Examination of Witnesses (Questions 80-99)
12 MAY 2004
SIR KEVIN
TEBBIT KCB CMG AND
MR TREVOR
WOOLLEY
Q80 Mr Jones: That is fine and I accept
the point you are making about rationalisation of buildings in
London. That does not actually help the North East and other places
where it always strikes me that the MoD is a barren area in terms
of jobs. Is there any reason why that is the case? Is there a
cultural need to be in London or a resistance to moving anywhere
outside London except the South East?
Sir Kevin Tebbit: We have moved,
that is the point. We have moved a very, very large amount of
our department, but it has tended to go to the Bath and Bristol
area.
Q81 Mr Jones: Why?
Sir Kevin Tebbit: The whole of
the Procurement Agency moved there, the centre of the logistics
organisation has gone there. We have moved people a hundred miles
out of London, but they have gone West rather than North. We have
just moved the Met Office, but it has gone to Exeter from Bracknell
and the Hydrographic Office is at Taunton already. We did quite
a lot of relocation to Glasgow. We have relocated some staff to
York. I am sorry it has not gone exactly where you are, but the
idea that we stayed in Central London is not correct.
Q82 Mr Jones: No, but you have stayed
in the South of England basically.
Sir Kevin Tebbit: Not entirely.
Q83 Mr Jones: No, but looking at other
departments such as DWP and Passport Office, who under previous
governments of all colours seem to have readily accepted a move
out of London and the South East, is it a fact that in the MoD
there is a cultural affinity or need to be in the South of England?
Sir Kevin Tebbit: No, I do not
think it is anything like that at all. I have to say that Bath
and Bristol do not regard themselves as being in the South East.
Q84 Mr Jones: I did say in the South.
Sir Kevin Tebbit: It is a very
large concentration. In the Lyons context, they are not there.
Salisbury Plain is cut in half by the Lyons definition, but we
have a lot of infrastructure there. Portsmouth is Portsmouth,
we are not going to be able to move that. There is no cultural
thing about the South East. The problem is that when you have
infrastructure, not just office buildings, you cannot simply up
sticks and move. To the extent that we were in office buildings
in London, 20 in 1991, 3 in 2004, we have been coming down very
substantially from about 12,000 then to 4,000 and a bit now.
Q85 Mr Jones: I look forward one day
to seeing one of your successors based in the North East.
Sir Kevin Tebbit: If you are then
a member of the North Eastern Parliament, then maybe, but obviously
Parliament means that most departmental headquarters still tend
to be in London. We are responding positively to Lyons and the
MoD contribution towards the total target of 20,000 is pretty
good.
Q86 Mr Crausby: Ninety-one of the 200
recommendations made in the Defence Training Review had been implemented
by the end of 2002-03. Could you tell us what further progress
has been made in implementing the other recommendations?
Sir Kevin Tebbit: I checked the
latest figure before I came here and around 140 of those recommendations
have now been implemented. We are cracking on.
Q87 Mr Crausby: Do you have a target
for the full 200?
Sir Kevin Tebbit: The difficult
stuff is managing to get this relocation of the specialist training
estate done and that is the main element which remains where we
will need to relocate onto central sites and possibly release
existing ones. That will need upfront investment. At the moment
I cannot say I have all the money we need and we will need creative,
imaginative ways with the private sector of trying to do it. We
are in discussion at the moment. That is the real issue which
remains. We have set up our central training establishment, a
directorate general. We are into e-learning in a very big way
with network systems all over the defence estate to help people
with modern ways of learning. We created the Defence Academy in
2002, that is up and running, looking to become not just a Defence
Academy, but in particular a centre of excellence for leadership
training, management training, as well as the technical work which
Shrivenham always did. We have made good progress with most of
these areas. I shall be happier when we get our specialist training
co-located.
Q88 Mr Crausby: You say in the report
that the rationalisation programme remained the highest priority
in delivering joint defence schools. What progress has effectively
been made on the programme? You just alluded to that to some extent,
but that was to be delivered through a public/private partnership.
Is there any progress on that? Could you tell us what savings
are expected from that and over what timescale?
Sir Kevin Tebbit: The savings
we expect from it are £1.25 billion over 25 years. So the
investment appraisals are good. There are six streams which we
want to put into that specialist training rationalisation: engineering
areas; communications; electro-mechanical training; logistics;
police; security, languages and intelligence as a final group.
