Ministry of Defence

The United Kingdom’s Future Nuclear
Deterrent Capability
REPORT BY THE COMPTROLLER AND AUDITOR GENERAL | HC 1115 Session 2007-2008 | 5 November 2008

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Ministry of Defence

The United Kingdom’s Future Nuclear
Deterrent Capability

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REPORT BY THE COMPTROLLER AND AUDITOR GENERAL | HC 1115 Session 2007-2008 | 5 November 2008

This report has been prepared under Section 6of the National Audit Act 1983 for presentation
to the House of Commons in accordance with
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Tim Burr
Comptroller and Auditor General
National Audit Office
28 October 2008
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Tom McDonald, Gareth Tuck,
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under the direction of Tim Banfield
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contents
summary

4

Introduction

8

Risk area 1

Meeting a challenging timetable

12

Risk area 2

Making decisions about the design
on time17

Risk area 3

Ensuring effective governancearrangements

20

Risk area 4

Developing a robust budget andexerting financial control

25

Risk area 5

Applying effective procurement practices

28

Appendix

1 Study methodology

31

glossary

33

Photograph courtesy of © Crown Copyright/MOD, image from www.photos.mod.uk.
Reproduced with the permission of the Controller of Her Majesty’s Stationery Office.

SuMMARy
1
This report takes an initial look at the Ministryof Defence’s (the Department’s) programme for
implementing the Government’s decision to maintain the
United Kingdom’s nuclear deterrent capability beyond
the life of the current Trident system. The programme isat an early stage with the Department currently engaged
in a two-year concept phase, focused on the new class ofsubmarine, which is due to finish in September 2009. This
phase will establish the principal design parameters of
the submarines and consider how to deliver other aspects
such as manning, training and infrastructure. Other work
is focused on assembling the information necessary to
inform decisions on whether and how it may be necessary
to refurbish or replace the current nuclear warhead thatare expected to be necessary in the next Parliament. Our
report therefore focuses on the major risks to delivery as
they currently stand, and the actions that the Department
is taking to manage those risks.

4

THE uNITED KINGDOM’S FuTuRE NucLEAR DETERRENT cAPABILITy

2
The United Kingdom deployed its first submarinelaunched nuclear deterrent in 1968, known as Polaris,
with the commissioning of the Resolution class submarine
fleet. Polaris stayed in service until the mid-1990s,
when it was replaced by the Trident system, deployedon Vanguard class submarines, the first of which cameinto service in 1994. Since the introduction of Polaris,
successive governments have been committed to a policyof continuous at sea deterrence, meaning that at least
one nuclear-armed submarine is on patrol at any time.
Continuous at sea deterrence is a clear and demanding
operational requirement which has been met since 1968.
3
The nuclear deterrent currently comprises
four principal elements: a fleet of four Vanguard-classsubmarines; access to a pool of Trident D5 missiles,
shared with the United States; a stockpile of nuclear
warheads; and a range of support infrastructure.

summary

In 2006, the Government announced its intention tomaintain the UK’s nuclear deterrent capability, focussed
primarily on the acquisition of a new class of submarines.
The Government also set out its plans to participate in the
United States of America’s programme to extend the lifeof the Trident D5 missile and to make a decision in due
course about whether and how it may be necessary torefurbish or replace the current nuclear warhead.

Main findings
4

Our main findings are as follows:

5
There is a challenging timetable to meet if
continuous at sea deterrence is to be maintained.
The critical path for provision of a future deterrent
capability is the delivery of the nuclear-powered
submarine platform in time to meet an in-service date of2024. But there are also possible time constraints fromother areas of the programme. There is currently little
scope for incorporating time contingency in the overall
programme to deal with slippage in any of these areas.
The Department is currently examining how it might
mitigate this risk.
6
The current two-year concept phase involves arange of important and difficult decisions which must
to be taken in a timely manner in order to keep the
programme on track. The technical complexity andthe involvement of a wide range of partners, including
other government departments and the United States ofAmerica, makes developing the design specification for
the future submarine a challenging task. There are still
major decisions to be made if this work is to be completed
on time by the formal end of the concept phase in
September 2009.
7
The Department has developed management anddecision-making arrangements during the concept phase,but recognises that these arrangements will need to bestrengthened as the programme develops. Our work
has identified challenges which need to be addressedin the short term, such as the overall coordination of
the programme. The Department is developing work
schedules, progress monitoring and risk management
arrangements, but these are not mature yet.

8
The Department has made good progress in
identifying, engaging and communicating with importantpartners including other government departments andindustry. Whilst communications across the programme
are generally good, further opportunities exist, suchas secure video conferencing with the United Statesand improved IT infrastructure, which would increase
working efficiency.
9
The Government’s White Paper predicted anacquisition cost for the new system of £15-20 billion in
2006-07 prices. The White Paper also concluded that theoperating costs would be similar to the current deterrent
at between 5 and 6 per cent of the annual defence
budget, but did not quantify those costs. The Department
is improving the White Paper cost estimates but they are
not yet sufficiently robust to support the future deterrent
programme throughout its planned life. There remain
a number of major areas of uncertainty in the budget,
including the provision for contingency, inflation andValue Added Tax. Budgetary control arrangements are still
being developed and there are some areas of potential risk
which need to be addressed.
10 The 2005 Defence Industrial Strategy sets out theGovernment’s intention that Royal Navy submarines
will be built in the United Kingdom. Suppliers to thesubmarine industry constitute a highly specialised
industrial sector with a number of monopoly suppliers.
There are difficulties inherent in providing the rightincentives for monopoly suppliers to deliver to time andbudget. Currently, there is no single document which setsout convincing evidence of how the Department intends
to assure value for money from its suppliers throughout
the life of the programme. The Department is aware of thisand will include criteria for assessing value for money inthe procurement strategy it has under preparation.
11 Both the Department and its industrial suppliers
have identified skills shortages and are considering how
to address them. These shortages relate to submarinebuilding expertise within the industrial supply chain andfinancial, commercial, programme management andnuclear-related expertise within the Department.

The United Kingdom’s Future Nuclear Deterrent Capabilitysummary

Overall Conclusion
12 The programme to maintain the UK’s nuclear
deterrent capability is at an early stage. It is therefore notsurprising that some critical arrangements and decisions
required to deliver the future deterrent are still being
developed. For example, there are considerable challenges
in ensuring that the Department’s suppliers perform
effectively and that the new submarines are deliveredon time and at an acceptable cost. The Department has,
however, made good progress in establishing programmemanagement arrangements, coordinating all aspects ofthe future deterrent capability and engaging industry andother government departments. The risks identified inthis report will need to be managed carefully if value formoney is to be achieved over the life of this programme.

Recommendations
13 Box 1 sets out the principal areas of risk that need
to be managed to ensure the successful delivery of the
future deterrent on time and on budget. These risks
are interdependent but each alone has the potential toundermine the Department’s ability to deliver continuousat sea deterrence in the future. The Department is awareof these risks and is monitoring them through its newly
established Programme Support Office, reporting to the
Senior Responsible Owner.

The successful delivery of the future deterrent
capability will require co-ordinated and timely
action from a range of senior decision-makers
across government, internationally and inindustry. The inherent complexity of the delivery
arrangements increases the risk of poor or
cumbersome decision‑making. The Department
faces a challenge in ensuring that the leadershiparrangements are fit for purpose as the programmeevolves. The Department should:

BOX 1
Principal areas of risk which need to be managed1

Meeting a challenging timetable.

2

Making decisions about the design on time.

3

Ensuring effective governance arrangements.

4

Developing a robust budget and exerting financial control.

5

Applying effective procurement practices.

The United Kingdom’s Future Nuclear Deterrent Capability

Establish and communicate to decisionmakers within the Department, acrossgovernment and in industry a clear timetablefor decisions with the specific deliverables
required to achieve them clearly identified
and agreed with those responsible.

ii

Take stock after Initial Gate, and certainly byMain Gate, on the evolution of the Senior
Responsible Owner role and supporting
structures, ensuring that the experience,seniority and time commitment required of
the individual or individuals charged withcoordinating decision-making and providing
overall direction for the programme, which
will change as the programme matures, aretaken into account.

iii

Encourage decision-makers to work in acollegiate manner by more closely aligningincentives to improve joint working andidentifying and rewarding behaviours which
will underpin this.

b

The Department needs to create a single, consistentand accurate dataset for the programme to ensurethat decision-makers have the relevant information
required when making decisions and to provide
clear data for oversight of the programme. It should
put in place, by no later than the end of theconcept phase, a single set of performanceindicators demonstrating progress on key time,cost, performance and risk metrics across the
programme. These indicators should be managed
by the Programme Support Office on behalf of
Director Strategic Requirement and the Senior
Responsible Owner.

c

There is a need, recognised by the Department,
to refine and update the initial estimates of thecosts of the programme set out in the White Paper
and, in particular, to produce robust estimates ofwhole-life costs. In undertaking this work, there is abalance to be struck between producing whole‑lifecost estimates with sufficient detail to support key
decisions and introducing spurious accuracy before
many technical aspects of the programme areunderstood. By September 2009 the Department
should have more robust cost estimates that makeprovision for the areas of uncertainty raised in thisreport, as well as developing fuller cost estimatesfor other areas such as infrastructure and training.
Within that revised cost estimate and given theuncertainties involved, the Department will needto decide what period its provision for elements
such as contingency and inflation will cover.

