The government faces a difficult balancing act when it comes to defence procurement, writes Bill Kincaid, but sensible solutions are possible

The UK is subject to two powerful gravitational pulls: US and Europe. The government wants closer integration with Europe, but more and more Britons seem to resistant to the idea, while industry pursues its relations with the US if that is where it sees the greatest pay-off for its shareholders. In terms of defence equipment procurement, policy seems less than coherent.

Equipment collaboration is not a new idea. For 50 years we have struggled within NATO to harmonise military requirements and to write NATO equipment requirements. Very few NATO projects have reached maturity, although some have spawned bi-, tri- or multi-national projects outside its authority. Here, there have been some successes: the Jaguar aircraft, the Anglo-French helicopter projects and the Anglo-German M3 bridging equipment.

However, many collaborative programmes, even if they have been successfully brought into service with several European nations, have been subject to huge cost overruns and lengthy delays. For example: the Typhoon (Eurofighter) is five years late and many billions of euros over budget; the Cobra counter-battery radar is 11 years late; and the anti-tank missile Trigat was more than eight years late when UK pulled out.

Collaborative projects, in theory, save money – development costs are shared and production costs are reduced through longer production runs. However, time is money and lengthy delays may well cancel out any savings, and more. So, if it does not save money and may actually cost more, why would any sensible government want to collaborate?

The strongest reason seems to be political – for the UK to be seen to be at the heart of Europe. At the launch of the Smart Procurement Initiative in 1998, ministers stated that the proportion of projects to be procured collaboratively with Europe should rise to 40 per cent.

Nine months later, the UK pulled out of the Horizon frigate programme. More collaboration is still the political aim, but it seems to be difficult to achieve while the Treasury (and presumably the electorate) prefers value-for-money.

The UK enthusiastically supported the formation in 1999 of OCCAR, the European procurement agency for collaborative projects. OCCAR is run as a business, but it is not independent of the collaborating nations and it remains to be seen whether their views and processes will prevent it operating as efficiently as it should.

Complete harmonisation of requirements and timescales are not usually achievable, national processes remain very different and decision-making points and levels vary widely between nations. There are considerable challenges here.

But there is the other powerful pull – the US. That is where the money is, and that is where much of the leading-edge technology is being developed. To both MoD procurers and UK businesses, collaboration with the US is very attractive and, on value-for-money terms, the easiest business case to make.

The Iraq war has brought UK and US politicians closer together and the favoured relationship within the Joint Strike Fighter programme may well encourage other such UK-US ventures.

Europhiles, however, will want answers to many questions. Will US leading-edge technology really be exported to collaborating nations? Will UK equipment incorporating US technology be subject to US veto on its use? Will UK industrial capabilities be eroded?

All these, and many others, are good questions without, as yet, any clear answers. Certainly, there are dangers to be confronted.

But is a whole-hearted rejection of the US in favour of European collaboration any rosier a prospect?

US spending on defence research and development (R&D) is many times higher than European spending, which suggests that, in many areas, Europe will find it less and less easy to compete with US technology, and harder and harder to develop defence systems that compete successfully with US systems in the export market. A "fortress Europe" mentality must eventually be self-defeating.

So what is the answer? The government seems to be trying to straddle the divide by collaborating with both US and Europe. Whether this is a feasible, long-term strategy is debatable.

Dividing the small amount we spend on R&D between US and European collaboration would seem to be diluting the strength of UK collaboration with each, with Europe perceiving UK political rhetoric as hollow, while the growing imbalance between the UK and the US giant making joint projects of less and less value to the UK defence industrial base.

It seems that, while exclusive collaboration within Europe might condemn us to acquiring high-price, low-tech defence systems that will not compete in the export market, extensive collaboration with the US, as well as the favoured two-way approach, might lead to the destruction of our indigenous industrial base by US industrial giants.

Is it a choice of the devil or the deep-blue sea? Not quite, for there is an alternative route. The UK-French Storm Shadow/Scalp EG stand-off missile is perhaps an indicator of the best way ahead. In this project, missile company MBDA was responsible for harmonising requirements and timescales and for proposing an attractive package to each government.

There was no government-to-government collaboration and no government bureaucracy and delay. The project came in within a month of the target date and to cost. As the UK team leader said: "The programme set a new template for international co-operation which did not involve the bureaucracy and complex decision-making processes inherent in traditional collaborative projects."

This approach should deliver programmes to time and budget, while at the same time achieving savings through sharing of development costs and longer production runs. In other words, international equipment collaboration without the tears.

Bill Kincaid is editor of RUSI Defence Systems and author of the Dinosaur series of books on defence procurement

Click here to choose another article on EU defence cooperation.