Examination of Witnesses(Questions 120-131)
MR SIMON
WEBB CBE, MR
BRUCE MANN
AND MAJOR
GENERAL ROB
FULTON
WEDNESDAY 16 OCTOBER 2002
120. You did suggest all navy equipment is being
considered.
(Mr Webb) Well, all armed forces equipment.
121. I did not think that was very helpful for
your marketing on the sales side of the MoD to try and salvage
Sheffield. That recommendation from the Secretary of State
would not help you and encourage people to seriously consider
buying it. Could I ask you what other programmes are seriously
being considered now for cutbacks? Are you cutting back on your
ability to allow the fleet to exercise properly? Are you terminating
any of the planned exercises for the next 18 months that are in
the pipeline already as a conscious policy decision within the
MoD, Mr Webb?
(Mr Webb) I think Mr Mann explained we have an annual
planning round which this year is absorbing a number of new things
which Mr Hoon has already described in his earlier speeches I
have been reading out. We need to be very careful that we do not,
when the defence budget is increased significantly for the first
time in many years, start getting completely bogged down in reducing
things. The news is we are expanding things.
122. We are trying to make sure you are spending
it wisely, Mr Webb. We are supportive of you getting more; we
are making sure that you are getting real benefits from this extra
money and we are not losing capability because you have made other
decisions which are not exactly the right ones.
(Mr Webb) We have a process which we have described
a couple of times which is to look at equipment in the round on
a long-term planning basis. We have not completed that process
for this round. It will be many months before it is completed.
123. What about HMS Nottingham?
(Mr Webb) I do not know.
124. Are you saying a policy decision has not
been made about that?
(Mr Mann) No, we have to look at HMS Nottingham
hard and work out what is to be done with her first.
125. People might be kidding themselves that
she is going to be back in the fleet?
(Mr Mann) No, we have taken no decisions at all. The
purpose of the planning round—and this is classic leak season—is
to look hard at every element of capability and to make sure we
have got it right for the future.
126. Nottingham is being piggy-backed
across the world. Are you bringing her back to refit her, to rebuild
her, or are you bringing her back to scrap her?
(Mr Webb) I am afraid, Chairman, expert as I hope
we are on policy (and we have made a stab at the broader equipment
programme) we are not experts on individual items of equipment.
Chairman
127. I think you should have anticipated that
Mr Hancock and Syd Rapson would have asked a question on that.
(Mr Webb) I feel to my shame that I have not been
able to answer it but we will tell you what the position is on
Nottingham. 5
Mr Roy
128. The New Chapter highlights the importance
of defence diplomacy and conflict prevention. I know that is going
to be a three year programme. However, what I would like to know
today is whether the money the MoD spend on this (£448 million
per year) has already been accounted for or will the MoD need
to go back to the Treasury now for the next three years and ask
for this money?
(Mr Webb) This is a very complicated subject, sir,
but let me have a go because both Mr Mann and I were involved
in setting up the Conflict Prevention Fund. What the Conflict
Prevention Fund was all about was saying that between the MoD,
the Foreign Office and DfID we should pool our budgets in the
general area of conflict prevention and then try and prioritise
them more widely, so we have two pooled budgets for conflict prevention,
one for sub-Saharan Africa, which DfID lead on, and one for the
rest of the word called Global, which the Foreign Office chair.
What happens is that we try to meet together in two groups under
Ministers and decide our priorities. Having worked out the priorities,
we then transfer the money from the pool back to the departments
to spend. The pool is a sort of joint negotiation with the Treasury,
but the Treasury, who were very much involved with us in setting
this up, as an incentive, because they thought it was a good way
of doing business and it really is a good bit of joined-up government,
put a bit of extra money into the pool to encourage people and
give us a bit of flexibility to make some prioritisation choices.
That is how it works and we to some extent are both a decider
about how the pool is spent, because our Ministers are on the
groups, but we also make proposals. We will say, "We think
it will be a good idea to spend money on the Balkans or this bit
of Africa as opposed to that bit of the Africa," whatever
it is. We then have a discussion with departments on the priorities
and come up with something. That is how it works. It also includes
minor ops so quite a lot of money goes on covering minor defence
operations intended for conflict prevention purposes. That is
a quick overview.
129. Do you have to go back to the Treasury
every year and ask for the money?
(Mr Webb) No, because the size of the pool is settled
in the spending round—
(Mr Mann) We faced a question right at the beginning
about whether this was the routine stabilisation activities—good
governance and that sort of thing which are relatively predictable
and therefore you can predict them in advance—or should
we include minor operations like the Balkans and so on. We took
the decision to go wide. That means we have got a set of costs
(operations) in there which is relatively volatile. If a new operation
like Sierra Leone arises clearly you could not predict that into
the future. It gives us an element of volatility. What we are
required to do is to forecast ahead where we can forecast ahead
with the Treasury and reach an agreement on funding elements with
the Treasury but also go back routinely to the Treasury and say,
"This is the way in which our costs have changed." Those
changes are reflected in the ESTIMATES process to Parliament.
Chairman
130. Thank you very much. It has been an the
interesting session. I shall be watching the Committee of Public
Accounts very, very closely to see what they say and if your colleagues
there were more forthcoming on equipment issues, Mr Webb, perhaps
we can call you back and ask some more questions. I refuse to
accept the fact that an issue that we are very very much involved
with and where we took the trouble to go to Oman is not properly
answered because you are embarrassed about disclosing any information
prior to going to the Committee of Public Accounts who, to the
best of my knowledge, were not in Oman.
(Mr Webb) I have not said that, sir. I am simply saying
that we brought a broad-based team and next week's team will be
more specialist.
131. We have specialist questions too, and however
broad-based your team was, it was sufficiently broad-based to
answer many of the questions that we warned you we would be asking.
You performed well as always. Mr Mann was rather quiet, rather
more quiet than he was in the conference I attended in Southampton—and
I asked no questions on that you will note, Mr Mann. On policy,
fine, but on equipment I would certainly like to see who you are
lining up on Monday and see whether they should have been here
to help this Committee which is, after all, the Defence Committee.
Despite that, it was a very interesting session.
(Mr Webb) We got a lot from it too, sir.
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