Select Committee on Defence Minutes of Evidence

Examination of Witness (Questions 180 - 199)



  180. Against that background, what would you say to the proposition, which some might say, that, under the procurement system as we have it at the minute, there is far too much emphasis on project deadlines, cost budgets and not enough on what they might term and, for all I know you might term, customer value?
  (Air Marshal Sir Jock Stirrup) We have three key parameters when dealing with our projects: time, cost and performance and we consider them all. The performance is set by us in terms of key user requirements which are set after detailed consultation with those who are going to have to use the equipment. Obviously, we are always alive to the possibility of trade-offs between them. If somebody comes along to us and says, "Look, we cannot deliver this capability but we can deliver 80 per cent of it for half the cost", then we would take a very close look at it. If delivering 80 per cent of the capability meant that you could not win, we would not be interested. If it meant that you could, perhaps you might have to do something else with another system, perhaps you might have to change your processes a little but you could alter things and deliver the necessary outcome for 50 per cent of the cost, then of course that is what we would wish to do. We need to use the money as wisely as possible. We have a responsibility to the taxpayer, but also of course I have a much closer interest which is squeezing as much capability out of the resources available as I possibly can.

  181. Just so that I understand, is that a "yes" or a "no" to the proposition? In other words, did you agree with that proposition about customer value versus project deadlines and cost budgets or not?
  (Air Marshal Sir Jock Stirrup) No, I did not agree because your proposition, as I understand it—and forgive me if I have it wrong—was that we did not really worry about customer value, we just worried about time and cost.

  182. Again, just so that I understand this, what is your definition of customer value?
  (Air Marshal Sir Jock Stirrup) We set key user requirements for our capability and whatever system is delivered has to meet those key user requirements. That is then delivering the value, the outcome that the customer needs. As I said, if there were an opportunity to deliver slightly less than that for a significantly reduced cost or much, much quicker, then we would of course look at it. However, we would need to be sure that the capability required would produce the desired outcome. If it did not, there would be no point in it.

  183. Do you have any thoughts about how customer value might be better recognised or measured because of course measurement is always the key thing, is it not?
  (Air Marshal Sir Jock Stirrup) I think that we have a good system with our key user requirements because we do not any longer, in my area, specify that a piece of equipment must go at a certain speed or something like that. We talk much more in terms of outcomes because it is outcomes that we are after.

  184. Do you feel that the equipment capability customer has enough influence—that is the important word—in steering equipment programmes to meet evolving requirements once they are under the control of the Integrated Project Teams?
  (Air Marshal Sir Jock Stirrup) Yes, I do. I would just say that as we have to continue our progress in looking at equipment capability in the round and the interactions between different projects, that has to be mirrored with in the Defence Procurement Agency as well. So they face exactly the same challenge that we do. Integrated Project Teams are very focused on their own projects, but they cannot be delivered in isolation because everything connects to everybody else.

  185. What difference will the new Investment Appraisals Board make? What is the key difference?
  (Air Marshal Sir Jock Stirrup) It will not make any difference to me. I am not really the right person to ask about the Investment Approvals Board. The purpose in moving from the old Equipment Approvals Committee was to address the fact that we are no longer just about buying systems and therefore approving the expenditure on those systems. We are actually about procuring systems and/or services in terms of equipment capability and of course there is a range of other very large investment decisions which are outside the equipment capability area that go in the Ministry of Defence. It is about drawing all those together in a systematic and coherent way.

  Chairman: When you leave in a few years' time, Air Marshal, we will ask you on how many occasions the advice of the Equipment Approvals Committee was ignored by higher authority. It is quite difficult to get that information out of anybody. We have given you 40 minutes of rather gentle questioning but now we are coming onto the really dirty stuff and there is no one better to deliver difficult questions than my colleague, Gerald Howarth.

Mr Howarth

  186. We have had the theory, Air Marshal, and now we turn to the practice. We would like to ask you a number of questions relating to the Sea Harrier, the JSF, Eurofighter so on. As you will know only too well, two months ago, the Ministry of Defence announced, rather unexpectedly, the withdrawal of the Sea Harrier force beginning in 2004 and ending in 2006, which of course is at least six years before the introduction of its proposed replacement, the Joint Strike Fighter. Can you tell us what role your organisation had in the decision to withdraw the Sea Harrier from service prior to the original planned date of withdrawal.
  (Air Marshal Sir Jock Stirrup) My organisation had a significant role, as you would expect since we are about future equipment capability. The issue was how we were going to continue to provide the necessary range of capabilities on board carriers until the new carrier and the Future Joint Combat Aircraft came into service. What was clear to us was that, to sustain the Sea Harrier, the FA2, beyond 2006 as a viable weapon system was going to require a very great deal of investment and would entail substantial technical risk. There were a number of other areas of the programme that required investment and, as ever, it was a question of balance of priorities and, given the need to balance the priorities, the decision was taken that it would not be sensible for that period of time and given the risk to make the degree of investment in the Sea Harrier that would have been necessary to keep it viable in service.

