DEFENCE AVIATION REPAIR AGENCY
165. DARA was formed on 1 April 1999, merging the
two former agencies to create a single MoD-wide aviation deep-repair
organisation. On 17 January 2001, MoD laid before the House a
draft Order to establish DARA as a trading fund on 1 April 2001.
Our predecessors held an inquiry into DARA and visited St Athan,
DARA's largest site and its headquarters, in February 2001. Their
report The Draft Defence Aviation Repair Agency Trading Fund
Order 2001, was published on 7 March 2001. Its overall conclusion
The MoD sees benefits from converting DARA to
a trading fund, which will develop a competitive alternative to
its commercial sources of repair work, saving money for other
more pressing defence requirements. For DARA, the change of status
will challenge its previously sheltered relationship with the
Department, but it will, we are persuaded, also bring benefits
to the Agency. But if as a result DARA cannot deliver reduced
prices and better performance, the MoD might be increasingly driven
to place more of its repair work directly with industry, which
would effectively leave DARA to wither on the vine. The Agency
should become a trading fund on 1 April 2001, as planned. It should
continue to have the status for the foreseeable future.
166. The Government's Response to the Committee's
Although allowing DARA to operate on a more commercial
footing should help the MoD reap some of the above benefits, the
Government supports the Committee's view that there must be important
safeguards that the MoD will keep in place. In particular the
requirement to ensure that there is assured access to repair capabilities
and a capacity for surge workloads in times of crisis (as the
Kosovo campaign in 1999 demonstrated). That continuing requirement
must be protected in DARA.
The Government is pleased to note that the Defence
Logistics Organisation is making a firm commitment to making DARA
a successful Trading Fund and will be making investments and ensuring
that DARA continues to be an integral part of the capability available
to the MoD.
The Government welcomes the Committee's support
for Trading Fund status for the DARA, which recognises the excellent
work by both the DARA and the Ministry of Defence in transforming
the management of our aircraft repair and maintenance business.
167. DARA was the subject of a debate in Westminster
Hall on 2 November 2004 and also featured in the Defence Procurement
Debate on 4 November 2004. In the former, Mr John Smith MP, whose
constituency includes St Athan, said:
During the past year, £18 million of taxpayers'
money has been invested to build a state-of-the-art military hangar
at RAF St. Athan. It is the size of six football pitches and is
purpose-built to repair 47 fast jets at any timethe entire
168. Mr Ingram said:
The completed investment appraisal and affordability
analysis demonstrated that concentrating support of the Tornado
GR4 aircraft forward at RAF Marham would provide best value for
money compared with the alternative of concentrating backward
at DARA St.Athan. In essence, the choice was either to move the
aircraft to an existing main operating base for depth support
or to move RAF personnel to DARA St.Athan. The latter would have
meant significant up-front infrastructure costs, but either option
would have meant a significant reduction in civilian posts. That
was the reality. The investment appraisal and affordability analysis
also showed that it would not be cost-effective to concentrate
the Tornado F3 aircraft either forward or back, given that it
will soon be replaced by the Typhoon.
For rotary wing aircraft, helicopters, the investment
appraisal and analysis demonstrated that it would provide better
value for money to concentrate depth support for the Lynx, Sea
King and Chinook back to DARA Fleetlands, a civilian base, not
a military base.
169. Mr Ingram added, 'The consultation period ended
on 27 October, and I have received a formal response from the
trade unions which is now under consideration. I hope to make
a final decision shortly and am only a matter of days away from
170. Prior to our evidence session with the Chief
of Defence Logistics, we received a memorandum from the trade
outlining concerns about the Government's preferred way forward
of re-locating Tornado GR4s from DARA St Athan to RAF Marham.
The memorandum raised a number of concerns including the possible
closure of DARA St Athan by 2008, and concerns about the value
for money of MoD's proposals. MoD also provided a memorandum,
responding to the points raised by Prospect, the day before the
evidence session. It stated that advice would be submitted to
Ministers shortly and that that advice would take into account
comments made by the Trades Unions.
The MoD submission concluded:
We consider that the comprehensive analysis in
the IA [Investment Appraisal] and on the affordability of the
options was carried out in an objective and impartial way, and
we believe that the preferred option offers the best outcome for
Defence in terms of operational effectiveness and value for money.
171. We asked CDL about DARA. He told us:
When we applied that principle of better support
and we looked at different ways of achieving it, the investment
appraisal showed us that one particular area rolled forward to
a single centre of excellence for depth was the right answer and
in other areas rolled back into industry or DARA was the right
172. We asked CDL when RAF personnel had last undertaken
the deep repair of aircraft and what experience service personnel
at RAF Marham have in undertaking such work on Tornado GR4 aircraft.
