Examination of Witness (Questions 460
WEDNESDAY 4 DECEMBER 2002
KCB OBE AFC
460. Can you say of the DLO asset maybe in five
years' time how much of it will be a provider activity and how
much of it will be a decider activity?
(Air Chief Marshal Sir Malcolm Pledger) More will
be decider in balance, much more will be decider than today.
461. So will it be 80% of the organisation?
(Air Chief Marshal Sir Malcolm Pledger) As I say,
I cannot answer that question because all that people will see
then is a determination to reduce the employment of people in
this particular sector, and it is not like that. It is a determination
to go through the process analysis to deliver solutions on acceptable
operational risk but with better value for money, and that is
the bottom line and that is the process that we are applying and
we have said how we are going to roll it out and that is what
I am going to take back to them. One of the other points I make
is this is not a file and forget document. I will be back to each
of these organisations in three months' time to exchange my view
of progress and to determine what their view of progress is so
462. I know it is a very disparate organisation,
but have you worked out what the percentage of civilian to military
(Air Chief Marshal Sir Malcolm Pledger) It varies
in the different communities. We come back to the culture issue,
if I may. For example at Wyton it is a higher military percentage
than it is in my headquarters at Bath. It is pointless saying
overall it is X because it is an environmental and cultural issue
and it is a feature, I have to say, of one of the areas that we
are trying to develop which is to create diversity in our environmentally
arranged solutions by virtue of attracting people from other parts
of the smart acquisition community.
463. If you can find some figures for us?
(Air Chief Marshal Sir Malcolm Pledger) Overall?
464. Perhaps individually, the ones that are
relevant to us.
(Air Chief Marshal Sir Malcolm Pledger) I can give
them for each of the business units and the headquarters but they
Jim Knight: Noticeably you are supported
today by suits and not uniforms and I would be interested within
your support team how that pans out.
465. In your Strategic Plan, Air Marshal, you
highlighted the progress of the changes you were seeking and the
problems associated with some of the legacy equipment and the
way in which supplying those is in some cases was possibly going
to hold back the sort of reforms you want to make, having to look
after so much equipment which has such a long history associated
with it much. What would your comment be about that position generally?
(Air Chief Marshal Sir Malcolm Pledger) I think my
first comment would be that that is just one of the panoply of
challenges against the transformation that I have been describing.
To use an example of difficulties, of course some of our earlier
procurement decisions have meant that our ability to compete then
in the support is constrained. In some areas, and this is not
consistent across the DLO, but for example in "Air"
we have organisations that currently are the design authority
for the equipment, they have intellectual property rights and
they also are, by virtue of airworthiness constraints, probably
the only manufacturer of many of the parts that then support and
help me maintain that particular fleet. The opportunities therefore
to broaden this, go to output contracting and create competition
are drastically constrained, and that will force us to move along
a path of partnering such that I can through other means incentivise
my supply chain whereas that is obviously not the case in some
of the other environments. That is just one example.
466. So what avenues are open to you then to
influence the way in which some of your customers can make judgments
for future procurements? How do you put your role into the role
of being an advisor to your customer as well as a supplier to
(Air Chief Marshal Sir Malcolm Pledger) Again my customers
are at different parts along this path to intelligence in as much
as they have different capabilities, different numbers of people
embedded in their organisations. Again I think McKinsey showed
a degree of horizontal overlap as well as, potentially, a degree
of vertical overlap. So I would much prefer that the DLO is seen
as the advisor to these customers of how to do things against
their starting requirements, rather than this huge tension which
currently emerges of very blunt targets set by those customers
that are not reflective of what I am responsible for.
467. So would you not say you are pushing at
an open door there?
(Air Chief Marshal Sir Malcolm Pledger) May I answer
that hypothetically. If you were a customer that did not pay for
anything I think your requirements and demands might be slightly
different than if you actually had to use your resources.
468. Is that a change that you would like to
see in strategic planning?
(Air Chief Marshal Sir Malcolm Pledger) I do not think
it is a change that needs to happen for us to move along this
transformation. What I am looking for is an engagement with my
customers that recognises the reality of resource constraints.