14 Within those five areas of risk, we have identified
a number of elements of the programme which requireparticular attention in the short term.
aisummaryd

To ensure effective oversight of in-year expenditureon the programme, it is essential that the programme
team supporting the Senior Responsible Owner havedetailed visibility of the budget once it is distributed
through the integrated project teams responsible fordelivery. The Department should mandate that theProgramme Support Office, on behalf of Director
Strategic Requirement and the Senior Responsible
Owner, has access to each integrated projectteam’s financial management information andthat information is held in a common form, with
common assumptions.

e

Critical to the successful maintenance of continuousat sea deterrence is establishing with greatercertainty how far the life of the current Vanguard
class of submarines can be safely extended.
While the assessment of risk will continue until
the Vanguard class goes out of service, the various
parts of the Department involved need to provide
the Programme Board with a thorough analysis bySeptember 2009 to show what the full implicationsof this work are. Those teams should agree dates
for critical decisions, as well as responsibilities forwork required to meet those dates.

f

Making certain that its suppliers deliver on timeand at an acceptable cost is a major challenge forthe Department, which requires a comprehensive
strategy to bring together all elements of the
programme. The Department should implement
the lessons it has learnt from similar projects andprevious NAO guidance, and work with industry
to develop a commercial strategy which provides aclear picture of how it will incentivise performancein the context of its overall relationship with the
suppliers concerned.

gA range of government departments are involvedin nuclear-related policy-making, regulation andoversight across the civilian and military sectors.
This work requires a range of specific skills.
The Department and its industrial partners are facingsome skills gaps, including programme management,
submarine construction expertise and nuclear-related
experience. Although the Department is introducing
some sensible short-term measures to alleviate thosegaps, it needs to pursue urgently measures to resolvethese problems in the long term if it is to mitigate
the risks facing the programme throughout its life.
By September 2009 and working in conjunction
with key industrial suppliers, the Department
should produce a report analysing the lessons
learned from practices adopted to date, identifying
specific skills gaps and setting out a long-term
strategy to fill those gaps. As part of this analysis
the Department should continue to engage withother government departments involved in the civil
nuclear field to maximise the United Kingdom’s
skills base as a whole.

The United Kingdom’s Future Nuclear Deterrent CapabilityIntroduction
1
This section sets out some key facts about the United
Kingdom’s nuclear deterrent and the Government’s plans
to maintain it. It also highlights some of the challenges
involved in delivering complex defence projects and notes
the need for the Department to learn from the experienceof the current Astute submarine acquisition.

Key facts about the nuclear deterrent
2
The nuclear deterrent currently comprises four
principal elements: a fleet of four Vanguard-classsubmarines; access to a pool of Trident D5 missiles,
shared with the United States; a stockpile of nuclear
warheads; and support infrastructure. These are set out in
Box 2 below.

3
A typical ballistic missile submarine and its principal
compartments are shown in Figure 1. The illustrationshows the considerable amount of space required by
the engine room and the missile compartment and theimportance of their dimensions to the overall size andshape of the submarine.
4
Since the introduction of Polaris patrols in 1968 theUnited Kingdom has ensured that at least one nucleararmed submarine is on patrol at any time and has recently
achieved 300 consecutive patrols without a break. This is
known as continuous at sea deterrence. The Department’s
rationale behind this concept is as follows:box 2
Principal elements of the United Kingdom’s current nuclear deterrent

Capability

Description

4 Vanguard class submarines

Also known as SSBNs (Ship Submersible Ballistic Nuclear). Each submarine has a 146-man crew and
16 missile tubes. The first of class began deterrent patrolling in 1994. Based on current assumptions
about extending its planned service life, the Vanguard class is likely to start leaving service from theearly 2020s.

Trident D5 missile

Each missile has a range of over 4,000 nautical miles. The United Kingdom does not have any
sovereign missile production capacity and is reliant on the United States of America for supply.

Nuclear warhead

Produced and supported in the United Kingdom by the Atomic Weapons Establishment withcertain United States-supplied non-nuclear components. The United Kingdom has a stockpile offewer than 160 operationally available nuclear warheads. Vanguard-class submarines carry up to48 nuclear warheads.

Crews

The Royal Navy is responsible for recruiting and training the crews who operate the submarines.

Support infrastructure

Comprises support and overhaul facilities at the HM Naval Base sites at Faslane and Coulport in
Scotland and Devonport in Plymouth; in-service operational support; and the infrastructure associatedwith the command and control of the submarines.

The United Kingdom’s Future Nuclear Deterrent Capability

Introduction

the submarine on patrol is less vulnerable to attack,providing assurance that the nuclear deterrent isavailable at all times. This feature is particularly
important given that, in contrast to all other declared
nuclear powers, the United Kingdom has noalternative nuclear deterrent capability such as airor ground-launched weapons;n6
The White Paper’s principal conclusions wereas follows:nn

the Government considers that this invulnerability
contributes to stability by removing the incentive fora pre-emptive attack on its nuclear forces; andnif continuous deterrent patrols ceased, the United
Kingdom could be deterred or prevented from
deploying a nuclear armed submarine in a crisis.

n5
In its 2006 White Paper1, the Government explained
the reasons for its decision to maintain the United
Kingdom’s nuclear deterrent capability beyond the lifeof the current Trident programme. The White Paper also
explained why the decision needed to be taken at thatpoint, what further decisions were likely to be necessary,
what the estimated procurement costs would be and what
the United Kingdom’s international obligations in relation
to the deterrent were. It considered four possible genericdelivery options for the future deterrent: a large aircraft
equipped with cruise missiles; silo-based ballistic missiles;
a surface ship equipped with ballistic missiles and asubmarine equipped with ballistic missiles.

1n

the Government had decided to take the steps
necessary to sustain a credible deterrent capability inthe 2020s and beyond;a review of the available delivery options against
cost, vulnerability and effectiveness criteria had
demonstrated that a submarine-based systemequipped with ballistic missiles continues to provide
the most effective deterrent and that no credible
alternative would be more cost-effective; andthe Government had decided to build a new classof submarines, at an estimated procurement cost of£15-20 billion, and participate in the United States
life extension programme for the Trident D5 missiles.

7
The conclusions of the White Paper and thesubsequent House of Commons debate in March 2007
constitute the starting point for our work.

A typical ballistic missile submarine and its principal components

Engine RoomThis compartment
contains propulsion andelectrical equipment

Missile Compartment

Forward Compartment

This compartment
contains the ballistic
missile tubes

This compartment contains
the command and control
centre, dining facilities andcrew accommodation

Source: National Audit Office

1

The Future of the United Kingdom’s Nuclear Deterrent, Cm 6994, December 2006.

The United Kingdom’s Future Nuclear Deterrent CapabilityIntroduction

The challenges of delivering complex
defence projects
8
Our annual Major Projects Reports and other value
for money work on large defence acquisition projects showthat complex projects such as the Type 45 Destroyer andthe Nimrod Maritime Reconnaissance and Attack Mark 4
aircraft have suffered considerable delays and cost overruns.
The Major Projects Report 20072 showed that these two
projects had reported delays of 36 and 89 months and cost
overruns of £989 million and £687 million respectively.
9
These delays and cost increases cause several
problems. As well as costing the taxpayer more money
than should have been the case, they can delay thedelivery of military capability to the front line or force theDepartment to reduce the project’s capability in order tosave money. They can also hinder the delivery of otherassociated projects. The renewal of the nuclear deterrent
poses a particular challenge in this regard, in that it must
be in service with the Royal Navy by 2024. The fact thatit cannot be delayed means that the Department can only
compromise on cost or performance if the programme is
at risk of not being delivered on time.

nnthe loss of key skills and experience as a result of a gap
between submarine construction programmes; andvarious types of unplanned cost growth.

These difficulties may not all materialise on the future
deterrent programme, but Risk Area 5 of this report,
covering the Department’s relationship with its suppliers,
sets out how these kinds of issues are being addressed.
11 Because of the similarities between the Astuteproject and the future submarine class which will carry
the future nuclear deterrent, the Department needs toensure that it has learnt these lessons of the Astute projectand is putting them into action in the new programme.

10 One defence acquisition project which is ofparticular importance to the renewal of the nuclear
deterrent is the Astute submarine project. This project
has suffered various problems during the last decade.
These are set out in Box 3, together with the actions takenby the Department and the contractor, BAE Systems, toremedy them. The five principal difficulties encounteredduring the Astute project to date are as follows:
n
n

n

2

10

slow contract negotiations;an ill-advised attitude to risk on the part of
the Department;difficulties encountered by the contractor witha computer assisted design tool untested in theship‑building industry;

Major Projects Report 2007, Report by the Comptroller and Auditor-General, HC 98, Session 2007-2008, 30 November 2007.

The United Kingdom’s Future Nuclear Deterrent Capability

Introduction

box 3
Problems associated with the Astute submarine programme and actions undertaken by the Department to resolve them
The Astute submarine programme

Ministry of Defence action to resolve problems

The Astute class of nuclear-powered, conventionally-armed
submarines is the replacement for the existing Swiftsure andTrafalgar classes. As well as fulfilling the traditional anti-submarine
warfare role, the Astute class is designed to provide a wide
range of support to joint operations, including land attack,intelligence gathering and special forces operations. HMS Astute
was launched on 8 June 2007 as the first of class. She displaces
7,800 tonnes dived and is 97 metres long.

Following BAE Systems’ disclosure during 2002 of significant
delay and projected cost overrun on the Astute programme,
the Department reached agreement on how to address thosedifficulties. A formal agreement was reached in February 2003
which reduced risk (principally by separating the design,development, build and acceptance of the first of class from theproduction of the second and third submarines), and placed
new incentives on the company to perform. An amendment
to the Astute contract to enact the agreement was signed in
December 2003. Since the agreement, all the programme’s
anchor milestones have been met and new project management
disciplines have been implemented to achieve better planning andperformance monitoring.

