Examination of Witnesses (Questions 60-79)
12 MAY 2004
SIR KEVIN
TEBBIT KCB CMG AND
MR TREVOR
WOOLLEY
Q60 Chairman: Repeat that for The
Guardian. I shall speak to Mr White afterwards, as I would
not want my words to fall on every deaf ear.
Sir Kevin Tebbit: We do not and
do not aspire to provide large-scale force packages regularly,
but even in the Strategic Defence Review in 1998 we said two medium-scale
operations concurrently was what we should gear our forces to,
able to generate up to large scale if required, but not as a rule.
That sort of trend has been deepened, not just as a policy thing
but by the reality of what we have actually been doing since 1998:
regular need for quite small elements of forces, but up to medium
scale, needed to deploy rapidly, particularly for war fighting
and the UK has been able to be at the forefront of that. Really
the point I am making is that it is not just about large numbers,
it is about speed, agility of response, with effective forces,
possibly at smaller sizes than we have aspired to in the past,
but the key thing is to get there quickly. We do not expect to
be in these operations alone. We expect to be operating as part
of the coalition.
Chairman: They are in even worse shape
than we are.
Q61 Mr Crausby: Back to questions concerning
manning levels. Paragraph 79 of the annual report tells us that
we are on course to meet our PSA manning targets by March 2004.
Those targets were: Royal Navy and Royal Air Force to achieve
full manning and the Army to meet 97% of its manning requirement.
Did you completely achieve this target? You have already told
us that there were some shortfalls, but overall did you meet the
target?
Sir Kevin Tebbit: Yes, I think
we did meet the target for manning. Within the tolerances shown
in the PSA target, plus or minus 1 or 2%, we did basically achieve
our targets.
Q62 Mr Crausby: You have already explained
that there were some specialist areas which remain. Can you expand
on that? What shortages in what specialist areas? You mentioned
pilots.
Sir Kevin Tebbit: Let me just
give you the precise details. We expect that the deficit in the
Navy will have improved from 2.4% in this report to 2.1% by the
end of this just past year. We expect it to stabilise at around
1.5%, so that is within our 2% tolerance. In 2002-03 we started
at 4.3% down and we ended with 2.4%; we got in 910 people net,
so that was a good achievement in the Navy. The specialised areas
where we are still short are artificers and submarine warfare
officers. I did not mention the other point which is that Royal
Marine other ranks are short. The armed forces have campaigns
to deal with those both in terms of recruitment and trying to
reduce wastage to keep retention up. I expect when we see the
final figures from 1 April this year that the Navy will have fractionally
missed their target, but only by a small fraction. I expect them
to hit the target during the course of the current year. The Army
has had a very good year, putting on just under 2% in the year
on strength, which was very good indeed. The whole trained strength
is now 1,904 people higher than it was 12 months ago. Recruiting
is still very good. The outflow is around its lowest level for
five years, which is also encouraging. Army is on track rather
well. We define balance as being within 2% of the requirement
and we are on track to achieve that in about the next 12 months
or so. It does not mean that there are no shortfalls; there are
specific areas of concern: medical services, communications specialists,
logisticians, those sorts of areas. We are working at those. The
RAF are already within their target, which is within 1.5% of their
manning figure. Their problems are with medical staff, where they
have taken action to improve it. Their early retirement rates
are down a bit, so that is useful too. By and large again the
same broad picture.
Q63 Mr Crausby: How affordable is full
manning in the medium and long term in the light of the active
discussions which you mentioned to Crispin Blunt and the proposed
cuts of £1 billion. Is full manning affordable in the light
of all that?
Sir Kevin Tebbit: I think the
£1 billion was £1.2 billion which was Crispin Blunt's
figure not mine. They are higher than the figures, if I were to
give any, which I would give. No, these things are manageable
within the totality of the budget. It does mean we have to move
things around in year if we are doing unexpectedly well. The recruiting
performance in the Army was faster than we had anticipated, but
we did that by the normal in-year adjustments which we make all
the time.
Q64 Mr Crausby: There is not much flexibility
in the budget, is there? According to the report, you had an underspend
of £63 million which is 0.3% of the total budget. In the
light of those discussions with the Treasury on expenditure reductions
have plans been made and will the PSA targets change in relation
to the size of the budget and the negotiations you conduct?
Sir Kevin Tebbit: We will always
have manning targets, because it is very important to man the
armed forces to the level required. I do not see this as being
a critical issue in the budget. If I compare these sorts of pressures
to ones in the equipment programme for example, it is the equipment
programme which is putting on greater pressures than the manpower
targets.
Q65 Mr Crausby: In any active discussions
you have with the Treasury the equipment programme will bear the
brunt of that.
