Examination of Witnesses (Questions 1-19)
MINISTRY OF
DEFENCE
25 OCTOBER 2004
Q1 Chairman: Good afternoon. Welcome
to the Committee of Public Accounts where today we are looking
at Ministry of Defence battlefield helicopters. We are joined,
once again, by Sir Kevin Tebbit, who is the Permanent Under Secretary
at the Ministry of Defence, by Sir Peter Spencer, who is Chief
of Defence Procurement, and by Air Vice-Marshall Paul Luker, who
is Commander, Joint Helicopter Command. You are all very welcome
on what is obviously an important subject. Maybe, Sir Kevin, if
you do not mind, I could start by asking you a few questions.
Sir Kevin, why did your department spend a quarter of a billion
pounds on eight Chinook helicopters that cannot fly if it is cloudy?
Sir Kevin Tebbit: Thank you for
starting with the bad point. I had hoped you would talk about
the positive point, Chairman, of the helicopter force, but on
that I agree with you, the taxpayer has not been well served there.
We have spent £252 million and we have not got the capability
we need, and therefore this is an unsatisfactory situation. As
I hope you know, there was a post project evaluation, but I commissioned
a full study myself, when this was drawn to my attention, to ensure
that these mistakes are not repeated. I think the reason, as a
result of that detailed evaluation, is no one reason, there are
four main reasons, and I am not sort of taking refuge simply in
saying with smart acquisition it will all be fine, even though
this was a flawed procurement from 1995, nine years ago. It will
not all be fine simply by quoting a mantra of smart acquisition,
we need to heed, and I think we are heeding, four key lessons.
The first is we must have much better risk reduction and understanding
of what it is we are going into before we sign contracts. Perhaps
in 1995 this could be excused because people at that stage thought
they were basically buying an off-the-shelf aircraft, the Chinook
Mk3 was not going to be very different from the Chinook Mk2 and
2A, so it was a sort of direct acquisition from the United States;
but when in 1997 we decided that we needed to upgrade the avionics
and turn it from what it had been into something very different,
then much more questioning should have taken place and it did
not, and that is a lesson that we have had to learn and have learned.
It is part of smart acquisition, but it is a very specific case
and illustration. Secondly, we must have a much more rigorous
project review. We did not have enough project review continuously
during this procurement. There was not enough oversight, not enough
supervision by the Procurement Executive what is now the Defence
Procurement Agency, and that should have occurred. Had there been,
as now, monthly reviews of progress on projects, this would never
have happened, because people would have seen the problems emerging
much earlier and would have had much longer time to take mitigating
measures. Thirdly, we do need a better understanding of underlying
safety issues. Why this has gone wrong, in a nutshell, is because
we failed to specify what the UK requirements would be for independent
validation of the software used in this and the source codes that
would be needed to validate that software. That is a British requirement;
it is not an American requirement. The Americans tell us it is
fine, but our own standards require this and we failed to specify
it. So we are, firstly, reviewing our processes for safety cases;
we are looking at whether we have got it right in the way we do
things or not. Other countries would be happy to fly this aeroplane
today. The United States tell us it is fit to fly. Our own rules
make it impossible for us to do so in the role envisaged. We need
to understand why that is. Are we being too strict? In my view
probably not, but we do need to look at how we manage safety cases.
Secondly, we need to ensure that our project teams keep in touch
with those responsible for safety clearances as the project proceeds,
rather than wait until a very late stage before engaging.
Q2 Chairman: Thank you for dealing with
the question I wanted to ask you next, which I think you have
dealt with most comprehensively, which is the answer to what lessons
have been learned. Air Vice-Marshal, just tell us succinctly and
briefly and in layman's terms the three main reasons why this
helicopter does not work and why your pilots have to look out
of the window so see how high up they are?
Air Vice-Marshal Paul Luker: The
first reason, I think, Sir Kevin has already touched on, and that
is the fact that the safety parameters that we need to operate
the aircraft against cannot be proven on the aircraft in its current
configuration. The second reason why it is not able to fulfil
the function is that since the period it was acquired the requirement
of the aircraft has increased—it is used in a specialist
role, which I am sure you will understand I cannot go into in
too much detail, but it does not meet that requirement—and,
in any case, we have made conscious decisions to procure aircraft
now that meet better safety standards anyway in terms of health
and usage monitoring and also in terms of the self-defence aids
we fit to the aircraft. So, for those three reasons, it is not
fit for its operational task.
