Proliferation in Parliament
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Westminster Parliament
Public Accounts Committee Report
Public Accounts Committee - Eleventh Report The United
Kingdom's Future Nuclear Deterrent Capability, HC 250 of 2008-09, 19 March
2009
Full text of the report is available here as a pdf.
Conclusions and recommendations
1. The Department's existing cost estimates do not provide
an accurate baseline against which to measure progress. The forthcoming
revised cost estimates should distinguish between future deterrent costs
and the general overheads of the submarine industrial base, and provide
clarity as to how the Department intends to deal with VAT, inflation and
contingency.
2. In September 2009, the Department has to make key decisions
about the submarine design which will have implications for the procurement
and support costs of the programme for decades to come. Given the
importance of these decisions, the Department should commission independent
validation of the assumptions underpinning its cost models and assess
the reasonableness of its estimates using historic trend analysis.
3. Suppliers to the submarine industry constitute a highly
specialised industry sector, with a number of monopoly suppliers. Given
this imperfect market environment, value for money will be hard to achieve.
The Department should specify exactly how it will ensure it obtains value
for money from its suppliers and set out performance indicators for the
programme, against which it will report to Parliament.
4. The United Kingdom's new submarine will incorporate
an American-supplied missile compartment. As the current Vanguard fleet
will go out of service in the 2020s, the United Kingdom's programme is
running ahead of the United States' programme. The United Kingdom will
therefore have to make key design decisions on a replacement submarine
before the United States. Given the unavoidable dependence on the
American programme, the Department should analyse the lessons from other
projects where the Department has been dependent on the United States
for critical elements of technology. The Department should use this analysis
to inform the development of its proposed communications plan.
5. Given the lack of time contingency for the submarine
construction programme, some overlap between the design and production
phases of the programme is likely to be necessary. The Senior Responsible
Owner needs to set out how he will trade between the risks and opportunities
involved in managing overlaps, and agree an explicit change management
mechanism with other departmental teams and commercial partners at the
outset of the project to deal with emerging difficulties in a timely manner.
6. The programme's Senior Responsible Owner role still
does not conform to Office of Government Commerce guidance. The Department
should review what prevents it moving to an arrangement which conforms
more closely to Office of Government Commerce guidance and set out ways
to redress the current shortfall as part of its Initial Gate submission.
7. The Senior Responsible Owner does not have direct line
management responsibility for some Programme Board members and must therefore
work in part by influence and consensus. The Department is confident
that it can align incentives and reward good behaviour when individual
Programme Board members have conflicting priorities. However, it did not
explain persuasively how it would achieve this goal and should clearly
set out how this can be done.
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