Sir Kevin Tebbit: It is already
doing so. It is equipment and logistics where we have the greatest
flexibility and therefore the greatest issues surrounding affordability,
not in the manpower field. The manpower requirements are what
we need and we are determined to fund those in any case.
Q66 Mr Roy: You spoke earlier in answer
to Mr Cran about the "golden hello". As I understand
it a payment of £50,000 was made available to specialist
medical services. You said it was a fourfold increase, which sounds
really, really good and quite frankly I would expect a huge increase
if someone were offering someone else £50,000. How does that
fourfold increase compare with your expectations?
Sir Kevin Tebbit: It was as good
as the expectations, but we are talking about very small numbers
still and we still have a way to go. We are going in the right
direction and we have the policies in place and we are taking
the right sort of action, but it takes time to get it coming through.
We still have our plans, for example, for our centre of medical
excellence at Birmingham, we still require reservists to fill
out our medical complement when we go on operations and we still
have shortfalls in specialist areas, particularly consultants
and doctors. I do not want to imply that everything is fine, but
the patient is responding to treatment, if I may put it that way.
We created a Deputy Chief of Defence Staff (Health) about two
years ago for this very purpose of putting a much more powerful
focus on this and driving it forward. We put quite a lot of money
into the overall medical area which was underfunded. After Spending
Round 2000 we put something like £120 million into this area
and we are getting results. It takes a long time.
Q67 Mr Roy: According to the annual report,
there was a 24% shortfall in Defence Medical Services (DMS). How
has that changed recently? Is that going down substantially?
Sir Kevin Tebbit: It is definitely
improving, but I would not want to give you any totally false
promises. I am just looking at the figures. We are expecting to
bring on stream 40 consultants and 400 nurses over the next four
years. They are already in the pipeline, people with whom we have
already made contact and are now training. That is quite good
news. How will that affect the percentages? Obviously it will
take them down.
Q68 Mr Roy: There was a shortfall in
the recruitment of nurses. Is there a "golden hello"
for them?
Sir Kevin Tebbit: There is very
good starting pay but not the same level. We are talking about
specialists who are already specialists and the biggest area of
problem is in the specialist/consultant area, anaesthetists, that
sort of area.
Q69 Mr Roy: We heard after Operation
Telic from people in the medical services who had resigned following
the deployment. Have the manning levels overall worsened since
Telic?
Sir Kevin Tebbit: I know what
you mean, but we have not found any unexpected or unusual outflow
from the medical services or anywhere else from Telic. There has
been no unexpectedly high or expectedly high outflow. It is pretty
static, pretty normal. We are not suffering a big outflow. A figure
was quoted of 47 reserve personnel leaving and I did look into
that and asked. I was told that there had been no unusual outflow
of medical reservists following Operation Telic.
Q70 Mr Jones: May I turn to the defence
estate? By December 2002 the MoD had identified sites made up
of core sites and non-core sites. What progress has been made
in releasing high-value sites or sites which have high maintenance
costs?
Sir Kevin Tebbit: We have been
making huge progress since 1998 when I arrived, so that is when
I tend to get these figures from. I think that was after our Strategic
Defence Review when we emphasised this area. We have disposed
of £1,052,000,000 of defence estate, the benefits ploughed
back into our activity. That is a huge asset realisation, over
£1 billion over five years. That is the good news. The bad
news is that most of the low-hanging fruit has now been taken.
Individual sites which were simply sitting there for disposal
have been disposed of and for the future it is more a question
of having to invest up front in order to dispose. Increasingly
we are now in an area where we want to say: close three separate
little sites and concentrate on one big one, but we cannot get
the upfront funding for the big one easily and therefore we cannot
close the small ones, so there is a bit of a bind there. We now
need to be able to invest in order to release estate elsewhere.
In other words, we are seeking to concentrate on big sites more
and release smaller sites around the country.
Q71 Mr Jones: You say you have to invest
in those sites, but surely there are other options, for example
partnership arrangements with developers and others. Are you exploring
those types of options?
Sir Kevin Tebbit: Yes, we are
indeed. That is one of our big efforts. It is more in the context
of defence training plans, where we intend to concentrate training
more on a tri-service basis and group together in one establishments
which are currently run by the individual separate services; this
is for specialist training, not for basic military training. There
it will depend essentially on the ability to get a good private/public
partnership going with the private sector. We have quite an advanced
state of discussions going on with them and have been looking
to let a contract for this. The key thing will be affordability.
If this were off balance sheet it would be easy, but if it is
not going to be off balance sheet, then it is obviously much more
of a challenge for us.
