Select Committee on Public Accounts Minutes of Evidence


Examination of Witnesses (Questions 140-159)

MINISTRY OF DEFENCE

25 OCTOBER 2004

  Q140 Mr Jenkins: And they should all be fit for war fighting because at the end of the day that is their job.

  Sir Kevin Tebbit: In an ideal world they will be fit for all environments at all times, but obviously you cannot guarantee that because you do not know what particular operation you may have to go into.

  Q141 Mr Jenkins: We do not get that, do we, because we have a flying platform, as you know, as the Report highlights, and we have a pick and mix arrangement, where we put different bits of kit on as in the different operations. The bit that worries me more is this almost just in time solution, when we buy stuff to fit on, and in the Report it mentions the fact that sometimes pilots feel that they do not have sufficient time, with a new bit of equipment bolted on, to get the training requirement. Do you feel that we are getting the right balance?

  Sir Kevin Tebbit: I think we are getting the right balance, but you are quite right. We try to procure things fit for purpose. However, of course, these platforms have a very long life and so there are continuous upgrade programmes as the threat environment changes. Lynx was procured originally for the Cold War, temperate climates, North European plain. To convert it for very different operating conditions meant that we were doing upgrades as we went along—we were in the middle of upgrades actually when this operation came along. Then the third thing is that nearly always for particular operations you need fine tuning, and that is where Urgent Operational Requirements come in.

  Q142 Mr Jenkins: It is not the upgrade I am asking about, it is the fact that when you are going to go into a certain area, a certain environment, you put another bit of kit on to the platform and then when that job is completed the kit might come off that platform and be fitted to another platform. So we are using this stuff and moving it around from helicopter to helicopter.

  Sir Kevin Tebbit: Sometimes we keep the equipment and sometimes we do not; it depends on affordability as well as other considerations, and it does depend on, as you say, configuring for different sorts of operations.

  Air Vice Marshal Luker: May I make a further point, again for clarification? One of the other compromises we have to make is about the physical properties of the aircraft—the more kit we put on it the less troops we can carry and the less missiles we can carry. So it is always a compromise in terms of the physical capacity of the aircraft.

  Q143 Mr Jenkins: I am well of the fact that some Forces—not ours—put so much kit on to a platform that when the pilot tried to turn it it lost lift and fell out of the sky. So we are aware of what platforms carry and sometimes we do not get it quite right. I want to ask about the training area, which I am quite interested in, because when we started the Defence Helicopter Flying School, which was started in 1996, you expected we would achieve savings of £86 million on training costs.

  Sir Kevin Tebbit: Yes.

  Q144 Mr Jenkins: Yet now this has been reduced to £10 million.

  Sir Kevin Tebbit: Yes.

  Q145 Mr Jenkins: Can you tell us why?

  Sir Kevin Tebbit: We have made various contract amendments as we have gone along and the throughput of the helicopter school is now much greater than it was under the original specification. I think the figure is something like 37% or 38% higher output required now than when we first planned it. So it is not the same package. We have more instructors there than we had originally, so obviously that has altered that cost calculus.

  Q146 Mr Jenkins: So what you are saying now is that you are achieving better unit costs than you originally envisaged? It is getting cheaper, better value?

  Sir Kevin Tebbit: I think we are getting better value but, again, at the expense of being criticised by the Committee, I would agree that the original contract in 1996 was not as tightly drawn as it should have been in terms of specifications, and they have had to be improved as we have gone along.

  Q147 Mr Jenkins: We are very used to having contracts not tightly drawn and that is our biggest problem, the fact that we do not feel that we have the expertise sometimes in the Departments across Whitehall to do the job when they negotiate and draw up contracts with the private sector. We are hopefully improving all the time.

  Sir Kevin Tebbit: I think so too and we have just had a new agreement with the contractor to share gains in third party usage, where we have times where there is an unavoidable spare capacity and how that can be used to reduce the cost to us as well as provide gains to him. So that is an example of improvement.