A prime contract was awarded to GEC-Marconi (subsequently
BAE Systems) in March 1997 for the design, build and in-service
support of the first three of class. The Department approved thecontract at a cost of £2,578 million, with a planned in-service
date for the first of class of June 2005. The Department expects tobuy seven submarines in total.
Problems encountered to date
The programme has suffered a number of problems, which havecaused delays of 41 months and cost overruns of £1,220 million
to date. The principal problems are as follows.
Slow contract negotiations: The contract negotiations were lengthy
and delayed the in-service date by nine months at the beginningof the programme.
Ill-advised attitude to risk: The contract was let under thephilosophy of transferring as much risk as possible to industry,including full responsibility for both design and construction.
Previously the Department had produced the design and thencontracted with industry to deliver it. Given GEC Marconi’s (andsubsequently BAE Systems’) lack of ship-building experience at theprime contractor level at that point, the Department were overoptimistic in their assessment of the contractor’s capacity to deliver.
Computer Aided Design: The contractor encountered difficulties
with a computer aided design (CAD) tool which had notpreviously been used for ship-building, and the anticipated andcontracted schedule and cost benefits did not materialise.
Gap between Astute and previous submarine construction
programmes: The time delay between the construction of theVanguard-class submarines and the beginning of the Astuteprogramme meant that key skills and submarine-building
experience had been lost. The awarding of other ship-building
work to the Barrow shipyard did not prove sufficient to maintainthose skills specific to the design and construction of submarines.

Revised payment arrangements: As part of the February 2003
Agreement, a revised Target Cost Incentive Fee arrangement was
put in place for Boat One; Boats Two and Three were allowed
to proceed on a cost‑plus basis, pending final pricing. Prices
were concluded for Boats Two and Three in 2007; a Target Cost
Incentive Fee arrangement with a maximum price was agreed foreach Boat.
Joint problem-solving: The Department agreed to increase its cash
funding for Astute by around £430 million, against an increased
contribution by the company of £250 million. This was primarily
in recognition of the greater than expected difficulty in applying
CAD techniques. BAE Systems also invited the General Dynamics’Electric Boat shipyard to provide assistance in developing the
CAD implementation.
Improvements in construction performance: BAE Systems has
made a series of changes to construction methods at the Barrow
shipyard to improve performance and efficiency. For example, thepressure hull units of boats 2 and 3 are positioned on their end toassist the workforce during the assembly phase, thereby reducing
the time required.
Joint action to reduce costs: In partnership with BAE Systems, theDepartment has undertaken a range of activities to save money
and make efficiencies. For example, the Department has saved£33 million by compressing the sea trials programme.

Cost growth in other areas: The programme has suffered from
unplanned cost growth in various areas, including increases of£164 million and £68 million in 2006-07 for materials andlabour respectively.

The United Kingdom’s Future Nuclear Deterrent Capability

11Meeting a challenging
timetablerisk area 1
1.1 This section considers the challenges in meeting thetight timetable that has been set to ensure the seamless
transition from one class of submarines to the next andthe time constraints imposed by other elements of the
programme. The consequence of not managing this risk
will be the late delivery of the future deterrent capability.
This in turn may jeopardise continuous at sea deterrence
unless the Department has been able to extend the life of
the Vanguard class beyond its current assumptions.

Meeting a challenging timetable tomaintain continuous at sea deterrence
1.2 The current fleet of four Vanguard-class submarines
were designed for an operational life of 25 years. The first,
HMS Vanguard, commenced contractor sea trials (thestart of a submarine’s design life) in 1992 and began its
first deterrent patrol in 1994. The fourth, HMS Vengeance,
commenced contractor sea trials in 1999 and undertook
its first deterrent patrol in 2001.
1.3 The Department anticipates that it will be possible
to extend the life of the Vanguard submarines to maintaina continuous at sea patrol until 2024, at which point
two of the four submarines will have gone out ofservice. Beyond this date therefore, the first replacement
submarine must be in service with the Royal Navy to be
assured of maintaining continuous at sea deterrence.

2

1.4 The critical path for provision of a future deterrent
capability is the delivery of the submarine platform in time
to meet an in-service date of 2024. The Government’s
White Paper on the Future of the United Kingdom’s Nuclear
Deterrent dated December 2006 stated that it is likely totake 17 years to design, build and test a replacement to theVanguard-class submarines. A 17-year timescale provides
a projected in-service date of 2024 for the first of the newclass of submarines, which allows no time for slippage if
continuous at sea deterrence is to be maintained.
1.5 Working backwards to meet this date, a seriesof other milestones must be hit, as Figure 2 shows.
According to the Department’s current plans:
n

n

n

n

the submarine build process must be complete by2022 so that two years of testing and acceptanceprocedures can begin;
the submarine build process is likely to takeeight years and must begin in 2014;
the Main Gate investment decision must therefore
be taken no later than 2014, with approval for the
procurement of long-lead items for the submarine
achieved by 2011; andthe Initial Gate decision to enter the Assessment
Phase and place a full design contract for thesubmarine must be taken by September 2009.

Summary timeline for the development of the future submarine classConcept
Phase

InitialGate

DesignPhase

2008	September 2009

Main
Gate

2014

Source: National Audit Office/Ministry of Defence

12

Renewing the submarine fleet

The United Kingdom’s Future Nuclear Deterrent Capability

Submarine Build
Phase

Testing & In-service
Acceptance
Date
Procedures
2022

2024

risk area 1

1.6 Figure 3 overleaf shows the timelines for thecapability as a whole. This includes the withdrawal of theVanguard class, the introduction of the future submarine
class and the replacement or extension of the otherelements. The Department’s plans show that the missile
procurement, warhead development and infrastructure
projects do not currently lie on the critical path, because
its strategy, in general terms, is to upgrade existing
technology and facilities in these areas. As paragraphs
1.11 to 1.20 explain, these elements of the nuclear
deterrent capability may feature more strongly on thecritical path once the Department has made the high-level
design decisions on the submarine in 2009.
1.7 A critical element of the timetable for the
introduction of the future submarine class is establishing
how long the Vanguard-class submarines can be lifeextended. The White Paper suggested that it would bepossible to extend the life of the Vanguard class by
five years but that any further extension would require
the replacement or refurbishment of vital components.
Predicting future submarine availability is inherently
uncertain, particularly beyond its planned life, since manyof its systems and components will have been designedwith that life in mind.
1.8 The Department is undertaking further work to gain abetter understanding of the risks involved in the transition
phase. There are three strands to this work, involving
assessment of the policy, operational and technical elementsof the transition phase. The majority of effort expended thus
far has been on the technical strand. This primarily revolves
around the Vanguard Life Optimisation Programme (VLOP),
designed to examine the planned five-year life extensionof the submarine fleet. As might be expected this far aheadof any life-extension programme, VLOP remains an area ofconsiderable uncertainty, with the potential for rapid costand risk growth.
1.9 The Department’s Chief Strategic Systems
Executive leads the VLOP programme and has spentaround £3 million to date on preparatory studies. As the
programme progresses, he will need to liaise closely withother teams involved in maintaining the current fleet
and bringing the future deterrent into service. It will be
important for the Future Submarines Integrated Project
Team and the Programme Support Office to have a clear
view of all risks emanating from the transition phase inorder to incorporate them in their plans.

1.10 Nuclear activity in the Ministry of Defence iscovered by various acts, including the Health and
Safety at Work Act, the Nuclear Installations Act andthe Radioactive Substances Act, but does have someexemptions. The Defence Nuclear Safety Regulator is
responsible for regulating those areas of exemption andproducing independent reports, although working closelywith the other regulators involved. The Regulator’s viewis that, providing all the issues are considered earlyenough, it should be possible to safely extend the lifeof the Vanguard-class submarines. His view was that
determining the safe life-extension of the nuclear reactor
vessel was likely to be the most critical decision and thatthe Department should undertake a thorough cost-benefit
analysis to show what the full implications of the VLOP
programme might be.

Time constraints from otherareas of the programme
The warhead
1.11 Continuous at sea deterrence also relies on there
being an operational warhead. The existing warhead was
designed and manufactured in the United Kingdom by
the Atomic Weapons Establishment. The Government
explained in the 2006 White Paper that decisions onwhether and how it may be necessary to refurbish thecurrent warhead design are likely to be needed in thenext Parliament. The Department assesses that the current
warhead design is likely to last into the 2020s, although it
does not yet have sufficient information to judge precisely
how long it can be retained in service.
1.12 Detailed work is in hand to review the optimum
life of the existing warhead stockpile and to analyse therange of options that might be available to replace it,which is being conducted within the United Kingdom’scommitments under the Comprehensive Test Ban Treaty.
Some of the work is being undertaken with the UnitedStates under the 1958 United Kingdom-United States
Agreement for Co-operation on the Uses of Atomic Energy
for Mutual Defence purposes.

The United Kingdom’s Future Nuclear Deterrent Capability

13

14

The United Kingdom’s Future Nuclear Deterrent Capability

Source: National Audit Office/Ministry of Defence

Current warhead

Replacement
Trident D5 Missile

Trident D5 Missile
life-extension

Trident D5 Missile

Submarine 4

Submarine 3

Submarine 2

Submarine 1

Successor Class

Submarine 4

Submarine 3

Submarine 2

Submarine 1

Planned life

Dependent on outcome of
warhead life assessments

Vanguard Life
Optimisation
Programme

Extension plans

Decisions on successor
unlikely before 2020’s

08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49

Summary timeline for the replacement of nuclear deterrent capability

Vanguard class3

risk area 1

risk area 1

The missile system

Manning issues

1.13 The United States Government has a programme
to extend the life of the Trident D5 missile to around2042 to match the life of their Ohio-class submarines.
The United Kingdom has committed to participatingin that programme. The new submarines are therefore
likely to remain in service beyond the extended life of
the Trident D5 missile. The Government has said thatdecisions on whether we wish to acquire a successor
to the life-extended D5 missile and what form any
successor might take are unlikely to be necessary until
the 2020s. The Government has also sought and received
assurances from the United States Government that theUnited Kingdom will have the option of participating in
any United States programme to develop a successor to
the Trident D5 missile and that any new missile will becompatible, or be capable of being made compatible,
with the launch system to be installed in the United
Kingdom’s new submarines. The Future Submarines
Integrated Project Team is therefore attempting to ensurethat the current submarine design is capable of being
integrated with these future developments.

