'Boosting contractor numbers requires new thinking from the army'

11 September 2012

Dr John Louth, of the Royal United Services Institute (RUSI), reflects on the changes required across the spectrum of the government-industry relationship for defence…

At RUSI's Land Warfare Conference at the beginning of June, the Secretary of State for Defence confirmed that the British Army was to become significantly smaller as it reshaped into the revised brigade structure announced initially through the Coalition Government's Strategic Defence and Security Review (SDSR) of 2010. In essence, Hammond reaffirmed announcements made by the army in July 2011 that outlined a future force structure of around 90,000 soldiers by 2015 and a steady-state army of 82,000 by 2020. These force elements were to be supported by an expanded and much more integrated reserve capability.

For many observers though, a fresh emphasis was placed by the government on commitments to greater private sector engagement with the military through expanded contractor support, both on the front line and at home.

Hammond and his officials have been briefing for a while now that Britain's full-spectrum defence capability would be generated, in future, through strategic and operational partnerships, both with the militaries of other nations and through industry. Indeed, the financial settlement for defence signalled by the SDSR could hardly indicate otherwise. But the symbolism of contractors replacing soldiers, played out at the Land Warfare Conference, caused many to draw breath.

In many ways this response seems a little contrived as industry has played an important role on operations for quite some time now. For example, in 2010, over 7,000 contractors were deployed by the UK in direct support to operations in the Gulf, Afghanistan, Indian Ocean and the Balkans. Some analysts have assessed that in excess of 40% of the UK military effort overseas was conducted or enabled through contractors in this year alone, with a direct contractual expenditure of £2.6bn.

As an alternative, instead of taking the data for a specific year, we could look at one theatre, Afghanistan. In July 2008, 22 companies were operating there under government contracts, utilising 2,030 employees directly supporting the military. By July 2010, that had grown to 67 businesses with 4,867 staff members, accounting for 35% of the combined deployed military/industrial workforce. So the idea of industry conducting operations in partnership with the military component is a tried and tested element of the modern order of battle and hardly a contested concept.

Where this discussion becomes more nuanced is around the emphasis placed on industrial or service contractors. The very notion of contractor support to operations implies that the military is, somehow, both the statistically dominant element within the relationship and overtly sets the direction of travel. If traditional military functions are outsourced to the private sector in their totality, we could conceivably see a replacement of the soldier by the contractor instead of a support services function. This could be problematic depending upon the function in question.

In the US there is an active debate relating to the operation of that country's drone capabilities. If drones are being used to generate lethal force, can their operation be left to a person in overalls rather than uniform? There is a cat's cradle of ethical, judicial and legal issues here that will increasingly occupy policymakers in the years ahead, and it is a debate coming to Whitehall and Westminster.

Moreover, some analysts have questioned whether the industry base is in a position to occupy ground previously held by the army. First, whilst the British government has a clear policy of generating defence capabilities through open competition on a global stage where appropriate, there is a clear tendency towards long-term, so-called partnering contracts. For example, test and evaluation services to defence are provided by QinetiQ to the MoD through a 25 year long-term contract, and the UK submarine sector for both the Astute and Successor programmes is a compendium of industrial skills and competencies coming to the market through long-term manufacturing and service contracts with MoD.

Within the defence industrial sector, therefore, there is both a tradition of long-term commitment to the military component and the sense that companies are part of the team. So industry can stand up to make the best of the opportunities signalled by Hammond in June. Where it becomes challenging is how to commercialise these opportunities when all governments are suffering from a shortage of money.

We can be sure of one thing. New thinking is driven by necessity. The narrative around outsourcing is framed by financial constraints and hard-edged fiscal realities. The army is changing because it must, not because it necessarily so wishes. Industry must also change in the manner in which it contracts for goods and services and the way it considers notions of reward and value. New thinking right across the spectrum of the government-industy relationship for defence is a tall order, but the inevitable consequence of reform since 2010. Hammond's 'new model army' marches on, in both uniforms and overalls.