Discussions with a wide range of parties within the Department highlighted concerns that competing "single Service agendas" were an important factor in overstretching available resources.
The EPP is compiled by the Capability Sponsor (CS) a "purple" (i.e., multi-Service) organisation, led by DCDS(Capability). As noted in Section 4.5.2, the Capability Sponsor is explicitly responsible for putting together a coherent and affordable plan for pan-Service equipment and support, for the near, medium and longer term.
The EPP is then incorporated by DG Strategy into the Defence Programme to be submitted to the Defence Board for approval on an annual basis. Within this, the single Service chiefs on the Board are pivotal. They are the formal experts on military requirements and capability and they have significant informal power as well. As a result they have close to, if not actual, veto rights. Each of them has strong incentives on two important dimensions:
• first, to get key programmes for their Service into the plan. Once a programme is in the plan it is rarely cancelled even if it is subsequently delayed; and
• second, to overbid for their Service's share of the plan.
The plan is built up from specific programme areas, overseen by Heads of Capability (HoCs) who are generally drawn from the single Service appropriate for that programme54. There is a strong sense that the HoCs try to achieve the "best", "most capable" outcome for each of their programmes. This is entirely understandable and laudable. "If people's lives are at risk we should be trying to get them the most capable equipment" is a common refrain. In addition, while the CS is a "purple" organisation, the single Service HoCs' future will be determined by their single Service superiors according to single Service criteria. Hence, the EP is being shaped both bottom-up and top-down with single Service agendas front of mind.
Although DCDS (Capability) recommends the programme to the Defence Board, he is not in a position to reconcile the medium to longer term affordability problem (although it is likely that this would be worse without this intervention). He is outranked by all the military members of the Defence Board, including his own single Service chief. His task therefore is to recommend a programme that is acceptable to the Defence Board including each of the single Service chiefs.
Some of the single-Service motivations are entirely good ones; the more spent on a particular Service will deliver a more effective Service better able to meet the demands made upon it. If each Service overbids then the compromise that time finally enforces is almost certain to be better for each Service than where one Service doesn't overbid but the others do. Here the outcome for the Service that doesn't overbid is inevitably going to be worse. As a result overbidding is an entirely rational and dominant strategy and the current behaviour is institutionally stable, within the current framework.
Furthermore, it would not matter if more money were allocated to solve affordability problems within the current structure. Each Service would have plenty of additional projects each of which would be shown to deliver "good" incremental outcomes. Each Service would bid for the additional resource and, in combination, would promptly lead once again to an unaffordable programme.
__________________________________________________________________________________________________________________________________
54 As at April 2009, 68% of HoCs and above within the Capability Sponsor were drawn from single service backgrounds.