CDL told us that at RAF Cottesmore on Harrier aircraft:
we have already introduced something we call
a pulse line lean system using RAF manpower, which has made huge
efficiencies in that process. Of course, we have learned from
that in the proposals for the business case for what we are going
to do at [RAF] Marham.
173. We asked what would happen if problems were
experienced at RAF Marham with the deep repair of Tornado GR4
aircraft and where else this work could be undertaken. CDL told
us that 'theoretically I suppose you could look back at the original
manufacturer as one option'.
174. CDL did not accept our suggestion that the proposals
relating to DARA amounted to a re-nationalisation because 'other
aspects of this review have resulted in a roll back. An example
of that is that the helicopter community will go back to [DARA]
Fleetlands because that was seen as the most effective and efficient
way of conforming with depth and forward requirements in the future'.
175. Following the evidence session, we sought from
MoD the additional information which had informed the announcement
on 16 September 2004, including copies of the Investment Appraisal
and the Affordability Analysis. MoD provided copies of these documents
and a further explanation of the decision to re-locate support
of Tornado GR4 aircraft from DARA to RAF Marham:
The End-to-End Review concluded that there was
substantial excess capacity in all areas of air systems support
There was both a need and substantial scope for improvement in
all areas. It also reflected the fact that, with some notable
exceptions, the Department and the Services were not using industry
modern best practice to drive down the cost of supporting military
aircraft. The case for significant change was unarguable.
It was clear thenand demonstration since
has amply proventhat significant improvements can be made
to the productivity of the RAF personnel through the application
of lean techniques, enabling more work to be done at front-line
bases, whereas there would be significant costs and operational
penalties in moving these personnel from the Main Operating Bases
(MOBs) to St Athan. These personnel form part of the "Crisis
Manpower Requirement" for the Royal Air Force, which determines
how many RAF personnel we need to sustain the level of concurrent
operational deployments for which the Department plans. Accordingly,
these personnel must be uniformed personnel and cannot be replaced
by civilians or contractors. Where the total depth support task
exceeds the number of RAF personnel required to support deployments,
the remaining work would be carried out at MOBs by civilians or
176. A report by the Management Accountancy Services
(Army) examined 'the comparative incremental costs for the rolling
forward or rolling back of on-aircraft Depth support for 5 platforms
(Tornado GR4, Tornado F3, Sea King, Lynx and Gazelle) to single
Depth facilities under 3 options'.
The three options were Roll Forward and Roll Back and a Hybrid
option. For Tornado
GR4 the report assessed the Roll Forward option at £25.449
million, the Roll Backward option at £35.955 million and
the Hybrid option at £25.464 million and concluded that 'In
summary, the Roll Forward and Hybrid options present better value
for money than the Roll Back'.
177. We were concerned about the substantial investment
that had been made in the DARA St Athan site. MoD told us that
the original decision to proceed with the modernisation of the
St Athan site was taken on the basis of a sound business case
The work load projections in the Red Dragon business
case indicated that the case for Red Dragon (in terms of MOD work)
was soundly based in the short to medium term out to 2008/09 but
there was a need for DARA to find commercial work in the medium
to long term. It was not possible to take into account the effect
of the End to End Logistics Review at the time the Red Dragon
business case was approved, since the Review had not yet then
178. On 25 November 2004, Mr Ingram announced his
decision 'to implement the preferred strategy'. On 16 December
2004, he wrote to our Chairman to update him on the future of
DARA and the work that he was commissioning. MoD was reviewing
strategic options for the future of DARA. Mr Ingram stated that
'The decision as to whether DARA should remain part of the Department
therefore needs to be considered
The alternative to retaining
DARA within MoD would be to place parts or all of it in the private
sector'. He emphasised that the decision to undertake a study
of these matters 'does not in any sense imply that we see sale
to the private sector as a 'preferred' option'.
179. We find it surprising, given the substantial
investment to create a state-of-the-art aircraft repair facility
at DARA St Athan, that MoD has announced that support of Tornado
GR4 aircraft will be moved to the Main Operating Base at RAF Marham.
We expect MoD to work closely with all interested parties to ensure
that DARA St Athan has a future and we expect MoD to keep this
Committee informed of the current study reviewing the strategic
options for the future of DARA St Athan.
180. We are aware that the revision and concentration
of Tornado maintenance in the RAF was driven by a need to reduce
both costs and manpower, as well as to improve procedural efficiency.
If these drivers are not to have an adverse impact on operational
effectiveness, the new arrangements at RAF Marham will need to
match, if not exceed, the high standards set by the skilled workers
at DARA St Athan. We expect MoD to monitor this closely.
