The Type 45 example distinguishes development expenditure from the cost of building each ship. Using a roughly £6 billion program total and £400 million per ship, the answer allocates £2.4 billion to six ships and the remaining £3.6 billion to development and research. Those are the figures used in the discussion. The argument is that contractors defend development programs particularly strongly because that work is more profitable, while production attracts less lobbying once development income has been earned. Government then cuts the production run to make short-term savings just when the navy should receive more ships. The result spreads earlier investment across fewer hulls and leaves promises of future capability in place of current fleet numbers.
Notable Point · 2:16:23-2:18:50
Why cutting Type 45 production wasted development investment
The Type 45 example argues that contractors have stronger incentives to protect development spending than the production run that supplies the navy's ships.