Much of this report is concerned with processes and incentives within the MoD. However, the MoD does have a symbiotic relationship with the defence industry, and it is not sensible to talk about one without discussing the other. First, while constant readjustment of requirements and timing by the MoD does allow industry considerable scope to vary contract terms, it is not in the industry's long-term interests for the current position to continue. Industry as a whole also suffers from the MoD's delays and cost increases. It is not in industry's interests for all projects to slow significantly and costs to rise substantially, since this reduces the potential for export sales and crowds further innovation out of the defence programme.
In the course of the preparation of this report, several key industry leaders expressed a desire to pursue new emerging technologies which have application both within UK and for export. However, development of these technologies has been limited by a lack of cash because of the proportion of resources tied up in "legacy" projects. The heavy downward pressure on short-term expenditure also militates against technology demonstration projects and risk reduction exercises, which could reduce costs for both MoD and industry.
The Review team has detected a strong desire from industry to resolve this set of problems, even at the cost of a significant rationalisation of programmes. One senior industry figure commented that "We [industry] make more money out of the MoD the way things are at present. But we want to put the programme onto a much sounder footing."
He is not alone in this view. Other industry leaders echoed similar opinions. All worried about the erosion of the Research and Technology base that is a further by-product of the squeeze on spending coming from the overheated programme.
There was also a strong desire to engage with a better prepared customer. Greater professional skills, more timely decisions, and smaller teams were also common themes.
It was interesting, and surprising, to the Review team that industry is keen to change, given that change implies a significant reduction in programmes, as well as its more desirable outcomes.
Despite the symbiotic relationship, and industry's short-term financial interest in the status quo, industry clearly feels that the current situation cannot continue.
Many companies pressed for a reduction in size of DE&S, as its current scale forces industry to match it in resources devoted to programme administration. Others said that they were unclear whether it should exist at all. All argue for substantial reform, in DE&S, and in the setting of the Equipment Programme.