  187. Given that the Fleet will be unprotected in that time, I think it is only reasonable to ask you what that essential upgrade would entail and how much it would cost.
  (Air Marshal Sir Jock Stirrup) It is not the case that the Fleet will be unprotected; I must make that absolutely clear. First of all, the —

  188. Perhaps, making that rather bold assertion, Air Marshal, you could tell us how the Fleet will be protected.
  (Air Marshal Sir Jock Stirrup) Absolutely. First of all, what is it that we seek in terms of capability from our carriers? We seek the projection of offensive power. That was the purpose behind the decision to procure two new larger carriers in the defence review. The carriers are about the projection of offensive power in which the Sea Harrier plays a very small part and a reducing part as the technology, in terms of offensive power, moves on.

  189. Forgive me, Air Marshal, but we are not talking about carriers, we are talking about the fleet that we currently have.
  (Air Marshal Sir Jock Stirrup) No, but that is the rationale for our carriers. It is projection of offensive power. It is true of the carriers that we have now as it will be of the carriers that we will have in 2012. That is the primary role. We have, for a number of years now, embarked GR7s and we will be embarking GR9s on carriers to carry out that role. We embark them on the current carriers and we have done for a number of years.

  190. That is an offensive role.
  (Air Marshal Sir Jock Stirrup) That is the primary purpose of a carrier.

  191. That is not a Fleet Air Defence role?
  (Air Marshal Sir Jock Stirrup) No.

  192. They are two completely different aircraft with completely different roles.
  (Air Marshal Sir Jock Stirrup) They are indeed, but I need to make clear, before moving on to some more detail about air defence, why we have carriers in the first place and it is not to provide air defence for the fleet, it is to provide projection of offensive power. Clearly, if you have a fleet at sea, you need to make sure that it is properly protected from the range of threats that it might face: sub-surface, surface and from the air as well. We are introducing, as you know, the Type-45 Destroyer which is going to have a substantial range of effective surface-to-air defences, a world beating radar, world beating missiles to go with it and a command and control system to go along with those. In the interim, we are making some substantial improvements of the Type-42 to make sure that its air defence capability remains at the level that we need. We have the Frigates providing point defence with missiles. We also of course, depending upon the scenario, envisage mostly operating with allies and partners in intensive combat operations. So, it may well be that we are being provided with air cover from other ships. We also may be able to provide air cover by aircraft operating from ashore. Again, all depending upon the circumstances. If you were to say to me, would I prefer to continue to have the kind of capability that the Sea Harrier produces up until 2012, my answer would be "of course", but not at any cost given the opportunities in other areas that we would have to forego if we were to make the necessary investment and that is the fundamental point.

  193. Would there not be greater savings that could be attributable to, for example, rationalising the Tornado F3, the GR4, GR7s and Jaguar?
  (Air Marshal Sir Jock Stirrup) Those are areas that we continue to look at and that we are investigating at the moment. We have not chosen only to look at the balance of investment in the FA2, we are looking at the balance of investment across the whole range of capabilities. However, it remains the case that not only would the necessary improvements to the FA2 have been extremely expensive, but they would have been at extremely high technical risk and it may have turned out that we could not have done it.

  194. Can you spell out to us what that technical risk is.
  (Air Marshal Sir Jock Stirrup) For example, it needs upgraded engines. The Sea Harrier is not the same airframe, as you know, as the GR7/GR9. Putting the larger engines into the Sea Harrier was a formidable task. We have had some experience of putting new engines into aircraft unsuccessfully. So, we have a very clear idea of the risks involved and they would have been substantial in the case of the Sea Harrier.

  195. Is that because you need the upgraded Pegasus?
  (Air Marshal Sir Jock Stirrup) Yes.

  196. It was suggested to me by John Farley last night, whom you will know is a most distinguished proponent of the VSTOL theory, that there are engines in America which would be perfectly suitable for the purpose of upgrading the FA2s.
  (Air Marshal Sir Jock Stirrup) I do not know to which engines he was referring, but certainly all the studies we carried out showed that to put an engine of sufficient power into the Sea Harrier while not obviously impossible was a substantial task involving a very high degree of technical risk.

  197. If the MoD concluded that it cannot afford to upgrade the Sea Harrier, why has it happened now? Why was the decision not made some time ago?
  (Air Marshal Sir Jock Stirrup) The decision was made now on the basis of a great deal of work that was undertaken in terms of balance of investment. I cannot give you a specific answer as to why it was not taken two years ago, but the most likely conclusion one can draw is that the necessary material and evidence was not to hand. There has been an attempt at coming up with an affordable plan to continue with the Sea Harrier in service because nobody really wants to see it go before it is replaced. It is not, as I said earlier, something that I would have chosen to do were it not for the fact that we have to make some hard choices in terms of balance of investment.

  198. Why not make the savings now? Why not scrap it now? Why wait until 2004/06?
  (Air Marshal Sir Jock Stirrup) We have to move the aircrew from the Sea Harrier across to the GR7/GR9 in order that they can perform the offensive power role flying those aircraft from the current carriers. We have to move the people, we have to put the training in place and we have to get sufficient numbers and that takes a bit of time.

  199. That takes two years and meanwhile all these costs that you are talking about are going to be incurred.
  (Air Marshal Sir Jock Stirrup) No; the costs that I referred to are the costs that would be entailed if we were to make the kind of improvements necessary in the Sea Harrier for it to remain viable post-2006.

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