Select Committee on Public Accounts Minutes of Evidence


Memorandum submitted by the Ministry of Defence

  The Report on Battlefield Helicopters published by the National Audit Office on 7 April 2004 offered a number of key recommendations for consideration by the Ministry of Defence, which we have taken very seriously. In addition, this is an area of capability which has been the focus of considerable work over the course of this year within the Department. In view of the time that has elapsed since the Report was prepared I felt it would be helpful to offer a written memorandum, prior to the forthcoming hearing on 25 October, updating you on the current position in all these areas.

  I would have liked to offer the memorandum a little earlier, but conclusions were only reached on a number of the key areas very recently. I will be happy to answer any questions you may have on any of these areas at the session later this month.

Sir Kevin Tebbit KCB CMG

Permanent Under-Secretary of State

14 October 2004

NAO KEY RECOMMENDATION 1: STREAMLINE FLYING TRAINING CONSISTENT WITH THE MAINTENANCE OF FLYING STANDARDS, WHERE POSSIBLE CONSIDERING THE OVERALL SINGLE-SERVICE TRAINING REQUIREMENTS

  The Report acknowledges that significant advances have already been made in this area. All three services continue to research methods of streamlining flying training, and action is taken where appropriate. Since publication of the NAO Report, further efficiencies have been generated through adjustment to course syllabi. Courses within the Elementary Flying Training School and the Defence Helicopter Flying School (DHFS) have been re-phased, joint Crew Resource Management training for Qualified Helicopter Instructors and helicopter students has been set up, and joint Aviation Medicine training is under consideration.

  In the near term, the main prospect for generating increased cost efficiencies will lie in adjustments to elementary flying training, such as those being explored under the Army Flying Training Study (AFTS), via which the Army is researching the potential for conducting all-rotary training, designed to replace the course currently conducted at the Defence Elementary Flying Training School, prior to their pilots' entry to the joint DHFS basic and advanced training. It is thought that this could reduce the training pipeline length by around 11 weeks. A trial course is scheduled to run in early 2005.

  In the future, the introduction of the UK Military Flying Training Sytem (MFTS) should offer substantial scope for improving the delivery of more advanced flying training. The current training fleet does not have the capability to download operational training from advanced platforms, which means that there remains a requirement for pilots to conduct training on more expensive operational platforms, such as Apache. For example, in a simplistic comparison with his RN Merlin colleagues, an Army AH pilot with a total flying experience of 250 hours will have cost an estimated £1 million more to train than the RN pilot (at 2003 prices). This need for type-dependent flying training, with advanced skills being learned on specific advanced platforms (or their simulators) determines the differing nature of flying training pipelines within each Service.

  The UK MFTS Integrated Project Teams (IPT) plans to conduct a full, two year, Rotary Wing Training Needs Analysis into tri-Service flying training in order to identify and address the future needs of the front line. This will build on the recommendations of the 18-month study conducted by the Flying Training Development Wing which concluded in mid-2004. The reason for not proceeding more rapidly is the need to await decisions on future equipments and associated manpower liabilities, establishments and operational considerations, to ensure full training coherence.

  At all times, quality is considered to be the most important factor in producing military aircrew. The Report recognises that the quality of output from the DHFS is acknowledged by all three services.

  There are limitations to how far joint training can be achieved. It is not as simple as having one training system for pilots across all Services. Adoption of best practice within all three Services has reflected dissimilar requirements. Of necessity, producing crews for the varying disciplines, of ship-borne, Attack Aviation and Support Helicopter battlefield environments, requires dissimilar, type-specific training to be carried out.

  For example, the RN pilot, who is training for a single-pilot, ship-borne role in a highly complex, integrated weapons and sensor platform, will have more experience on type than an RAF counterpart, but his overall total flying experience of 250 hours will be almost exactly the same. The skills required by the RN pilot by the time he reaches Limited Combat Ready (LCR) status dictate an absolute need for him to be trained on type (as opposed to flying an unrepresentative training platform). Conversely, the RAF, in crewing its Support Helicopter fleet with two pilots, can accept a less experienced ab initio pilot on type, having a senior and more experienced aircraft commander on board for every sortie.