469. Would it improve the discipline they have
and what they expect of you?
(Air Chief Marshal Sir Malcolm Pledger) A personal
view is it just must; that is human nature.
470. Maybe you should push a bit harder because
I am sure a lot of Members in this room would support that view.
(Air Chief Marshal Sir Malcolm Pledger) I think I
stressed earlier this is not just a transformation initiative
that is going on in the DLO. We have got other strands going on
sponsored by the main office and that particular solution is one
that is being looked at again.
471. If I could ask you to comment on the DLO's
role with the PFIs. Since 1995 the Ministry of Defence have signed
45 different PFIs, totalling close on £2.5 billion. I am
curious for you to tell us what you consider to be the main benefits
of PFI in your particular area and, of course, obviously the pitfalls
(Air Chief Marshal Sir Malcolm Pledger) From a very
parochial perspective I would say that the real benefit of PFI
is the absolute requirement to look across life and determine
what the outputs of that service delivery are going to be and
face up to the consequences up-front because that is then the
contractual arrangement. That gives me as, shall we say, the owner
subsequently of the arrangements, greater faith that we will have
bottomed out all the risks and be able then to support that regime
at the level that it was originally expected.
472. What are the problems associated with operating,
as you do, 45 different contracts so far signed and some two dozen
currently under consideration? Where do you exercise any real
control over the way that they are properly managed and are operating
in conjunction with what you are trying to deliver?
(Air Chief Marshal Sir Malcolm Pledger) Again, I come
back to the interoperability of the IPTs, first of all in the
procurement arena and then subsequently in their moving across
that divide into the DLO. Their dual accountability means that
I get visibility and, indeed, the opportunity to influence that
contractual arrangement earlier rather than later.
473. Can I ask just one final question which
goes back to something I wanted to ask earlier when you were talking
about disposals. We are currently in the process of getting rid
of 100-odd Challenger I tanks to Jordan. I think there will be
something like 200 that will be gifted to them over a period of
time. Obviously going with them will be all of the accumulated
spares associated with having over 200 tanks around the system.
Is that the way it works? Does the whole shooting match go or
is it just the tanks and the transporters go and then we expect
the Jordanians to buy the spares from other sources or do we supply
the spares that we have on the shelves?
(Air Chief Marshal Sir Malcolm Pledger) That depends
on the organisation buying them.
474. These are being gifted.
(Air Chief Marshal Sir Malcolm Pledger) Some of them
are being gifted.
475. Over 130 of them.
(Air Chief Marshal Sir Malcolm Pledger) In those cases,
of course, it might well be in our interest to make sure that
the spares do go because if they are bespoke to that particular
organisation it would be pointless for us to retain them simply
to sit on the balance sheet.
476. My supplementary is will there be a suitable
desertification programme going with those tanks?
(Air Chief Marshal Sir Malcolm Pledger) We would not
be what I would call upgrading them at our cost subsequently to
transfer them, that would not be my perspective.
477. Perhaps you can drop us a note on this,
please, because obviously it requires a little bit of detail.
Perhaps you can supply that in due course.
(Air Chief Marshal Sir Malcolm Pledger) Can I just
be sure the inference here is that there is some MoD funded upgrade
going on before?
478. That is what I am interested to know. For
the life of me I cannot understand why anybody would want 200-odd
Challenger tanks unless they had been brought up to a standard
which actually means they are able to operate in the desert, because
we know from our own experience that they are not very good in
sand. I thought Jordan was a strange choice for a tank that had
not proved itself to be too effective in the desert.
(Air Chief Marshal Sir Malcolm Pledger) I will talk
to the Disposals Agency and come back to you, if I may.
479. They were designed for the Shah, the Shia
1 they were called, but he did not need them. They did operate
in the first Gulf War.
(Air Chief Marshal Sir Malcolm Pledger) As I say,
let me talk to the Disposals Agency.
Chairman: The point is we would like to know
are we giving them the spares? Would that clear out two-thirds
of your shelving? Are we charging them? Will your expertise go
out? It would be quite useful to know.