We hope to start discussing this with industry in a more specific
way by July and we hope to have a very specific set of proposals
out there. The key thing will be affordability on off-balance-sheet
issues. I cannot guarantee anything in that area myself. What
I can say is that we worked at this hard. It is a core thing for
us, a central issue for defence. One of the best areas of the
department is that we do put a lot of investment into training
and education with the armed forces. One of the reasons people
describe them as among the best in the world is because of the
quality of the training we deliver. That is also true of the civil
servants delivering defence outputs, so this is a central issue
for us in terms of our long-term health. The plans are there.
Now we need to get the resources.
Q89 Chairman: One additional question
on training. I know we have a central directorate responsible
for network enabled capabilities. Do you have any comments on
whether we have devoted additional funding and training for those
engaged in this future approach to defence procurement and defence
operations?
Sir Kevin Tebbit: The short answer
is yes. That is one of the main areas of the training which is
going on, enabling people to work with computers and advanced
IT systems, whether they happen to be in a tank or in an office.
One of the main areas of training in skills is in IT competencies.
Q90 Chairman: We visited Upavon yesterday
and talked to people about training and we heard some very impressive
things, so clearly things are on the move. When one realises the
MoD is one of the largest trainers of personnel other than for
the purely military functions, to do their military functions
they obviously have to be trained for so many other professions,
then an even greater obligation falls upon the Ministry of Defence.
Although the budget is allocated to the Ministry of Defence, in
fact it provides a great deal of training for those who, after
their short service in the military, will then benefit other aspects
of our economy, although the budget comes off defence. Maybe you
should tell the Treasury that.
Sir Kevin Tebbit: We are; we are.
Q91 Chairman: Please do. Take it off
some other budget.
Sir Kevin Tebbit: I do regularly
talk to my colleagues about the benefit that defence brings to
the wider community. We turn out 25,000 or 30,000 people who leave
each year and go into the economy, usually well trained and well
disciplined. They are a huge benefit to UK PLC. One of my minor
objectives, minor because clearly it is not easy, is to try to
feed into some of these resources which are available, particularly
at the regional and local levels these days, through various regional
development councils and things where we can tap into that for
mutual benefit.
Q92 Chairman: Additionally, the MoD has
to pick up the pieces from what failures there may be in the educational
system. If young men and women come into the military who lack
many of the basic skills because for one reason or another they
have not performed very well in school, before they are usable
in the Ministry of Defence, there obviously have to be crash courses
to raise their levels. Maybe you should tell the Treasury that
too and get some more money out of education.
Sir Kevin Tebbit: I mentioned
the IT thing, which we call, inevitably in defence, SFIA, skills
framework for the information age, and that is a big area. At
the basic level we reckon that as many as 7,500 of our recruits
lack basic literacy and numeracy skills and one of the first things
that happens is to provide people with that very basic education.
We do do that as well.
Q93 Chairman: Maybe I am part of that
process. I hope you do not charge the Defence Committee for me
to attend a two-day course in July or August training the trainers.
I really look forward to going there.
Sir Kevin Tebbit: It is part of
our duty of care, provided from the defence budget.
Q94 Chairman: Duty of care to members
of parliament as well.
Sir Kevin Tebbit: And the wider
community.
Mr Cran: We must insist you tell us whether
you passed or not.
Q95 Chairman: We heard Lord Park[?] went
on a course. It would be interesting to see whether his attendance
was charged. I hope mine is not.
Sir Kevin Tebbit: I am encouraged,
Chairman, since you have given me the opportunity, to say for
the record that the actual number of people who are doing lifelong
learning accreditation skills useful for defence but relevant
to their future life is 44,755 people who are registered on nationally
recognised qualification courses. At that level too we are making
a difference.
Chairman: So when people complain about
what they would regard as an inordinate amount of money spent
on defence, we should try a bit harder to explain to them the
benefit for society as a whole in addition to fire-fighting and
protection.
Q96 Mr Cran: The Defence Procurement
Agency's annual report and accounts for 2002-03 make, to say the
very least, interesting reading. Because I guess you will not
have it in front of you, the Chief of Defence Procurement said
"The Agency . . . failed to achieve its targets on programme
slippage and cost growth . . . overall performance was seriously
damaged by major cost and time delays on a number of legacy projects.
