'Is defence R&T safe in the MoD's hands?'

25 June 2012

The MoD should be preparing for the future with research and technology high on its agenda, argues industry analyst Derek Marshall

Recent speeches by the Secretary of State for Defence, Philip Hammond, have suggested we are at a watershed for the UK's armed forces. The £38bn black hole in the defence equipment programme has been dealt with; the Ministry of Defence can afford a programme of £160bn over the next 10 years; very large cuts in the manpower of the services are being implemented as operations are reduced; much of the pain is still to come, but the budget is back in balance.

At such a difficult time for people in the armed forces, and indeed, in the UK defence industry, where an estimated 30,000 jobs are also being lost, it might seem untimely to ask what is being done about defence research and technology. But at this turning point, when we at last have some headroom in the budget (£8bn of the £160bn is unallocated) there is an opportunity to think about the long term needs of the UK for national security, including getting the right new technologies to combat future threats.

The government's view on R&T was set out in its White Paper issued in February. A commitment was made "to sustain investment at a minimum of 1.2 per cent of the defence budget". The pledge received a cautious welcome. It is better than the continued cuts in R&T that all governments carried out from the end of the Cold War until in 2009 Labour made a similar vow not to reduce the budget any more. But is R&T safe in MoD's hands?

Some argue the MoD's prime interest is to secure technology advice to enable it to be an intelligent customer; that R&T programmes represent less than 0.5 per cent of the defence budget. Mr Hammond's determination to wring "every ounce of capability from the resources available" is understood, but R&T fits uneasily within current "buy-off-the-shelf" policies. Industry is asked "to find cost-effective solutions"; by implication this will mean finding technology from other countries where R&T is funded and the costs are recouped largely from exports.

Ironically the case for putting resource into R&T was made strongly by MoD itself six years ago when it funded research that showed the strong correlation between current military effectiveness and expenditure on technology 10-25 years before. Decisions being taken now will impact on the armed forces capability over a decade in the future. This is a tough call for politicians and military planners caught in a recession, but they know what they need to do: in 2007 the UK and other Defence Ministers of Europe agreed that 2 per cent of the national defence budget was the right target for defence R&T. It is hard therefore to celebrate a decision to "bottom out" spending at 1.2 per cent.

The low level of Government R&T spending is reflected by industry, which is naturally reluctant to fund R&T in a climate of recession and defence cuts. Universities are more willing to undertake early stage research but are also affected by austerity and need direct encouragement to undertake R&T to support national security rather than to attract commercial sponsorship.

So what should be done? Here are some suggestions:
• Under the National Security Strategy, government should look at creating more mechanisms for bringing public sector agencies, industry and academia together to identify the key technologies to address future threats and do joint pre-competitive work on them.

• Mr Hammond has declared that no country can protect its national security on its own. R&T co-operation should be a key part of the agenda. The government has declared a preference for bilateral co-operation, and for working with the US and France and perhaps other partners. But opportunities also exist for multilateral cooperation on dual-use technologies, where significant funds are available from EU sources.

• The MoD and Government agencies that sponsor security R&T should ensure that their commercial conditions encourage industry, big and small, and universities to take risks in exploring new technologies. Austerity can engender a hair shirt approach that is not conducive to innovation. In particular, intellectual property conditions and profit rates should, within limits, stimulate a sense of discovery, not just good book-keeping.

• Preparing the future of national security should be high on the political agenda. Mr Hammond has declared the aim of "meeting threats as they evolve upstream and at a distance". A key element of this should be how much is being spent on R&T and how it is being allocated. There should be a national programme covering all the above aspects under the auspices of the National Security Council.

This appears to be the moment when the UK can start developing the agenda for its future National Security, not just agonising about cuts to deal with past indiscipline. R&T should be high on that agenda, not just a footnote.