1.16 There are currently shortages of various trades, suchas nuclear watchkeepers (those crew members responsible
for the safe operation of the nuclear propulsion plant)
and medical assistants3, within the submarine branchof the Royal Navy. This problem is exacerbated by the
introduction of the future class of submarines, since morecrews will be required to manage the so-called ‘manningbulge’- the transition phase in which crews will be required
to operate both Vanguard and the future class concurrently.

The nuclear reactor
1.14 The timetable may also be affected by developments
in pressurised water reactor technology. The Department
needs to decide if it should use a variant of the current
reactor design – ‘PWR2’ – or develop a new reactor –‘PWR3’ – for the new submarine. There are risks attached
to both of these options. The PWR2 reactor has the benefit
of being based on existing technology, but will still require
some updating to deal with obsolescent components andemerging regulatory requirements.
1.15 The PWR3 proposal offers the prospect of a more
efficient and cheaper reactor through life. This option
nonetheless presents more of an immediate risk to thetimetable, since it will require a major research anddevelopment effort, although work is underway to see how
this risk can be minimised. Whichever option it chooses,
the Department will need to develop it in close cooperation
with the regulatory authorities. The Department beganconsidering propulsion requirements for future submarine
fleets in 2005, independently of the Government’s
consideration of the future of the nuclear deterrent, andlet an initial contract with Rolls-Royce in May 2007.
The reactor design needs to be completed by the middle ofthe next decade, however, if it is not to hold up the rest of
the submarine design.

34

1.17 Possible mitigation actions such as automatingprocesses to reduce crew numbers and introducing
female personnel are likely to have a major impact on
both operating procedures and submarine design andtherefore need to be taken while there is still scope
for their incorporation in the latter. The Royal Navy iscurrently undertaking two studies to determine the likely
impact of this issue. The Royal Navy’s Second Sea Lord is
responsible for all naval crewing issues and is the ownerof this risk, but the Senior Responsible Owner for thedeterrent will have a key role in ensuring that the Royal
Navy’s work is incorporated into the future deterrent
timetable in a timely way.

Infrastructure
1.18 A range of infrastructure is required to support thedeterrent. This includes buildings and specialist facilities
at Devonport, Coulport and Faslane, security and theinfrastructure associated with command and control ofthe submarines. Significant elements of this infrastructure
are required in order for the United Kingdom to comply
with its obligations under the Polaris Sales Agreement.
Many of the existing facilities will be able to support thecurrent deterrent into the 2020s. Further work will be
required to confirm that these facilities are able to support
the future deterrent throughout its planned life, although
the Department’s working assumption is that the futuresubmarine class will be able to use all existing facilities,
suitably modernised and properly maintained.
1.19 In addition, a decision about facilities at the RollsRoyce reactor core manufacturing plant in Derby isrequired in around 2009, with work expected to begin on
the new core in 2012. Whilst this work is not currently
on the critical path, our previous analysis of the D154
project to design and build new and upgraded facilities at
Devonport dockyard shows the risks of cost overruns where
nuclear-related facilities require updating.4 This project

Recruitment and Retention in the Armed Forces, Report by the Comptroller and Auditor-General, HC 1633 I/II 2005-06, 3 November 2006.
The Construction of Nuclear Submarine Facilities at Devonport, Report by the Comptroller and Auditor-General, HC 90 Session 2002-03, 6 December 2002.

The United Kingdom’s Future Nuclear Deterrent Capability

15risk area 1

suffered delays in design and construction work becauseof difficulties in delivering technically challenging
components whilst meeting exacting nuclear safety
standards. As a result, total project costs at the time of ourreport were estimated at £933 million, 31 per cent morethan the approved budget. Rolls-Royce’s view is that the
new manufacturing plant is less complex than the D154
project, although they are aware of the risks involved.
1.20 The Health and Safety Executive’s Nuclear
Installations Inspectorate expressed concern that timepressure could impact negatively on regulation and safety.
They quoted the D154 project as an example of what canhappen if these pressures are not well managed. The Future
Submarines Integrated Project Team is aware of the lessons
from the D154 project and is looking at when to scheduledesign freezes and formal review points with regulators.

Considering time contingency inthe programme to allow for
unforeseen delays
1.21 Time contingency needs to be incorporated into a
programme to allow for optimism bias, particularly if the
programme is complex and has various interdependencies
and relationships with other teams, as is the case with the
future deterrent.
1.22 The Department and its industrial partners are
considering how to build in more time contingency
during the concept and design phase. The submarine
construction programme already contains overlaps
between work strands, meaning that construction willcommence before the design is complete. This overlap has
the potential to save time but could significantly increaserisk. Creating further contingency will be difficult given
the fixed delivery date, placing additional pressure on the
Department and its suppliers to deliver all elements of the
programme on the critical path to time. The Department
is considering a number of different submarine designs
during the concept phase and part of the rationale forselection of one design will be the degree to which it
removes risk from the timetable.

16

The United Kingdom’s Future Nuclear Deterrent Capabilityrisk area 2
2.1 This section considers the challenges involved in theconcept phase and the decisions that have to be taken inorder to keep the programme on track. During the ongoing
concept phase, the Department will make importantdesign and budgetary commitments. The consequenceof not finalising the design will be that the Department
either makes poor decisions or does not coordinate theteams involved to make decisions on time, placing furtherpressure on what is already a challenging schedule.

The challenge of developing
the design specification
2.2 The Department is engaged in a two-year concept
phase to develop the design requirements targeted towards
a submission for Initial Gate approval in September 2009.
In undertaking this work, the Department is considering thefuture deterrent as a capability, not simply an equipment
project to buy a new fleet of submarines. The programmemanagement arrangements for the delivery of the future
deterrent therefore include consideration of aspects suchas manning, training, infrastructure and the procurement ordevelopment of missiles and warheads.
2.3 The key challenge of the concept phase up to 2009is the selection of the principal design parameters of the
new class of submarine. This is a technically complex
undertaking, since it must take into account a number ofdesign constraints or emerging technologies in other areas,
as set out in paragraphs 1.11 to 1.20. Following its own
acquisition principles, the Department will have to plan forevery phase of the submarine’s life, including its eventual
disposal and the decommissioning of its nuclear reactor.

Making decisions about
the design on time
2.4 The programme management of the future deterrent
includes a wide range of internal and external teams, all ofwhom have to be coordinated to keep the programme on
track. They are set out in Box 4.
The wide range of organisations involved represents achallenge for the programme managers, who must balance
efficient decision-making with the need to consult.

BOX 4
Teams involved in the acquisition of the future deterrentnn

The Cabinet Office and Foreign and Commonwealth
Office who, together with the Ministry of Defence, share
responsibility for setting the strategic requirements for thedeterrent. The Cabinet Office provides guidance on United
Kingdom nuclear deterrence policy and related advice
to Ministers.
Various Ministry of Defence teams:nDirector Strategic Requirement;nnuclear policy;ncurrent Trident operations; andn	Integrated Project Teams within the Director General

Submarines cluster, with responsibility for nuclear
weapons, missiles, submarine support, nuclear
propulsion and the Astute submarine programme.
n

n

n

n

A large number of internal and external regulators, ofwhich the most important are the Health and Safety
Executive’s Nuclear Installations Inspectorate, theEnvironment Agency and the Department’s own Nuclear
Safety Regulator.
Industrial suppliers, from major companies to specialist
sub-contractors.
AWE Management Ltd, which operates the two Atomic
Weapons Establishment sites at Aldermaston and Burghfield.
The United States Department of Defense and the UnitedStates Navy.

The United Kingdom’s Future Nuclear Deterrent Capability

17risk area 2

Decision-making in the concept phase
2.5 The high-level requirement for the future deterrent
has been established by the 2006 White Paper (namely,that a submarine-based system should deliver continuousat sea deterrence). Detailed objectives for the two-year
concept phase include capability level study activities,
concept planning, technology and product development
and the engagement of external advice and support.
During the concept phase, the Department is also
leading a cross-government review to undertake a criticalexamination of design options.
2.6 The Department’s Investment Approvals Board has
approved a budget of £309.45 million for the concept
phase work on the submarine platform and propulsion
plant. Approved and actual expenditure is shown in
Box 5. The budget for 2007-08 was underspent because
the Department and its suppliers were unable to agree
contracts as quickly as anticipated. To date the Future
Submarine Integrated Project Team has committed tocontracts to the sum of £79.5 million and the Nuclear
Propulsion Integrated Project Team to contracts to a valueof £86.1 million within the approvals totals, although
clearly not all this expenditure has yet been incurred.
2.7 A detailed timetable exists for the concept phase,based on Initial Gate approval in September 2009 andan interim review point in autumn 2008. During 2008
the concept phase slipped by six weeks. However, thetimetable has been rearranged and the Department isconfident that the concept phase can still be delivered ontime. While this may be possible any further delays will
put significant pressure on the concept phase timetable.

box 5
Approved and actual expenditure to date for theconcept phase£ million

2006-07 2007-08 2008-09 2009-10	Total

Platform
Approval

7.3

26.6

57.6

39.0

130.5

Expenditure

7.3

16.0

16.41

–

–

Approval

9.7

24.6

80.3

64.4

179.0

Expenditure

9.7

22.9

10.01

–

–

Propulsion Plant

Note
1 Sums accrued up to the end of June 2008.

18

The United Kingdom’s Future Nuclear Deterrent Capability

2.8 Despite the clear overall requirement from the White
Paper, there are a number of decisions which need to betaken to design the submarine. Assumptions have been
made about some of these design decisions to allow thedesign process to continue. There are a number of majordecisions scheduled to be taken before the Initial Gate
investment decision in September 2009, some of which
can only be taken in conjunction with the Cabinet Officeand other government departments. They include thefollowing decisions, to be taken before September 2009:n

the design and size of the missile compartment;nthe type of nuclear propulsion plant to be used; andnthe high-level specification of the submarine design,
including major trade-offs.