Q72 Mr Jones: Does that review include
everything in the estate? Does it include, for example, TA sites
and reservist sites?
Sir Kevin Tebbit: Not in that
context. I was talking more about the training review element
and our core site policy. The core site policy is about regular
forces. It does not mean to say they do not take account of the
TA, but it is not about TA, no.
Q73 Mr Jones: The reason why I asked
that in terms of sites is that I know one on the banks of the
Tyne. Because of the very foresighted council and councils which
have pushed the regeneration of the quayside in Newcastle there
is HMS Calliope which must be worth an absolute fortune
now in terms of its siting next to redevelopments going ahead.
What would be the process there for realising the site, which
I accept 20 years ago was perhaps worthless but which now I would
imagine is a small goldmine because of its location? How would
that process be initiated? Are you looking for example at areas
like that where 20 years ago they were in an area of dereliction,
but now are absolutely slap bang in the middle of a thriving development
area.
Sir Kevin Tebbit: I wish we had
more of them. Most of those sorts of sites have gone generally.
If I think of the sorts of sites we would be aiming to raise in
the future, too often we find that there is not great value in
them; they tend to be in the countryside and some of them have
been defence lands for a long time and therefore there are clean-up
issues and risks associated with them. The book value to us at
the moment is probably exaggerated and the market value is often
much lower. All I am really saying is that we have taken the easy
stuff. That £1 billion over five years will not carry on
at that level. We still have good targets in our plan. Last year,
not the year in here but this last financial year, we realised
over £203 million of land sales which was our stretch target.
For the future, these figures will come down and it will be much
more a question of getting these creative arrangements with the
private sector to get the upfront funding needed to pump prime,
to be able to move ourselves around to core sites where we would
expect to see fewer but larger concentrations of armed forces
in the country. I am not talking about the TA. Above all, the
key element in all this, is the rationalisation of the training
estate.
Q74 Mr Jones: You might like to look
at that one, because I am sure the site on the banks of the Tyne
is worth a fortune.
Sir Kevin Tebbit: Thank you for
the suggestion. I shall certainly look into it and let you have
a note about what we think.
Q75 Mr Jones: May I turn to the Lyons
review and how if actually affects the MoD in moving government
functions and offices from the South East and London and how redevelopment
of the Main Building, which is ongoing at the moment, or near
to completion, is affected by that review. It does always strike
me, certainly in the North East, that previous governments' attempts
to relocate from the South East and London have been quite successful,
but my region seems to be quite a barren area as far as MoD establishments
are concerned. Can we look forward to the day when you and others
are based in Durham or Gateshead or Glasgow.
Sir Kevin Tebbit: Those would
be lovely thoughts. We have moved quite a lot of defence to Glasgow.
Q76 Chairman: If house prices continue
to rise in the North East, maybe there will be a relocation from
the North East down to the West Midlands or Wales.
Sir Kevin Tebbit: This is beginning
to sound like a congressional hearing as senators come in with
their congressional interests.
Q77 Mr Jones: Never miss an opportunity
I always say.
Sir Kevin Tebbit: Clearly we have
certain constraints. It does not help us that Portsmouth happens
to be in the Lyons area and I do not think we shall be moving
the Navy from Portsmouth whatever the size of the fleet.
Q78 Chairman: There will not be so many
to move, so it will be much more practical.
Sir Kevin Tebbit: There are limitations
for us, because we are not just talking about buildings, we are
often talking about training areas, big defence establishments
which have huge investments sunk into them and ones which we cannot
easily relocate. On Lyons, we are contributing 4,200 posts to
move out of London and the South East, provided of course we can
get the upfront funding and they are affordable.
Q79 Mr Jones: What type of jobs are those?
Sir Kevin Tebbit: There is a combination
of civil servants and military jobs. Part of that will be about
Woolwich and a number of other sites which escape my mind at the
moment, but I could easily give you a note about them. That is
not a bad start. In London in 1991 we had 20 different offices;
today we have just three. We have been reducing very heavily in
London over the past few years. When we go back to our Main Building,
which is on schedule, the first people will start going back this
month, by the end of May we shall begin repopulating that building,
it is successful in terms of the contract, we will take 300 fewer
back into it than we had previously in the head office. I expect
that to go down further as we look at processes and how we operate
in an open plan environment rather than cellular offices. It is
something which will give us savings in running costs between
£5 and £20 million a year depending on how the actual
service contracts work. It has given us reduced numbers and it
will give us a more efficient environment in which to work and
we shall be able to deliver our outputs better and reduce numbers
further once we are in there. By and large it is a positive story.
There are no frills, it is not gold-plated, but it is a fit-for-purpose
building.
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