  Q148 Mr Jenkins: If you could turn to page 21, 3.8, halfway down there it says, "The United States Army hopes eventually to pass Chinook and `D' model Apache pilots to the front-line in approximately 44 weeks and 53 weeks, respectively. This compares to 110 weeks and 94 weeks, respectively, in the United Kingdom." Could somebody explain to us why the difference is so great, please?

  Sir Kevin Tebbit: Even for the United States this is at present still an un-funded aspiration. When you are training pilots—and I am sure the Air Vice Marshal will say more—you have to balance cost and time issues, and if you train people purely on the particular type and mark of aircraft they are going to use, and do not use more cheaper basic trainers, then although you might be able to turn them out as a pilot faster because they have had more experience on the precise type they will use, the costs go up very considerably. So there is always a need to balance cost and time on type and that is basically what is shown in figure 10 here. But, as I understand it, even the United States has not managed to achieve this because of the funding issues. There is also the question of quality and the standards we require of our pilots, and I do not want to get into an issue which will only cause problems with the US embassy, but we do regard the quality of our trained pilots as very high, and that is a very important point. I do not know if the Air Vice Marshal wants to add anything there?

  Air Vice Marshal Luker: Just one further point. I understand that the Americans also conduct more training in squadron service than we would ourselves. We have people going straight into squadron services straight onto operations. We cannot afford that luxury.

  Q149 Mr Jenkins: That is part of the answer I want. The other part is we will be looking at this closely to see if there are any lessons we can learn, for our own system. If I can touch briefly on the Chinook issue because in the supplementary memo you said that the fix to field option was the best value for money as a solution to this problem. What other options did you consider?

  Sir Kevin Tebbit: I was going to say provided it is demonstrated in this phase where we are spending £13 million to make absolutely certain. I am not certain yet. The other options are the base option, which is the one that is reflected in the accounts, simply use this for spares, which is clearly undesirable. Other options would be to sell them to other countries who regard them as perfectly acceptable aircraft.

  Q150 Mr Jenkins: Has anyone shown any interest at the present time with regard to maybe they would like them?

  Sir Kevin Tebbit: We are focusing on the fix to field option, but the answer is yes, but I am not in a position to go into details.

  Q151 Mr Jenkins: Because we are not going to get a decision from you for some 15 months on which option you are going to take, are we?

  Sir Kevin Tebbit: You will get a decision on which option to take, yes, you will, much quicker than that. We also want to take it in the context of our future Rotorcraft plans as a whole, which are in the timescale of now to next Spring.

  Q152 Mr Jenkins: I notice on page 31, 4.3, they said we are going to have shortfall on lift-off Naval vessels and partly if the Sea Kings could not do it we would use land based Chinooks, and I thought surely not these because these are not capable of doing the job, are they?

  Sir Kevin Tebbit: No, but there is obviously the other Chinook Force as well.

  Q153 Mr Jenkins: Yes, we are using the old Chinooks?

  Sir Kevin Tebbit: They are very capable aircraft.

  Q154 Mr Jenkins: One last question. Looking at the Report—and I have no doubt that maybe we are achieving a lot of what we set out to do—but do you think sometimes we do get value for money in so far as some of the programmes we see coming before us, but particularly the failures, do you think as taxpayers we are getting value for money?

  Sir Kevin Tebbit: I am sure you do, but it does not mean to say that we should not try to do better and must do better. But 70% of our projects come into time, cost and quality. What comes before the Committee are some of the ones that do not. Most of our problems, as you know, are connected with four big legacy programmes. This is another one which is unusual in the sense that time and cost were not the problem, the problem was quality, and it has this rather unique difficulty about the safety regulations. I am sure the Committee would not want us to say that we are going to ease safety regulations just in order to have this into service, because that is not what we do.

  Chairman: Thank you, very much. Mr Davidson.