Failure to make these decisions on time will threaten
the overall programme timetable by increasing technicaland commercial risk. The decision to buy three orfour submarines is not required until the Main Gate
investment decision in 2014.
2.9 There is a judgement to be made about when to fix
the design parameters for the submarine and how much
more options analysis work to undertake first. On the one
hand, the Department is conscious of the tight timescale;on the other, it would be a mistake to finalise the design
too early without knowing enough about the requirement.
Unresolved issues include the size of the missile
compartment, which is a crucial factor in determining theoverall design of the submarine. Following the exampleof the Resolution and Vanguard classes, the Department
is negotiating with the United States on a new common
missile compartment.
2.10 As the Department approaches important
forthcoming decisions on submarine design, theSenior Responsible Owner and the Strategic Deterrent
Programme Board will need to keep these competing
considerations in balance in order to minimise the amountof nugatory work carried out.

risk area 2

Cooperation with theUnited States of America
2.11 There has long been close cooperation between the
United Kingdom and the United States in nuclear matters.
A 2006 exchange of letters between the Prime Ministerand the President of the United States builds on the Polaris
Sales Agreement and other arrangements and has had abeneficial impact on the United Kingdom’s preparation for
the future deterrent. This relationship brings challenges aswell as benefits for the United Kingdom.
2.12 The United States has now approved a programme
to construct a new class of ballistic missile submarines
to replace its current Ohio class. There is an opportunity
for the Ministry of Defence to work towards a similararrangement to those on the Vanguard and Resolution
classes for some components of the submarines and to pay
a proportion of the costs equivalent to the proportion ofsubmarine numbers in the respective fleets. In contrast to
previous submarine programmes, the United Kingdom isahead of the United States, which is both an opportunity
and a risk. It is an opportunity for the Department
to influence the design process as a full partner.
However there is also a risk to the United Kingdom’s
timetable if the United States programme is delayed forany reason. In February 2008, the United Kingdom set up
a programme office in the United States, alongside key
American officials, to facilitate this liaison.

The United Kingdom’s Future Nuclear Deterrent Capability

19risk area 3
3.1 This section describes the complexity of the
programme management arrangements and the challenges
which need to be managed in terms of communication,risk management, scrutiny, regulation and performancemeasurement. The Department is aware of the need to
manage the risk that, because of the large number ofpeople involved, decisions will be made too late, without
vital information or without adequate scrutiny. Otherwise,
it would fail to find the right balance between action,
engagement and accountability and the programme
would be delivered late, over budget or would notmeet requirements.

Progress in establishing decisionmaking arrangements
3.2 Overarching policy-making responsibility forthe future deterrent rests with the Cabinet Office andis exercised through the Nuclear Deterrence Policy
Committee, drawn from the Cabinet Office, the Foreign
and Commonwealth Office and the Ministry of Defence.
The Ministry of Defence has sole responsibility for thedelivery of the future deterrent capability.
3.3 In order to deliver the future deterrent, the Department
has established a series of specific posts and committees.
These include a Senior Responsible Owner (currently
Director General, Equipment), a Strategic Deterrent
Programme Board, a Director Strategic Requirement and a
Capability Planning Group. Figure 4 shows the relationships
between these groups in terms of their responsibilities for the
future deterrent.
3.4 Given the intention to manage the future deterrent asa capability, rather than simply a submarine procurement,
and the need to involve other government departments inthe decision-making process, the delivery arrangements
are inherently complex. Guidance from the Office ofGovernment Commerce suggests that a single point
5

20

Ensuring effective
governance arrangementsof accountability model is advisable in the delivery of
programmes of this size and complexity.5 The future
deterrent is not yet at this stage, since the Department
is still defining the requirements for a fully costed
programme. In addition, this model does not take into
account of the key roles of other government departments
and international and industrial partners.
3.5 In line with established Departmental arrangements,
responsibility for setting requirements and budgets
for equipment capability programmes is based in the
Department’s Equipment Capability Customer area.
Responsibility for delivering the programme rests witha number of Integrated Project Teams in the Defence
Equipment and Support organisation under the directionof the Director General Submarines. As the programmemoves from requirements setting to the full delivery phase,the role of the Senior Responsible Owner will change
from the coordination of decisions to the direction ofdelivery. This has implications for the skills, experience,seniority and time commitment of future post-holders.
3.6 Under the current arrangements, Director General
Equipment, in his role as Senior Responsible Owner, chairs
the Programme Board, is responsible for establishing therequirements for the future deterrent capability and leads
policy advice and finance work strands. He does not,however, have direct line management responsibility forthe other members of the Programme Board and must
therefore work in part by influence and consensus. The
location of the current Senior Responsible Owner in the
Equipment Capability Customer area means that he alreadyallocates the budget for the future submarine programme,
the United Kingdom’s contribution to the Trident D5
missile life extension programme and the programme ofinvestment in facilities and skills at the Atomic Weapons
Establishment (see paragraph 3.20). The Senior Responsible
Owner will, in due course, allocate the budget for all otherprocurement aspects.

http://www.ogc.gov.uk/User_roles_in_the_toolkit_senior_responsible_owner.asp.

The United Kingdom’s Future Nuclear Deterrent Capabilityrisk area 3

3.7 There have already been two changes of Senior
Responsible Owner since the beginning of the
programme, arising from unplanned staff moves. Two of
the three incumbents, including the current post-holder,
have taken on the role in a part-time capacity. Whilst thislatter development reflected the move of the post into thecentre of the Equipment Capability Customer area andprovided some associated benefits, it would be desirable
to improve continuity in such an important post, as
frequent changes have the potential to dilute oversightand coordination.

4

3.8 A number of other senior officials sit on the Strategic
Deterrent Programme Board either because they have linked
policy roles or because they are responsible for related
programmes, such as the operation of the current deterrent
or the management of the programme of investment at theAtomic Weapons Establishment. The Senior Responsible
Owner has recently clarified the roles and responsibilitiesof other Programme Board members in relation to the
future deterrent via a formal programme mandate. Therewas general agreement from all our interviewees that theProgramme Board includes the right people.

The future deterrent programme governance arrangements show the large numbers of people and teams involved
and the complex relationships between them

Defence Board

Chief of Defence Materiel

Defence Nuclear Executive Board

Chief Scientific Adviser

Director General Equipment(Senior Responsible Owner)
Chair of Strategic Deterrent Programme Board

Capability
Manager(Precision
Attack)Director
GeneralSubmarines

Future Submarines IPT

Nuclear
Propulsion IPTStrategic
Systems IPT

Assistant Chiefof Naval Staff

Chief Strategic
Systems Executive

Assistant Chiefof Defence
Staff (Policy)

Director
GeneralStrategic
Technologies

Director
GeneralScrutiny &Analysis

Programme
Support Office

Deterrent Capability
Planning Group(Chaired by the
Director Strategic Requirements)

Director
Strategic
Requirements

NuclearWeapons IPT

Source: Ministry of Defence
NOTE
Posts marked in grey and in the central box are members of the Strategic Deterrent Programme Board. This figure is not intended to and does not necessarilyreflect normal line management relationships.

The United Kingdom’s Future Nuclear Deterrent Capability

21risk area 3

3.9 Our work has identified some challenges to beaddressed as the programme moves forward. These are set
out in Box 6 below.

Regulation and external scrutiny
3.10 A programme of this complexity needs strong
governance. There is a risk that, under the obvious timeand cost pressures, the programme may move forward
without having met all the criteria set out in the project
milestones. As a result, work may be shifted to the rightwhere it would become more expensive or would haveto be done more quickly. In addition to its establishedscrutiny and approvals processes, the Department is
putting in place a variety of internal and external review
processes to mitigate this risk, which are set out in Box 7.
3.11 There are a number of internal and external regulators
involved in the future deterrent programme, whose
responsibility it is to manage equipment and sites involving
nuclear and other hazardous technology. The Department
has a challenge to balance the need for regulation andscrutiny with the risk of cumbersome processes and slow
decision-making and has established a forum to coordinate
regulatory activity and reduce duplication.
3.12 The Health and Safety Executive’s Nuclear
Installations Inspectorate (NII) issues operating licences toindustrial sites supporting the current and future deterrent
programmes, but have no legal responsibility for licensing
the Department’s nuclear submarine reactors. They told usthat they had a very strong relationship with the Atomic
Weapons Establishment, but that their involvement withthe submarine and nuclear reactor teams was less strong.
They also noted that their role in regulating civil nuclear
activity put them in a strong position to share goodpractice and that the Department could make better use of
its cross-sector expertise.

Developing management information
for the programme
3.13 The Department is developing a detailed programmeplan, with high-level objectives and a work breakdown
structure. The Department recognises that there are criticalinterdependencies at a high level between programme
strands and between this and other programmes, such as
the Transforming Submarine Support and Astute submarine
programmes. Although these interdependencies have been
considered, they have not all been mapped out in detail,so the Department is not yet aware of all the critical links
to be managed.