Q3 Chairman: Sir Kevin alluded to the
fact, I think he may have said, that in America perhaps the pilots
would have been prepared to fly it, but your pilots are not prepared
to take the risk. Is that right?
Air Vice-Marshal Paul Luker: It
is not that our pilots are not prepared to take the risk; it is
that the aircraft does not meet the safety parameters that we
lay down for it.
Q4 Chairman: Sir Kevin, as you know,
we had a very interesting visit last year to look at the Apaches
and we saw a lot of helicopters lying around in hangers, and we
see the same thing here. Is there something fundamentally wrong
with your procurement of helicopters?
Sir Kevin Tebbit: I think these
are two completely different cases. I am very pleased to say that
the Apaches are now flying. As of 28 September there is an initial
operating capability for Apaches, so it is now available for military
use and is, as it were, under the suite of options the permanent
joint headquarters has. So when we said we expected that to occur,
it has.
Q5 Chairman: So no connection, but the
same result. Excuse different, effect the same?
Sir Kevin Tebbit: It is not the
same result. There is no connection because one was about the
training provision. This is about the problem of proving the aircraft
to our safety standards. The Air-Marshal referred to two other
elements, which are relevant. The cost—you talked about
the cost of this. The cost to put this right would be three elements,
one would be to sort out the air-worthiness issue that we talked
about; the other two elements would be to meet the current Defensive
Aids and health and usage monitoring standards and the current
requirements for special forces operations, both of which would
have been additional projects even if this particular project
had been successful. So it is possible to exaggerate the extent
to which this has been totally flawed, but there is no distinction,
no similarity, sorry, between the two things, except, as I say,
Apache is now up and flying operationally.
Q6 Chairman: Can you, please, look, Sir
Kevin, at figure 13, which you can find on page 32, and there
is also a reference to this point in paragraph 4.3, which you
can find on page 31. What this shows us is that you have less
than two-thirds of the helicopter lift that you want. I know,
Sir Kevin, that you have issued a supplementary memorandum[1]
and I know that there is an argument whether the shortfall is
20% or 40%, but I do not want to get into an argument about that,
the fact is that you still have much less helicopter lift than
you want. What impact has this had on operations in Iraq or elsewhere?
Sir Kevin Tebbit: Chairman, it
has had no impact on our operations in Iraq or elsewhere. In the
operational context we have provided and, in my judgment—the
military judgment can follow—all of the military operational
helicopter assets needed for success. Where it has had an impact
has been on training in the UK, particularly support for ground
forces operations. That is really why there are two different
figures. The 38% here is the aspiration of the equipment community
to meet the full ideal requirement; the 20% is what in practice
is the level we are working to. We are short of that, but the
shortage comes through in terms of operational training in the
UK, not in terms of actual operations. They are our first priority
and we meet those with the assets concerned. Remember, we took
77 helicopters to Iraq. It was not a medium scale operation; it
was a large scale operation. Something we would expect to have
six months to prepare for we did in much less time than that,
and British helicopters performed brilliantly; indeed on the critical
assault on the Al Faw Peninsula at the beginning of the operation,
very heavily covered as well in the media, it was British aircraft
that replaced American aircraft, who decided, for various reasons,
that they did not wish to take the task. We took it and succeeded.
So I do not think there is any doubt about the operational capability;
it is more about the training areas where we find ourselves short.
Q7 Chairman: You promised us, I think,
in the NAO Report . . . The NAO Report says that you intended
to eliminate this deficit by 2018. Reading your supplementary
memorandum,[2]
it seems that you are no longer planning to eliminate this deficit
by 2018. Is that right?
Sir Kevin Tebbit: I have to say,
I think that is what you see from the graph. That is not the way
the real world planning takes place. I do not know what the situation
is going to be like in 2018. What I can say is that we have ear-marked
for the future Rotorcraft capability—helicopters that we
are procuring next—proposals that have already started and
will be completed next spring—£3 billion over the next
10 years to equip the next generation of helicopters. I am satisfied
that—
Q8 Chairman: Is that less money than
you had intended before? Are we talking about the same amount
of money to eliminate this deficit or not?
Sir Kevin Tebbit: Plans change
according to each two-yearly cycle. It depends who you are asking.
