Summary

186.  The Government's Defence Industrial Policy, published in October 2002, emphasised the importance of fostering and sustaining the UK Defence research and technology base. Work continued to ensure that the Department has access to technology, including through implementation of Defence Technology Centres and Towers of Excellence. The MOD placed contracts worth over £400M under the Applied and Corporate Research Programmes, including 6% by open competition. The 2003 Equipment Plan was judged to represent a balanced Programme in capability terms. The Carlyle Group became the MOD's Strategic Partner to assist in the development of QinetiQ.

Technology in Support of Capability Requirements

187.  The central scientific staff continued to provide Ministers with coherent and timely advice on science and research issues. Operational Analysis provided by the Department's scientific staffs made a significant contribution to the Department's activities throughout the year. Initiatives such as Defence Technology Centres, Towers of Excellence and increased competition ensure that the Department continued to have access to technology to meet high-level Defence capability requirements. The Department is putting performance measurement systems in place based on the achievement of output owners' critical success factors and will undertake a customer survey by April 2004. The science and technology community is now moving to an output-driven and costed approach to delivering science and technology. This should both improve the impact of the investment in science and technology and provide better value for money.

188.  The Department placed contracts worth over £400M under the Applied and Corporate Research Programmes. The majority of this work continues to be placed with Dstl and QinetiQ, but the proportion open to competition is expanding, reaching 6% by the end of the year. Significant advances in technology have resulted from the research undertaken. These include improvements in stealth materials, processes to produce composite materials at 30% lower cost, and advanced lightweight armour for future fighting vehicles.

189.  The Government's Defence Industrial Policy, published in October 2002, emphasised the importance of fostering and sustaining the UK Defence research and technology base. Work to deliver the research and technology part of the policy is being taken forward in partnership with industry under the auspices of the National Defence Industries Council.

Coherence, Balance and Affordability of the Equipment Plan

190.  The 2003 Equipment Plan (EP) represented a balanced programme in capability terms, reflecting the priorities associated with the additional funding made available by Spending Review 2002. The Equipment Capability Customer made increasing use of Decision Conferencing to help inform the choices available for shaping the forward EP. In addition, the EP for 2003 was costed in Resource terms for the first time, which will increasingly highlight the true - resource - cost of holding assets and therefore the importance of timely delivery of equipment to the Front Line Commands. In parallel, work is underway on the use of Whole Life Costs in the EP process to ensure that EP decision-making takes full account of the resource implications of different courses of action.

DERA Public Private Partnership

191. The scientific and technical expertise developed under the Defence programme is a national asset and the Public Private Partnership for the Defence Evaluation and Research Agency (DERA) is designed to make the most of this expertise and exploit it for wider UK benefit. In December 2002, the MOD and The Carlyle Group agreed terms under which The Carlyle Group became its Strategic Partner to assist in the future development of QinetiQ, formerly part of DERA. Carlyle acquired a minority economic interest in QinetiQ, a small amount was made available to employees and the MOD retained the major economic interest (62%). The transaction was finally completed on the 28 February 2003.

Last Updated: 3 Dec 03