22

The United Kingdom’s Future Nuclear Deterrent Capability

3.14 Metrics and performance measures are important toassess whether or not the programme is on track to deliver
against time, cost and quality targets and to encourageboth a through-life focus and regulatory compliance.
Performance reporting arrangements are gradually being put
in place. In the early stages of the programme, too muchdetail was being reported upwards, without any consistentmeasures being presented. Despite some progress in recent
months in developing a reporting system, it is still not fully
developed and is not yet giving the Senior Responsible
Owner or Programme Board members the information theyneed to take a view on progress.

box 6
Future programme management challenges
n

n

n

n

n

The Programme Board is currently directing the concept
phase as an information/advisory board. It has not yet
been required to come to agreement over difficult decisions
or trade-offs between different elements of the programme.
Decision escalation criteria are being developed. There
are other government departments involved so timely
decision‑making will be paramount.
The size and complexity of the programme means thatthe Department will have to examine the leadershiparrangements as the programme evolves.
Three posts at the same grade share responsibility for thedeterrent programme although the Senior Responsible Ownerhas overall control. There is a risk that this structure could
dilute accountability or lead to cumbersome decision-making.
The Department has not yet decided how arrangements
for the future deterrent will fit with the Trident Management
Committee and other existing deterrent working groups.

box 7
Extant or planned review and reporting mechanisms
n

n

n

n

n

Director Strategic Requirement has established six-weekly
programme reviews.
A client adviser call-off contract has been established for theconcept phase to offer ongoing external scrutiny and advice(see Risk Area 5 for more detail).
The programme is subject to the Office of Government
Commerce gateway review process.
The Department plans regular reports to Parliament once theinitial investment decision has been taken in 2009.
The Treasury’s Major Projects Review Group is planning toreview the programme.

risk area 3

3.15 The approval paper for the concept phase set out
a number of activities to be undertaken. Some of theselack precision, quality definitions or deadlines, making it
more difficult to know if they have been completed in asatisfactory manner. Subsequent to this paper, the Director
Strategic Requirement team provided further detailed
direction on what work should be undertaken to support
key decisions. At the start of the concept phase the Future
Submarines Integrated Project Team was responsible forproviding programme support to the Senior Responsible
Owner and Programme Board. They compiled
detailed schedules of performance, with milestones,
responsibilities and timelines. However, they reported
problems in receiving sufficient timely information fromother teams to allow effective monitoring of progress.
3.16 This and other factors led to the Department
identifying a need for its programme support function to
be more independent. A formal Programme Support Office
was therefore established on 31 March 2008 with all
associated project teams contributing staff. This arrangement
should help establish a clear set of performance indicators
for the deterrent capability as a whole, rather than simply
focusing on the replacement submarines.

Risk management
3.17 Risk management activities are being undertaken
at many levels within this programme. Some of these
activities, for example within individual integrated project
teams, have been in place for some time and are relatively
well established. At the programme level, a detailed
risk register has been produced and risk management
arrangements are being developed, but these are not yet
mature. For example, mitigating activities have not yet
been costed and ‘traffic light’ reporting for the Programme
Board is still being developed.
3.18 Of the risks emanating from these processes,
some are beyond the Department’s immediate control.
One example of these is the relationship with the UnitedStates. The Department is considering how to address thepossible impact of these risks and developing contingency
plans where it is feasible to do so. As the programme
develops, decision-makers should have sufficient
information to be able to make informed decisions should
the risks materialise.

3.19 Other risks are within the Department’s control
and need further mitigation. For example, the Nuclear
Installations Inspectorate has noted that there are a numberof specific health and safety arrangements at the Atomic
Weapons Establishment which should be strengthened.
These include highly enriched uranium facilities andassembly/disassembly buildings and facilities known as‘Gravel Gerties’. Gravel Gerties are facilities designed forthe safe inspection, handling or dismantling of nuclear
weapons. Their name derives from the use of large amountsof gravel which are placed on the roof to reduce thepotential dispersal of contamination from the radioactive
material contained within the warhead in the event of an
accidental detonation of the conventional explosives.
3.20 The Atomic Weapons Establishment is required toaddress the Nuclear Installations Inspectorate’s concerns,
but needs to do so in the context of the Department’s
long-term plans for the estate. The Department recognisesthat it needs to decide which facilities will be requiredin the long-term to sustain the United Kingdom’s nuclear
weapons capability. There is a programme of investment
in sustaining key skills and facilities at the Atomic
Weapons Establishment (the Nuclear Warhead Capability
Sustainment Programme), which commenced in 2005.
This programme will enable the Department to makedecisions about whether buildings should be refurbished,replaced or demolished.

Communications between the
Department and partner organisations
3.21 The Department has made good progress in
identifying and engaging key partners, many of whom are
involved in the programme via committee memberships,
official forums, joint teams, secondments and informal
consultations. Communications between the different
groups involved in the future deterrent seem to be working
well at the programme level.

The United Kingdom’s Future Nuclear Deterrent Capability

23risk area 3

3.22 Some improvements could be made at the working
level. The Department’s co-location of the Future
Submarines Integrated Project Team from several separate
sites was slow to happen but has now taken place in the
Defence Equipment and Support site in Abbey Wood.
Given the large volumes of technical information which
are beginning to flow between the Department’s sites,industrial partners and the United States, there is a needfor secure video conferencing and an IT infrastructure thatallows large volumes of information to be passed securely
and quickly.
3.23 The future deterrent programme team are keen tolearn from experience. Arrangements have been put inplace to learn lessons from the Astute submarine andTrident nuclear deterrent programmes. These include
dissemination of lessons learnt papers, the interchange ofstaff and the use of learning logs, joint meetings and study
days. One example was a ‘Learning from Experience’seminar held on 18 October 2007 with many retired
officials from the Trident programme. This seminar
highlighted, among other things, the need for clear roles
and responsibilities, the lack of suitably qualified andexperienced staff and the need for close collaboration
with the industry.
3.24 Given the wide range of cooperation with theUnited States, there are inevitably multiple points ofcontact between the United Kingdom and the UnitedStates. As a result, there is a risk that the United States
may be receiving different messages from different partsof Government. The Department is therefore working on
a communications plan to agree key messages. The plan
will seek to make the best use of existing channels ofcommunication, set up under the Polaris Sales Agreement
and the 1958 Mutual Defence Agreement.

24

The United Kingdom’s Future Nuclear Deterrent Capabilityrisk area 4
4.1 This section considers the budget for the future
deterrent capability, and the arrangements being
introduced to manage this budget. The sums involved inthis programme are considerable and the money is being
spent by several different teams. If the programme is not
managed effectively, there will be a risk that that decisionmakers will not have the financial information they require
to manage the programme effectively as a capability.

Improving the White Paper
cost estimates
4.2 The Government’s 2006 White Paper provided an
initial estimate for the costs of sustaining the nation’s
deterrent capability. The estimates for the ballistic
submarine option were developed using cost data from theexisting deterrent capability. The Department carried out aprobability analysis and an assessment of risk to arrive at a
likely range of costs. The Department, the Treasury and the
Cabinet Office carried out a further review and concluded
that the acquisition cost for a four‑boat submarine option
would be between £15 billion and £20 billion in 2006‑07
prices. This cost estimate would be divided between thesubmarines (£11-14 billion), support infrastructure throughlife (£2-3 billion) and the replacement of the warhead
should that be necessary (£2-3 billion).

Developing a robust
budget and exerting
financial control
4.4 In addition to the acquisition costs and in-service
costs, the Department has also estimated that there will
be some ‘preparatory and enabling’ costs associatedwith maintaining or extending the existing deterrent anddeveloping future systems. The Department estimates thatthese costs will amount to some £2 billion in 2006-07
prices. Among other things, these costs cover:nnnelements of the Nuclear Warhead Capability
Sustainment Programme at the Atomic
Weapons Establishment;
the Vanguard Life Optimisation Programme
required to extend the life of the current submarine
fleet until the successor submarine is ready. In
previous evidence to Parliament, the Department
suggested that the costs of this programme could
be in the order of hundreds of millions for the four
submarines, although it has yet to produce detailed
cost estimates;6 andthe Trident D5 life extension programme, at a cost ofsome £250 million.

The Department considers that the cost of any new missile
design, to replace the Trident D5 when it reaches the endof its life-extended service, would be incurred from the2030s and that any estimate of cost at this stage would behighly speculative.

4.3 The planned £15-20 billion acquisition cost does notinclude all of the likely costs associated with the future
deterrent capability. The White Paper noted that in-service
support costs for the future deterrent would be similar
to the current deterrent, equivalent to between five andsix percent of the defence budget each year, but did notquantify those costs.

6

The Future of the UK’s Strategic Nuclear Deterrent: the White Paper, House of Commons Defence Select Committee, HC 225-I, Ninth Report, 7 March 2007,
paragraph 142.

The United Kingdom’s Future Nuclear Deterrent Capability

25risk area 4

4.5 The Department accepts that the White Paper costestimates are not sufficiently robust to provide:an accurate baseline against which progress can bemeasured and budgetary control exercised;na sufficiently detailed cost model which can be used
to manage cash flow and make informed decisions
about the balance between time, cost and capability
constraints; orn

4.6 The White Paper stated that procurement costs
would need to be refined as work on the concept
phase is taken forward. This work is underway, but until
some of the key design decisions set out in Risk Area 2of this report are taken, it will inevitably be difficult.
The Department is planning to announce more accurate
cost estimates to Parliament at the end of the concept
phase in autumn 2009. Remaining major areas of
uncertainty are set out in Box 8 below.

confidence among suppliers that sufficient funding
will be available to support their investment in
the programme.

n

box 8
Future deterrent cost estimates – major areas of uncertainty
Inflation: The cost estimates have been produced in 2006-07
prices. A ten-year cash flow estimate was produced for thelatest spending round using a range of indices. The estimate
for the submarine used an index of 3.5 per cent, based on theexample of the Astute submarine project. The Department isplanning to develop more accurate cash flow forecasts using
more appropriate indices tailored to each category of expenditure(such as labour and steel). These would enhance the Department’s
capacity to manage cash flow effectively and provide assurance
that funds will be available to meet commitments as they fall due.
Inevitably, cash flow estimates in the near future will be morecertain than longer-term estimates.
Value Added Tax: The existing cost estimates exclude a provision
for Value Added Tax. The Department has assumed that Value
Added Tax relating to submarine construction will be recoverable
in keeping with the tax treatment of the Astute programme. The tax
treatment of the programme as a whole is yet to be determined.
Comparability of Vanguard costs: Future deterrent cost estimates
were based on the cost of the existing deterrent system. The
existing system provides a useful starting-point for budgeting
purposes but more detailed analysis is required to take into
account differences between the two systems. For example:nnvariations in the operational requirement;
developments in the submarine industry and expected
profit margins;nfluctuations in the cost of materials; andnvariations in dollar/sterling exchange rates.