  Q155 Mr Davidson: Can I start off by congratulating Mr Luker on the honesty of his CV when he comments that his interests are increasingly sedentary and sporadic. Such honesty is to be commended and I hope it will continue throughout the rest of our discussion. Can I follow up the point that was made earlier on, about the question of officer pilots only in the Navy and the RAF? You will have seen the Report here where it refers to the ability of non-commissioned officers apparently to fly the complex Apache and the way in which the Germans and the French are able to have non-officers flying helicopters. Do you understand that this approach by the RAF and the Royal Navy makes it look like snobbery and that it confirms a prejudice, basically, that many of the Forces are just somewhere rotten with snobbery, and that there is no real reason, apart from restrictive practices of the sort that we got rid of in the shipyards years ago, once the British industry had been got rid of, and that there is no real defensible reason for it, it is just there because it is there?

  Air Vice Marshal Luker: Perhaps I should have added one further thing to my CV, the fact that I am the son of a career senior NCO. There is no prejudice on my part at all about senior NCOs. I had them under command when I was with the Army and I find them, provided that they are trained and educated to the standard that we need, perfectly acceptable.

  Q156 Mr Davidson: Were you a helicopter pilot?

  Air Vice Marshal Luker: I am a helicopter pilot.

  Sir Kevin Tebbit: Could I just say that this is a Report that I commissioned in the light of the Committee's own recommendations earlier and, frankly, I expected there to be a change, but when I saw the value for money calculations as to how beneficial it would be to change and increase NCOs and bring them into the Navy and the Air Force, I found that under the costings which have been done that it would only be about £1.25 million more beneficial to use NCOs in those two Services, partly because the pay differentials are not that great and flying pay is on the basis of experience and not rank. Therefore, that was not a great deal but again even that was outweighed by the return on service issues. By and large you get slightly longer from officers than NCOs—it is not a huge difference, but it came out about cost neutral. Therefore, from the point of view of the accounting officer, it was not really worth—and is not really worth—seeking to impose what would be an upheaval on to Services in terms of their structures for the sake of a very small gain at best in terms of value for money. But in terms of equality and in terms of best practice I think this is probably something we may keep reviewing, and with the future Rotorcraft plans, as we bring forward a new group, as it were, of helicopters and see how that beds down in the Joint Helicopter Command, my guess is that we will probably return to it. But as of now, with so many other things going on—and I am just sorry that the Committee has not looked at all the good things that are happening in the whole of the helicopter Rotorcraft arena, which is what the Report was basically about—I think this is not particularly worth the candle at this stage to make any changes.

  Q157 Mr Davidson: That is an interesting point because these things are political as well as managerial, and I am very interested to hear that this something that not only would not have cost money but would have saved money, and would have changed the image and reputation of the Services to a great extent. I know that in constituencies such as mine there is an automatic assumption that anyone joining the Services does not have the upper ranks open to them, and that they only join at the level of the ordinary person, as it were, and the highest they can expect to reach is an NCO, which I think is a mistake. And the fact that you are not willing to countenance changing such a practice in order to give a greater impression that the Forces are meritocratic rather than being based on prejudice and snobbery is perhaps regrettable.

  Sir Kevin Tebbit: May I say something?

  Q158 Mr Davidson: That was a long answer that you gave me and I would like to move on to another issue.

  Sir Kevin Tebbit: I would just like to make a comment about the—

  Chairman: Carry on. You have given the answers.

  Q159 Mr Davidson: Can I ask you to look at paragraph 3.15—and again it is coming back to this point about the Defence Helicopter Flying School? As I understand it, the expectation was that we would get to save £80 million over 15 years. With half of the contract through, the maximum saving is now 10 years. It is reasonable for us to expect if this continues in the direction it has been moving, that by the end of the 15 years it will actually have been more expensive to privatise than to have continued to run it in-house. Is that a reasonable way of looking at it?

  Sir Kevin Tebbit: No, I do not think it is.


 
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