181. We find it of real concern that if problems
are experienced at RAF Marham, MoD may be dependent upon the original
manufacturer of the aircraft to undertake repairs. One of the
reasons why DARA was created in the first place was to provide
'assured access to repair capabilities and a capacity for surge
workloads in times of crisis'. It is not apparent how the proposed
arrangements at RAF Marham will meet this requirement.
182. A key logistic lesson identified from Operation
Telic was the need for a robust system to track equipment and
stocks both into and within theatrea requirement which
had previously been identified in the 1991 Gulf War. We concluded
in our Lessons of Iraq report:
The lack of such a system on Operation Telic
resulted in numerous problems with the in-theatre distribution
of critical items such as ammunition, body armour and NBC equipment.
MoD has told us that having such a system is top of its logistics
priorities and we understand that proposals will be submitted
to Ministers in the spring. We urge Ministers to provide the necessary
funding. However, we find it deeply unsatisfactory that a full
system is unlikely to be in place within the next five years.
183. In its response to our report, MoD stated:
Both the NAO report and the Department's own
reports on Operation TELIC recognise shortcomings in our ability
to track equipment in theatre, and the issue of tracking has been
examined. A package of improvements for logistics materiel management
has been identified which includes tracking. This package would
require funding and options will need to be considered as part
of the Department's planning round against other priorities. If
funded, the enhancements will provide a robust tracking capability.
184. During our inquiry we asked about the progress
in introducing a robust asset tracking system.
Sir Kevin Tebbit, Permanent Under Secretary of State at MoD, told
There is no simple off-the-shelf solution
What we are doing is putting in place an in-transit visibility
system to help us from the deployed location to the front-line.
We did introduce it at the end of the operation and it made a
huge change straightaway; so we know it works. It is called TAV.
It is an American system. We had TAV Minus. We are now integrating
this thing (TAV) into our existing logistic systems and that is
already proving to be a great help. It does not cost a fortune.
The software costs are not huge. I think the full figure you have
got probably there is around £17 million. We have already
spent about half of that on this. But you also need people who
are trained to use it at both ends.
185. Sir Kevin acknowledged that greater effort was
needed on operational logistics.
To assist this, MoD had created a new post'ACDS [Assistant
Chief of Defence Staff] operational logistics two-star appointment'.
But it is also essential that there are sufficient numbers of
people with the appropriate training to undertake the asset tracking.
Sir Kevin told us that 'That is part of the 3,000 that will be
added as a result of the change in the four regiments, four battalions'.
As we noted earlier, the final allocations for the reinvestment
of those infantry posts are still to be determined, but in January
2005 General Jackson told us that provisionally 396 of the 3,000
would be logisticians.
186. In terms of timescales, we asked when MoD would
have a 'unified tri-service logistics system'.
Sir Kevin told us that 'we will be progressively getting better
between now and 2007
the issue is we have legacy IT systems
that we have to put smart front-ends on to pull them together
and give everybody the same amount of information'.
We asked whether, by 2007, MoD would have a system where it would
know where everything is and what container it is in.
Sir Kevin's reply reflected the chequered history of logistics
capability programmes in MoD:
Now I have been in the job for six years, I am
not going to say "Yes" again. What I am going to say
is, you know, I stake a lot of my job on getting this right and
making sure it happens progressively and I will continue to do
187. A key logistics lesson identified from Operation
Telic was the need for a robust system to track equipment and
stocks both into and within theatre. MoD is now investing in a
system to deliver an 'in-transit visibility system to help us
from the deployed location to the front-line'. However, it is
disappointing that MoD could not assure us that such a system
would be fully functioning by 2007. We look to MoD to set out
a clear timetable for the early introduction of the system, and
to ensure that the required number of personnel with the appropriate
training are available to operate the asset tracking system.
175 Cm 6269, p 10 Back
HC (2003-04), 1080, p 66 Back
HC Deb, 10 September 2003, c 26-7WS Back
HC (2003-04) 57-I, para 283 Back
HC Deb, 20 July 2004, c 234W Back
Q 388 Back
The DLO change programme and end-to-end study were merged to become
the Defence Logistic Transformation Programme on 1 April 2004 Back
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Cm 6269, p 11 Back
HC Deb, 16 September 2004, c 164-165WS Back
Cm 3999, p 47 Back
The Draft Defence Aviation Repair Agency Trading Fund Order 2001,
Fourth of Session 2000-01, HC 261, para 48 Back
Fifth Special Report, Session 2000-01, HC 514, paras 4, 12, 14 Back
HC Deb, 2 November 2004, c 27-28WH Back
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HC (2003-04) 57-I, para 291 Back
Lessons of Iraq: Government Response to the Committee's Third
Report of Session 2003-04, First Special Report of Session 2003-04,
HC 635, para 136 Back
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