Two projects are underway in government to enhance national resilience in the light of the Covid-10 pandemic. The virus has shone a bright light on sovereign and international resilience as well as accelerated trends in technology, security and resilience.
Integrated Review
The first of these projects is the Integrated Review which is due to report in the autumn. The review offers an opportunity to design how we use national and international capabilities to help build UK resilience and drive our economy beyond the pandemic.
According the principal author in the Cabinet Office, ‘the Integrated Review will define the government’s ambition for the UK’s role in the world and the long-term strategic aims for our national security and foreign policy, setting out the way in which we will be a problem-solving and burden-sharing nation. It will set a strong direction for recovery from Covid-19, at home and overseas, so that together we can ‘build back better’. Increasing our collective domestic resilience will, of course, be a key consideration of the review as a whole.’ Resilience is defined as being able to anticipate, deter, withstand, respond, recover.
The review is expected to highlight the need to reduce fragility in order to minimise harm from both national and international threats, including pre- and post-conflict. This will hopefully see better cross-government, cross-departmental collaboration, as well as work closely with international partners and organisations. The public-private engagement over vaccine development for SARS-CoV-2 has been a mark of such collaboration.
There is clearly a need for a ‘whole of society’ response here. This will involve a broader interpretation of the critical national infrastructure. It may require legislation such as a re-examination of the CCA (2004), enhanced reporting by organisations, better education, diversifying supply chains as well as possibly more onshoring, and greater planning and exercising in more risk areas to mention a few. It may also involve creating a reserve force. All that has an associated cost but it is a way of creating additional capacity. The government can lead in these developments but it needs to ensure the burden is spread across society.
Project Defend
A second review called Project Defend – this time conducted by the Department for Trade and Industry and begun in May – is looking at plans to diversify the UK’s imports of critical goods, including pharmaceuticals and PPE, as it plans to end the country’s reliance on supply from China and strengthen national security after the pandemic.
The new approach will identify key economic vulnerabilities with the aim of ensuring critical supply lines are no longer dependent on individual countries for non-food essentials. The pandemic has revealed how global supply chains are only as strong as the weakest link and this is prompting a move from low-cost, overseas production towards the localisation of manufacturing.
The call for the ‘repatriation’ of manufacturing is particularly strong for critical pharmaceutical products. The majority of generic drugs sold in the UK have a complex multinational supply chain with about 70% of active pharmaceutical ingredients (APIs) made in China and the majority of manufacturing and packaging done in India. Overall, 80-90% of the UK’s supply of generic medicines are imported. (See Resilience First’s news item here.)
The Challenge
To assume self-reliance in all key products, often where there is no natural resource for basic commodities, would be a tall even unrealistic requirement. It could also not be very resilient if major disruption were to occur to the domestic market. Perhaps, a better approach would be to establish multiple or parallel supply chains that take advantage of both the low cost of production overseas as well as the responsiveness of being close to the home market. When a crisis occurs, production volumes could be quickly scaled up domestically but they would not be total reliant on overseas deliveries.
Certainly, the localised part of the supply chain will require advanced manufacturing technologies to counteract the higher labour costs associated with UK-based manufacturing. Grants and other incentives may help but a rethink of the low-cost, rapid-delivery production models is required.
Enhancing sovereign resilience also involves moving away from efficient just-in-time supply chains to more expensive just-in-case ones. In the current crisis, this may take the form of large stockpiles of PPE that are kept in date but dispersed around the country. Commercial organisations have already made general moves in this direction in advance of Brexit but now the situation is even more urgent. Such resourcing comes at a price but when considered against the cost of the crisis like the pandemic then the cost is relatively small. Ultimately, it will be consumer or taxpayer who has to pay for greater resilience.
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