Design specification and assumptions: The existing cost estimatesare based on assumptions which could change during the concept
phase as the Department develops the design specification. One
example is the assumption that the United Kingdom submarine
industry will be sustainable and that the costs of supporting it will
not fall on the future deterrent programme.
Exchange rates: The Department is planning to source a rangeof components from the United States. Existing cost estimatesassume that future exchange rates between the dollar and thepound will remain constant over the life of the programme.
It would be misleading to attempt to predict exchange rate
movements over the entire programme but there is the potential
for currency fluctuations in the short to medium term to pose a risk
to affordability.
Contingency: Treasury guidance recommends that budgets for
major projects should be adjusted to include a contingency toallow for the observed systematic tendency for the costs to beunderestimated.1 Existing cost estimates for the future deterrent
are expressed as a range to reflect the uncertainty attached to thebudget at this early stage of the programme. There is a risk thatthe existing estimates do not allow sufficient contingency. The costestimate at the high end of the £15-20 billion figure provided by
the Department was calculated by taking the 90 per cent estimate
for individual projects in the programme plus an additional sum
reflecting a judgement of programme risk (some of which included
interdependency risk where this could be estimated). To the extent
that this contingency does not fully take into account the risks arisingfrom interdependencies in the programme it may not be sufficient.

The Department is now planning to produce a ‘bottom up’estimate based on detailed engineering analysis.
NOTE
1 The Green Book: Appraisal and Evaluation in Central Government, HM Treasury, 2007.

26

The United Kingdom’s Future Nuclear Deterrent Capabilityrisk area 4

Risks from existing budgetarycontrol mechanisms

4.9 These arrangements give rise to the following risks:n

4.7 The Department is setting up three separate but
linked cost models – covering submarine, capability
and enterprise costs. Each of these models is importantto provide accurate data on the costs of the submarine
design, the overall programme costs and the likely
industrial cost base. Ensuring that the links between eachmodel work well will be important to mitigate the risk thatdata held in each one becomes inconsistent and therefore
gives divergent pictures.
n

4.8 The programme is subject to the standard Ministryof Defence expenditure control mechanisms. Funding
is authorised by the Senior Responsible Owner andallocated to the various Integrated Project Teams
responsible for delivering different elements of the
programme. Financial controllers in each of the Integrated
Project Teams are responsible for management accounting
and financial reporting. They produce budget forecasts,monitor expenditure against budget, manage cash flow
and provide assurance on financial regularity. During
the concept phase funding has been allocated to Future
Submarines and Nuclear Propulsion project teams
although more project teams will receive funding as the
programme progresses. In addition, the Senior Responsible
Owner continues to allocate funding for the full costs of
the Nuclear Weapons Capability Sustainment Programme,
at a cost of around £2.65 billion from 2008‑09
to 2010‑11.

the Senior Responsible Owner is able to request
information from each of the project teams on
financial performance. This information is drawn
from a number of sources, with a risk of causing
delays. There could also be a lack of consistency inthe data, particularly as the programme becomes
more complex. The recent appointment of a financial
controller in the Programme Support Office,reporting to Director Strategic Requirement’s team,should help mitigate this risk; andproject teams responsible for managing aspects ofthe future deterrent programme are also responsible
for managing other programmes. There will
inevitably be some grey areas, such as the allocationof the industrial overhead and development costs for
propulsion. As with all similar arrangements in the
Department, there is a risk that in-year managementof funding between cost categories and programmes
may obscure the lines of accountability andbudgetary control, as well as potentially diminishing
the funding available for the deterrent programme.

4.10 When the existing deterrent was procured asingle financial controller was responsible for in-year
expenditure. A similar system would help to mitigate therisks highlighted above but is not compatible with the
Department’s financial control arrangements whereby
each individual project team has its own financial
controller. The Director General Submarines is however
responsible for managing in-year expenditure for thewhole cluster of project teams within his managementarea, including those for support to in-service submarines
and the Astute programme. In addition, a financial
controller in the newly formed Programme Support Office(which works for Director Strategic Requirement andthe Senior Responsible Owner) will pull together in-year
expenditure so that the Senior Responsible Owner and
the Programme Board have oversight of the coordinatedpicture of in-year spending on the deterrent.

The United Kingdom’s Future Nuclear Deterrent Capability

27risk area 5
5.1 This section considers the issues the Department
faces in buying and supporting the principal equipment
elements of the future deterrent. It sets out the importanceof creating the right incentives for monopoly suppliers
to deliver to time and budget and notes the additional
problem of widespread skill shortages. Failure to manage
these issues is likely to lead to cost and time overruns.

The nature of the industrial base
5.2 The 2005 Defence Industrial Strategy7 establishedthe principle that, for the foreseeable future, the United
Kingdom would retain all of those capabilities uniqueto submarines and their nuclear reactors, to enable
their design, development, build, support, operationand decommissioning. Suppliers of submarine, nuclear
propulsion and other equipment constitute a highly
specialised industrial sector whose sustainability requires
careful management. The industry is made up of a numberof monopoly suppliers, including BAE Systems andRolls‑Royce, the likely suppliers for the future submarine
class and nuclear reactor respectively.
5.3 This sector is dependent on a sufficient andcontinuous flow of Ministry of Defence business tomaintain submarine-building capacity and preserve therelevant specialist skills. The effect of not managing thisflow effectively is shown by the ongoing Astute submarine
programme which suffered from a gap in production
between the Vanguard and Astute classes. This led toindustrial decline and meant that the Astute programmebore the cost and timescale implications of restoring theskills base and infrastructure to build submarines. One
assumption of the future deterrent programme is that theUnited Kingdom submarine industry will be sustainable
and that the costs of supporting it will not fall directly on
the future deterrent programme.

728

Defence Industrial Strategy, Cm 6697, December 2005.

The United Kingdom’s Future Nuclear Deterrent Capability

Applying effective
procurement practices
5.4 The Department’s submarine build programme isdesigned to ensure that there is no gap between Astuteand the future deterrent. The Department intends tocontinue monitoring this risk to ensure that there is
no recurrence of the damaging consequences of thesignificant gap in production that occurred between
Vanguard and Astute. The Department will also use theopportunities presented by the Astute programme tosave money and de-risk new technology for the future
deterrent. In addition, as delivery of the Astute programme
builds submarine manufacturing skills and capability,
confidence should grow among government and industry
partners that the future deterrent will be delivered on time
and to budget.
5.5 In addition to the challenges of procurement
within the United Kingdom, the Department is planningto source a range of components from the UnitedStates and draw on American technical expertise andinformation. The procurement challenges associated withthis procurement route are entirely different. While theDepartment can in some cases gain considerable savings
from being part of much larger United States orders, it may
have less control over the specification of requirements
and the delivery timetable. The Department will have tofactor this unpredictability into its planning.

Creating incentives for industry todeliver to time, cost and quality
5.6 In addition to being bound to its monopoly
suppliers, the Department has disclosed the forecast
acquisition cost and set a deadline for the entry into
service of the first of the new submarines which cannot be
missed if continuous at sea deterrence is to be maintained.
This gives the Department little manoeuvre in contractual
negotiations with its suppliers.

risk area 5

5.7 In order to deal with this challenge, the Department
must undertake a range of actions. The first is thedevelopment of a commercial strategy for the acquisitionand support of the future deterrent. Whilst some work
has been done, including the production of an initial
timetable, this work is not yet complete and significant
actions are still to be completed before the Initial
Gate investment decision in September 2009. These
include formulating the Department’s approach to risk
and incentives, payment mechanisms, establishing anegotiation strategy and undertaking initial discussions
with suppliers. As it stands, there is no single
document which sets out convincing evidence of how
the Department intends to assure value for moneyfrom its suppliers throughout the life of the project.
The Department is aware of this and the Defence
Commercial Director is leading the Department’s efforts
to draw one up.
5.8 The Department’s commercial strategy will needto consider second tier suppliers as well as prime
contractors. Many of the sub-contractors are alsomonopoly suppliers. The Department is engaging second
tier suppliers in a key supplier forum, designed tohighlight opportunities to make cost-effective changes
either to the design or to the programme. In addition, theDepartment has established a Supply Chain Council toengage and manage lower level sub-contractors known astier 2 and tier 3 suppliers.
5.9 The Department is also in dialogue with themaritime industrial base as regards the whole of theUnited Kingdom’s submarine programme. In order tomanage this coherently, the Department is in the earlystages of establishing a Submarine Enterprise Collaborative
Agreement between the principal industrial suppliers:
BAE Systems, Rolls-Royce and Babcock Marine. Throughthe agreement the Department is seeking to deliver,design, build, support and dispose of nuclear submarine
platforms, so that unique skills and resources may be
maintained within the United Kingdom submarine
industrial base.
5.10 The Department’s intention is that the agreement
will create an open commercial environment throughcollaboration between the key industry suppliers.
Work towards an agreement is at an early stage andthe Department plans to have prepared a business caseto support the initial stage of the agreement by theend of 2008. The Department will need to coordinate
commercial work on the deterrent with progress on theagreement if it is to maximise the benefits to itself and
to industry.