  In addition, the Services each have different requirements from their training. While the AFTS is exploring all-rotary training for the Army, the RN and RAF are also required to operate Fast Jet and Multi-Engined Air Transport aircraft and their conduct of Elementary Flying Training on fixed wing platforms is an essential element for training and streaming pilots of the correct calibre for these roles.

NAO KEY RECOMMENDATION 2: CONTINUE TO WORK TOWARDS A COMMON APPROACH TO AIRWORTHINESS THAT OVERCOMES THE INCONSISTENCIES IN HAVING THREE SEPARATE CHANNELS OF DELEGATION

  The Department's airworthiness policy and regulations are joint. Within this joint structure, the individual Services have developed their systems to meet the individual Service operational needs. Key to this is a comprehensive understanding of all the elements (eg Single Service training, trials and development, ethos and modus operandi, as well as technical issues) that contribute to aviation safety. The Joint Helicopter Command (JHC) rightly expects the same standard of service to be delivered by each of the three Service helicopter Release to Service Authorities (RTSAs).

  The Department has recently undertaken a review of all airworthiness in the military air environment that has made recommendations for an audit process to ensure an early alignment of Release to Service processes and products, ensuring a common Service to Aircraft Operating Authorities (in this case the JHC). Where discrepancies continue to exist, for example, issues arising out of operating from ships, they will be quantified and where possible a plan will be developed for migration to the common standard.

  Further work, in a study by the Defence Aviation Safety Centre (DASC) due to report in November 2004, is to establish the extent to which current tri-Service arrangements for ensuring the safety and airworthiness of Service aircraft remain appropriate in the emerging defence environment, and make recommendations for the future.

  Each Service uses the most appropriate internal trials organisation (that is equipped with the appropriate aircraft type and suitably experienced personnel) to assist in the development of operational requirements, to provide independent safety advice to underpin the aircraft Safety Case and in the development of tactics and techniques for the effective employment of aircraft and associated modifications.

  The Department will always seek to nominate the most appropriate RTSA. Wherever possible the Department nominates only one RTSA for each mark of aircraft. Having two different RTSAs for the same marks of helicopter was at odds with perceived best practice and the airworthiness responsibility for the very small fleet of Lynx Mk7 and Gazelle helicopters of 847 Naval Air Squadron reverted back to the Director of Army Aviation. When different operational requirements are met by the procurement of different marks of the same airframe (such as the RN Merlin Mk 1 and RAF Merlin Mk3), a single IPT is responsible for facilitating the procurement. This approach minimises duplication of effort in many areas, but the differing roles and operating requirements and platform specification, particularly if operated by different Services, is likely to drive a requirement for different RTSAs. However, follow on work will examine the benefits of a Joint RTSA organisation. Such a study will, necessarily, be lengthy and require the full participation of all airworthiness stakeholders. It will have to incorporate a full legal review of current airworthiness (and Aviation Safety) policy and regulations together with consideration of civil policy and regulation including international and European issues.

NAO KEY RECOMMENDATION 3: CONSIDER IMPLEMENTING THE ARMY PRACTICE OF USING NON-COMMISSIONED PILOTS IN BATTLEFIELD HELICOPTERS THROUGH EXAMINING THE IMPACT OF SUCH AN INITIATIVE ON FLEXIBILITY IN OPERATING THE HELICOPTER FLEET, AND POTENTIAL COST SAVINGS

  An internal tri-Service study team has reviewed the issue once again and its recommendations have been endorsed by the Vice Chief of the Defence Staff. The findings are summarised below.

  The use of helicopters differs in each of the three Services. RN helicopters are operated primarily in small numbers, embarked as an integrated element of naval operational capability, which includes warships, submarines and aircraft. In the Army, helicopters are a Combat Arm, fighting alongside Infantry and Armour, and their operations are integrated closely with brigade, division and corps plans. In the RAF, helicopters primarily operate in support of land operations but in view of the limited number available and the high demand for their use, they are normally assigned at the highest command level, operating across brigade and divisional boundaries.

