said there were a number of issues with the Clyde infrastructure programme specifically and does not represent a broad trend to hide information. “I resist that, that’s not the case,” he said. “We can have other sessions to go into any of the details of any of the programmes, but we can’t go into the details in an open forum on certain programmes. I can reassure you there is no drive from the department’s side to turn programmes grey so they can’t be scrutinised.”