Fractious relations between different Ministry of Defence agencies contributed to one of the most troubled government procurement programmes of the last decade, an independent review has found.
The Lessons Learned Review into the Ajax procurement programme has found individuals made errors of judgment, and optimism bias “infected some of the thinking” of senior officials.
But it said there was no misconduct by individual civil servants and the failures were systemic and institutional.
The £5.5bn programme, which aims to deliver 589 armoured vehicles, has been plagued by delays and safety concerns, which left its viability in question and triggered a lessons-learned review. Recently, the programme has turned a corner, with a new schedule agreed, noise and vibration issues resolved and tests resuming.
The review was commissioned in May last year following a damning health and safety report in December 2021 and a scathing report by the National Audit Office. It aimed to find ways to improve communication of issues in the MoD – looking at systemic and process issues; and individual action and inaction.
One of the key findings of the report, led by barrister Clive Sheldon KC, was the need for greater information sharing, trust and collaboration.
The report found “relationships between different entities within or associated with MoD were at times fractious and involved guarding of territory”.
This “friction” was most clearly seen in relations between DE&S, the delivery agent for the equipment side of the project, and Dstl, which provides scientific and technical expertise to the MoD, Sheldon found.
“Although Dstl’s subject-matter experts were well regarded, the technical and safety concerns they raised were often not resolved to their satisfaction,” he said.
There were also issues with the relationship between DE&S and the senior responsible owner for the scheme, an army officer who is ultimately responsible for the programme. The report found evidence that DE&S “misappreciated” the fundamental importance of the SRO position, and discussed and made decisions on significant concerns and issues without input from the SRO.
A key example of these issues came during a period of contract renegotiations with supplier General Dynamics, from 2017 to 2019, described by DE&S officials as “anarchy” and “chaos”.
In April 2018, a senior fellow at Dstl escalated concerns by writing formally to a senior official at DE&S to inform him that the safety case report for the programme was, in his view, unsound. “If correct, any trial being conducted would potentially be unsafe, with a high risk of a near miss or accident,” he said.
The Dstl fellow told the review that it was highly unusual for him to write a letter in such strong terms, and that similar letters had in the past led to programmes being halted while safety concerns were investigated. He said DE&S leaders did not appreciate the seriousness of his concerns and did not take sufficient steps to address them. The DE&S official, who was responsible for demonstration and manufacture, disagreed, telling the review that he had responded to the letter but "could not get to the bottom of the concerns being raised".
The report said it was clear the DE&S official “did not understand the letter to be as significant as the Dstl expert considered it to be, there was poor follow-up, and the issues raised by the Dstl expert were left unresolved”. It also saw no evidence that the Dstl letter was forwarded to the SRO.
Escalation failure and underappreciation of officials on the ground
The review also found a “marked failure” by officials to escalate information about problems in a clear and timely way, particularly when noise and vibration concerns were emerging.
Often, personnel did not escalate concerns unless a certain threshold of risk had been crossed, or until they believed that a risk had materialised and become an issue, the report said.
“Not only was there a failure to escalate those concerns properly, but it took a considerable amount of time before anyone looked at the matter strategically and asked what was really going on,” Sheldon said.
Sheldon said this led to senior officials and ministers being surprised to discover in late 2020 and early 2021 that the programme was at much greater risk than they previously thought.
But he said communication failures were also caused by a lack of appreciation of diverse and contrary voices by senior officials, especially from those working on the “shopfloor”, who often had a better understanding of what was going on. These voices “were not fully included, and were too easily dismissed”, he said.
Sheldon said this led to an over-reliance on individuals needing to show initiative and courage in going outside their chain of command to report their concerns to other teams.
Other issues identified in the review include an unhelpful focus on keeping to the initial operating capability target of 2020, which created pressure within the MoD and drove unhelpful behaviours such as focusing too much effort on near-term milestones at the expense of later milestones. Sheldon said this also led to compromise on safety issues, with vehicle trials continuing despite noise and vibration concerns.
The review also found problems with low staffing and rapid successive changes in key personnel, exacerbated the issues with the programme. Additionally, it found Covid had significantly impacted delivery, disrupting normal processes and making communication more difficult.
Sheldon has made 24 recommendations, which include greater collaboration between DE&S and Dstl, improvements to how concerns are escalated and committing key officials to five-year or milestone-based contracts.
Rather than a "wholesale re-configuration" of procurement programmes, Sheldon said “lots of relatively small improvements can be made, which should cumulatively have a substantial impact on the ability to deliver programmes more smoothly”.
Sheldon said he hopes the review will become “required reading” for senior officials working on procurement projects for the MoD.
Responding to the review in a statement to the House of Commons, defence procurement minister James Cartlidge said the MoD will focus on “understanding and applying” the lessons from the review, and “ensuring we deliver the game-changing capability that Ajax will provide the British Army as quickly as possible”.