Mitigating monopoly supplier risks
5.11 There is no single means of eradicating monopoly
supplier risk. There are, however, a number of measures
which can minimise that risk and incentivise performancethrough the life of the project. These include, but are notconfined to, the following: effective performance targets
which focus on delivering cost-effective through-life
capability and avoid a short-term focus; ensuring clarity
over who owns which financial risks; agreeing provisions
to resolve disputes quickly; gain/pain-sharing provisions in
the contract; and managing performance in the context ofthe overall supplier relationship.
5.12 Effective partnerships will also be vital to the successof the future deterrent programme. Some typical featuresof strong partnerships include co-location of project
teams, transparent relationships, regular independent
assessments of the client-contractor relationship, strong
arrangements for dispute resolution and clear allocationof responsibilities. Again, this is not intended to be aprescriptive or exhaustive list, but these kinds of measures
should help build the strong, long-lasting partnerships thatthe Department needs for this programme.
5.13 The relationship between the Department and thevarious industrial partners is a positive one at this pointin the programme, with a strong sense of collaboration.
Rolls-Royce and BAE Systems have seconded staff into
the Nuclear Propulsion and Future Submarines Integrated
Project Teams and both companies told us that theirrelationships with the Department were working well.
5.14 Sustaining and further developing these strong
working relationships is important to the successful
delivery and support of the future deterrent. Within thiscontext, the onus will be on the Department to ensure its
staff have the necessary commercial, financial, technical,
and project management skills to be able to act as anintelligent customer. It will also need to establish effective
procedures to ensure that those suppliers represented
within the Department’s teams cannot exert undue
influence which might undermine the cost-effective
spending of public money.

The United Kingdom’s Future Nuclear Deterrent Capability

29risk area 5

Addressing skills shortages
5.15 The Department and industry have identified askills shortage in terms of submarine-building expertise
as well as nuclear-related experience and programmemanagement, commercial and financial expertise. This
shortage is particularly evident in the nuclear propulsion
area, where the Integrated Project Team expressed realconcerns about their ability to act as a smart customer.
The United Kingdom’s resurgent civil nuclear industry
increases the likelihood of a skills shortage.
5.16 In addition, a notable lesson from the Astutesubmarine programme was that the Department should
only transfer to industry those risks which the latter iscapable of dealing with. In response, the Department
plans to act as design authority for the future deterrent,
meaning that they will take responsibility for the key
design decisions throughout the construction of the futuresubmarine. The Department are aware that they willneed to develop the necessary technical skills to do so
effectively, but are still in the early stages.
5.17 The Department has plans to address these shortages.
Studies are underway within the Future Submarines
Integrated Project Team to assess the skills needed in termsof suitably qualified and experienced personnel. A rangeof collaborative actions are also under way, including theestablishment of joint teams, secondments and the use ofstaff from the Astute Integrated Project Team. In addition,
the Department is making use of consultancy support.
The Department has procured the services of clientadvisers under two separate call-off contracts to provide
commercial and technical advice during the concept
phase. It has spent £1.25 million and £350,000 under thecommercial and technical contracts so far, against contract
approvals of £2 million and £3.74 million respectively.

30

The United Kingdom’s Future Nuclear Deterrent Capability

5.18 Lessons can be learnt from the Atomic Weapons
Establishment which identified a similar shortage ofexpertise a few years ago and has taken steps to address it.
The Atomic Weapons Establishment took a long-term viewof their staffing requirements based on work scheduled
under the Nuclear Warhead Capability Sustainment
Programme. They also modified their overall work
programme with a capped annual growth figure to ensurethat work and human resource were matched. In addition
to this overarching planning effort, particular schemes
such as skilled apprenticeships have helped to deliver theskills required.

Appendix one
Scope of the study1
In undertaking this study we were seeking todetermine whether the Ministry of Defence is well placed
to deliver on time and to budget a future nuclear deterrent
that meets the stated requirements.

Methodology
2
n

n

n

We undertook an Issue Analysis examining:whether the Department has made good progressdeveloping the plan for the future deterrent;
whether the Department has the skills and resources
to deliver the future deterrent; andwhether effective governance arrangements are inplace to deliver the future deterrent.

3
We carried out a review of programme management
good practice, drawing together good practice identified
by the NAO and others to help develop the interview
questions and inform our assessment of the governanceand programme management arrangements. We also
reviewed previous National Audit Office work on the
Astute submarine programme and the D154 project.

Study methodology
4
In collecting evidence in support of our findings weinterviewed individuals from a number of organisations.
Box 9 overleaf sets out the list of people or organisations
interviewed for this study. The interviews identified majorrisks to successful delivery, assessed the Department’s
progress to date and considered the arrangements in place
to deliver the future deterrent successfully.
5
We attended a number of meetings of the
Department’s Strategic Deterrent Programme Board andCapability Planning Group in the capacity of observers
to monitor progress to date, identify major issues andrisks and assess whether governance arrangements were
working well.
6
We conducted a file review of the Department’s
documents, including policy papers, approvals papers, risk
registers, cost plans, Strategic Deterrent Programme Board
papers and working documents.

The United Kingdom’s Future Nuclear Deterrent Capability

31

appendix onebox 9Study Interviewees

Director, Chemical Biological Radiological and Nuclear Policy

Ministry of Defence

Director General Equipment – Programme Senior
Responsible Owner

Submarine Support Integrated Project Team
Future Submarines Integrated Project Team
Attack Submarines Integrated Project Team
Nuclear Propulsion Integrated Project Team
Nuclear Weapons Integrated Project Team
Chief Strategic Systems Executive
Director Submarines
Director General, Submarines

Director of Equipment Capability (Deterrent)
Director of Equipment Capability (Under Water Effects)
Other Government Departments
Cabinet Office
HM Treasury
Foreign and Commonwealth Office

Defence Nuclear Safety Regulator

Third Parties

Director Strategic Requirement

Nuclear Installations Inspectorate, Health and Safety Executive

Director General, Strategic Technologies

Atomic Weapons Establishment Management Limited

Defence Commercial Director

BAE Systems plc

Staff representing the Assistant Chief of Naval Staff

Rolls Royce plc

Assistant Chief of Defence Staff (Policy)

32

Capability Manager (Precision Attack)

The United Kingdom’s Future Nuclear Deterrent Capability

glossary
Approval

The formal decision that a project should proceed to the next stage in theacquisition cycle, taken by an authorised approvals authority. For major
projects, this is usually the Investment Approvals Board. At Main Gate theapproval sets parameters for the project’s cost, time and performance. The
project cannot exceed these parameters without returning to the Investment
Approvals Board for further approval.

Assessment Phase

The second phase in the acquisition cycle after the concept phase, beginningwith Initial Gate. The aim of the Assessment Phase is to develop anunderstanding of options for meeting the requirement that is sufficiently mature
to enable selection of a preferred solution and identification, quantificationand mitigation of the risks associated with that solution. At the end of theAssessment Phase a Business Case is submitted to the Investment Approvals
Board for Main Gate Approval.

Business Case

The documentation submitted to the Investment Approvals Board at Initial Gate
or Main Gate, making the case for proposed expenditure on the next phases ofthe project.

Concept Phase

The first phase in the acquisition cycle, in which the aim is to produce astatement of the user’s required outputs, form a delivery team, initiate industry
involvement and start to identify the cost, time and performance boundaries.

Continuous at sea deterrence

The policy of ensuring that at least one nuclear-armed submarine is on patrol at
any one time.

Defence Equipment and Support

Officially formed on 1 April 2007 from the merger of the Defence Procurement
Agency and the Defence Logistics Organisation. It equips and supports theUnited Kingdom’s armed forces for current and future operations, including
equipment and services ranging from ships, aircraft, vehicles and weapons, toelectronic systems and information systems.

Defence Industrial Strategy

The United Kingdom Defence Industrial Strategy was announced on
15 December 2005 and is aimed at ensuring that the Armed Forces areprovided with the equipment that they require, on time, and at best value
for money. Part of this is the requirement to procure from a sustainableindustrial base that retains within the United Kingdom those industrial
capabilities that are required from a national security perspective, to ensure theappropriate sovereignty.

Design Authority

An organisation appointed to be responsible for a design or modification of adesign to approved specifications, and for signing the Certificate of Design.

The United Kingdom’s Future Nuclear Deterrent Capability

33

glossary

Initial Gate

The approval point preceding the Assessment Phase. At Initial Gate, a Business
Case is put to the Investment Approvals Board to confirm that there is a wellconstructed plan for the Assessment Phase that gives reasonable confidence
that there are flexible solutions within the time, cost and performance envelope
the Equipment Capability Customer has proposed.

In-Service Date

The definition varies between defence projects. The planned In-Service Date forthe future submarine class is 2024 and represents the successful conclusion ofsea trials for the first of the four submarines.

Integrated Project Team (IPT)

A team of civilian and military personnel responsible for managing any elementof defence equipment from concept to disposal. All Integrated Project Teams
are part of the Defence Equipment and Support organisation.

Investment Approvals Board

The Departmental body responsible for the approval of investment in major
projects at Initial Gate and Main Gate. The Investment Approvals Board
comprises the Vice Chief of Defence Staff, the second Permanent Under
Secretary, the Chief of Defence Materiel and the Defence Commercial Director
and is chaired by the Chief Scientific Adviser. Projects below specified
values (£400 million in the case of equipment projects) may be approved bysubordinate approvals authorities.

Key User Requirements

These outline the requirements which are considered to be critical to theachievement of the mission and are used to measure project performance.
The Department recommends up to ten be defined for each project.

Lines of Development

Lines of Development provide a mechanism for coordinating the paralleldevelopment of different aspects of capability that need to be brought together
to create a real military capability. These aspects are: training, equipment,
personnel, information, concepts and doctrine, organisation, infrastructure
and logistics.

Main Gate

The point at the end of the Assessment Phase when the decision to proceedwith the project is made. At Main Gate the Business Case presented to theInvestment Approvals Board recommends a single technical and procurement
option. By Main Gate, risk should have been reduced to the extent that theEquipment Capability Customer and Integrated Project Team can, with a highdegree of confidence, undertake to deliver the project to narrowly definedtime, cost (procurement and whole-life) and performance parameters.

Programme Support Office

An office established on 31 March 2008 to provide support to the Senior
Responsible Owner and Strategic Deterrent Programme Board.

Senior Responsible Owner

The Senior Responsible Owner (SRO) is accountable to the DefenceManagement Board for the integration of the total capability within aprogramme; for fully exploiting the potential of the business or capabilitychange; and for the benefits delivered through life.

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