As I say, there is an equipment customer community which has high
aspirations. That has to be balanced across the totality of Defence
equipment programmes—we do not just buy helicopters, there
is a lot else going on—but £3 billion is £6 billion
over twenty years, that is the highest figure that I think we
have ever come up with and I am quite confident that with that
we will have a much more powerful helicopter force than we have
at present and will continue to have, as the Report says, probably
the most effective in Europe.
Q9 Chairman: Can you now, please, look
at paragraphs 4.7 and 4.8 on your final page 33. You will see
in those paragraphs, Sir Kevin, that "The helicopter force
has a number of critical capability shortfalls in its communications
and defensive aid equipment". What are you going to do about
this?
Sir Kevin Tebbit: This mainly
refers to the helicopters which are sort of about to go out of
service and for whom, therefore, it was not sensible to have a
permanent expensive fix, I mean, Lynx and Puma. All of the new
helicopters that we are procuring today and will be procuring
under the future Rotorcraft programme have full communications
fit and will also be compatible with the Bowman system for the
land forces; so they will have inter-operability there. As I say,
the successors will have this enhanced communication. We had to
put these sorts of fits inadequately really into legacy platforms;
so that will be corrected.
Chairman: I have got other questions,
but I had better give colleagues a chance to ask questions. The
first colleague is Mr Alan Williams.
Q10 Mr Williams: Sir Kevin, we joined
this Committee in 1990 and I thought by now I had seen every variation
on the fiasco it was possible to see, and then this Report landed
on my desk. I would like to ask you some straightforward questions,
not opinions, not value judgments. Will you just confirm various
facts, and I want to concentrate on the Chinook and I want to
concentrate on the Lynx? The fact is that the Department has now,
after six months of this Report being published, written off £205
million of public money, has it not?
Sir Kevin Tebbit: That is a precautionary
figure.
Q11 Mr Williams: Do you mean it could
be more?
Sir Kevin Tebbit: No, it cannot
be more. That is the most it could ever be.
Q12 Mr Williams: Okay; that is fine,
but £205 million is what you have written off?
Sir Kevin Tebbit: We have not
yet written it off. We felt that that was the accurate statement
for the Accounts as of today.
Q13 Mr Williams: You say that the fleet
that you have, limited as it is, is really only usable for spares.
That seems to be in your supplementary memorandum.[3]
Is that not so?
Sir Kevin Tebbit: That value reflects
the spares value of the fleet.
Q14 Mr Williams: So we have got the most
sophisticated aircraft which is very useful as long as we can
sell the parts to Halfords or to someone! It is an aircraft that
has never flown in anger or never in action in any way at all,
is it not?
Sir Kevin Tebbit: But it could
do.
Q15 Mr Williams: It could do! It would
seem that there is certain disagreement, and at the moment I am
inclined to think you would not write-off £205 million as
a "could do"?
Sir Kevin Tebbit: No, I am sorry,
you are wrong. This is prudence by the Department.
Q16 Mr Williams: It says that in order
to get it up to any sort of standard, which would only be the
standard then of the aircraft it is replacing, the HC2, would
cost another £127 million. So that is in the Report and you
have signed up to it. Is it not also a fact that the decision
to buy this was made, as you have said, in 1999 with it being
in service by 1998?
Sir Kevin Tebbit: I am sorry,
1995.
Q17 Mr Williams: I am sorry; I am misreading
my own writing. It was decided to buy in 1995 to be in service
by 1998. In your most optimistic assessment in the original report
you felt that by 2007, in fact, nine years later, it would still
only be capable of being brought up to the capability of the Chinook
HC2. That is stated in the report?
Sir Kevin Tebbit: Which itself,
of course, has had capability upgrades over the last few years
for the defensive aids, health and usage monitoring system, and
special forces use.
Q18 Mr Williams: So we might be a lot
better off buying some more HC2s at a much less price and doing
the upgrades?
Sir Kevin Tebbit: No, I am explaining
like to like. The point I am making is that over nine years the
needs of the battlefield have changed and we have had to upgrade
helicopters as we have gone along.
Q19 Mr Williams: So you did not really
need it in the first place because you have been able to bring
the existing Chinook up to standard; so you did not need to spend
the £205 million by the look of it. Is it not also a fact—I
said I do not want opinions—
Sir Kevin Tebbit: No, but I am
grateful for yours.
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