This is clearly a very disappointing result . . . Overall 2002-03
has not been a good year for the Agency as measured by its corporate
performance". Now there is an understatement, is there not?
Sir Kevin Tebbit: It is honest.
It is a classic defence statement which is that we are an honest
department and we do tell it the way it is.
Q97 Mr Cran: I would never have doubted
that you were going to say that. However, the important thing
is that the Committee would be interested to know whether you
have a role as the MoD's accounting officer in getting this situation
rectified. If you do, what is it? If you do not, is there anybody
who does?
Sir Kevin Tebbit: I certainly
have a role as the accounting officer, because we now have a single
Vote. In the past there used to be a separate procurement Vote
for which the Chief of Defence Procurement was responsible. Now
we have one Vote and I am responsible for the whole Vote. In that
sense, as the accounting officer, I do have a responsibility.
The Chief of Defence Procurement runs an agency and is an agency
accounting officer, but that is a subordinate accounting officer.
I take my responsibilities for procurement very seriously indeed.
It is not so much the accounting officer role. The accounting
officer role is about regularity, propriety, and I am not aware
of any irregular or improper actions going on in that area, and
about value for money. The difficulties in DPA are not really
undermining value for money, but obviously they affect it. You
will have heard a figure from last year, from the hearings I went
to at the Committee of Public Accounts, that there was a £3.1
billion problem in our procurement budget and there were headlines
in the newspapers saying we had lost £3.1 billion or something.
That was a wrong impression. It may relate to your question, because
we did not lose £3.1 billion, but that is the forecast of
the future programme compared with the previous year, as a result
of forecast new cost pressures mainly from these four legacy programmes,
Brimstone, Nimrod, Astute submarines and Eurofighter. My main
concern is as permanent secretary rather than as accounting officer,
responsible as it were for the management of finance of the department
as a whole and delivering our programmes. It is in that context
that I am particularly concerned about this. What do we do about
it? When we selected Sir Peter Spencer a year ago, it was with
this very specific mandate to start to turn round this performance.
It had been quite good before then, but it went very badly wrong
that year. He initiated a stock-take of the whole smart procurement
process and that has now been implemented. The results of the
stock-take, working with McKinsey's, have now been implemented,
which I trust will start making a difference. Improved skills
development for the staff in these integrated project teams: there
always were centres of excellence, but we need to spread it more
generally across the population of our people who manage these
projects. Better risk management techniques: we still need to
have an appetite for risk because we are often dealing with leading
technology problems. We have to manage it well and have mitigating
strategies in place rather than just wait for things to get out
of control. Looking at through-life costs, seriously rather than
just as a token: working jointly with industry, understanding
better what their capacities are as well as them understanding
what our real requirements and needs are, requires quite a lot
of work on, for example, technology readiness levels, that is
what we call them, so we understand what the risks are in industry
in keeping their promises as to saying they can deliver this or
not. Then business processes, organisational changes. He has put
in place what is called a stock-take, but it is a pretty thoroughgoing
upgrading of the management in the Defence Procurement Agency
and it is an important piece of work on which I keep a very close
eye too. We cannot do it all ourselves of course. I should add
before I cover myself completely in a hair shirt and lacerations
that it does require industry also to up its game. You may have
noticed from time to time the odd little public comment about
our relationship with industry. We do expect industry also to
work harder to deliver the projects to time and cost which they
have taken freely on contractual terms.
Q98 Mr Cran: I am not suggesting you
should not have given a long answer, I am perfectly happy with
that, but the quick answer to my question is that yes, you do
have a role as permanent secretary and the actions you outlined
really came out of the discussions you have had within MoD.
Sir Kevin Tebbit: Yes. As accounting
officer, but particularly as permanent secretary, it is really
the area I worry about most and where I feel we need to do better.
Q99 Mr Cran: Is it your view that the
ones I mentioned, not meeting targets and programme slippage and
cost growth, will be rectified by the time of the writing of the
next annual report?
Sir Kevin Tebbit: It will get
better. The 2003-04 report will be better, but I am not under
any illusions here. We keep saying these are because of legacy
programmes and that happens to be true, but we must make sure
that our new programmes do not start going in the same way. It
is all right at present, because we have not got to the hard stage
of those programmes. We have to keep working at this.
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