  These differing roles have driven the policies of each Service, which have evolved to reflect both the specialist demands of the individual helicopter forces and the wider command and leadership requirements of the parent Service. Within the Army Air Corps (AAC), officers are employed and trained to become the commanders, executive officers and staff officers of the Corps and the wider Army. In their flying duties they operate as mission commander. NCO pilots are almost exclusively employed in flying appointments and they form the core of AAC aircrew experience. In the RN, helicopter aircrew are required to act as both independent flight commanders and specialist warfare officers, responsibilities that require the experience, military and command judgement of commissioned rank. RAF helicopter pilots are required to operate their aircraft autonomously at strategic distances, in multi-national/joint scenarios, where a thorough understanding of higher command intent, threat assessment and enemy capabilities is essential. They are also a vital component of the Service's Flying Branch, playing their full part in command appointments and staff duties at all levels within a Service which depends upon its aircrew to provide its senior commanders and warfighters.

  Following detailed examination of the competencies required, the study found that it would be possible for NCO pilots to operate in a small number of RN and RAF helicopter roles. However, the requirement to maintain a minimum number of officers to provide the necessary command and control element of the forces, both on the ground and in the air, limited the maximum number of NCO pilots the RAF and RN could support to a combined total of 156. There was also a serious risk that the requirement for officer leadership on deployed and embarked operations, could reduce this number still further. The study found that the introduction of this relatively small number of NCO pilots would reduce flexibility of the forces involved and would have a negative impact on the overall rank structure and development of commissioned warfighters in the individual Service.

  In costing the impact of the introduction of 156 NCO pilots, the study identified potential savings of approximately £1.25 million; total savings being limited by the relatively small difference in capitation rates between junior officers and SNCOs, and the fact that specialist flying pay is paid to aircrew based on experience not rank. Additionally, the study identified that in view of the lower return of service of RAF/RN NCOs compared with officers, the employment of 156 NCO pilots would require the training of one additional pilot each year to maintain manning levels, effectively negating the £1.25M capitation savings.

In summary, the introduction of NCO pilots to the RAF and RN, while possible to a limited extent, would carry operational and structural penalties, without providing significant financial savings to the Department.

NAO KEY RECOMMENDATION 4: REDUCE THE CURRENT SHORTFALL IN BATTLEFIELD HELICOPTERS BY ELIMINATING INCORRECT SPECIFICATIONS AND SLIPPAGES IN DELIVERIES

  The Department acknowledges a current and projected shortfall in Support Helicopter lift capability. The precise level of the shortfall is, however, dependent on the assessment methodology and its underpinning assumptions, including risk treatment.

  The Department uses two slightly different methodologies to inform its decision making. Operational Analysis (OA) is used, primarily at the strategic level, to inform equipment procurement decisions and future capability planning. OA uses a set of illustrative future scenarios in which UK forces might be called upon to operate. The scenarios are considered representative of anticipated future operations and cover the spectrum of conflict and the range of anticipated environmental conditions. Detailed analysis is carried out to model the activity necessary to achieve operational success within acceptable levels of casualties in the scenario, and to determine the equipment capability required to support this. The 38% capability shortfall identified in the NAO Report is based on results drawn from Operational Analysis (OA).

  For planning purposes, the Department uses a different methodology to determine the force structure required to deliver our policy goals. This methodology is described in the July supplement to the 2003 Defence White Paper. The methodology uses the same concurrency assumptions as operational analysis, but takes account of both historical evidence and policy judgements about future operations, in determining the required equipment capability. By way of example, based on experience of the last 10 years, we assume that on enduring operations, there is scope for achieving the desired strategic effects with lower force levels over the duration of the operation. Similarly, for intervention operations, we attribute force elements against core tasks which are required to achieve operational success but manage with more risk on discretionary tasks which are assumed to be force-drivers in OA methodology. The required force structure using this methodology is smaller than the pure OA would indicate. Our analysis indicates that the lift shortfall, calculated against the same Medium-Medium-Small concurrency assumptions, is of the order of 20%.

  Whilst acknowledging an overall shortfall in Support Helicopter lift capability, the Department has demonstrated regularly its ability adequately to support Small and Medium Scale enduring Peace-Keeping Operations. Our policy assumption is that in such operations once the joint force has been deployed and stability established, lower force levels and lighter forces are required. We therefore have much greater latitude to plan the number of deployed helicopters in this type of operation compared to intervention operations. This could mean that in enduring operations in more benign environments, for instance in the Balkans, helicopter and crew deployments would be drawn down as low as possible, and would be lower than theoretical planning levels. In practice, the shortfall has not prevented us from successfully supporting recent operations in Northern Ireland, the Balkans, Sierra Leone, Afghanistan and Iraq.

  In the short-term, we will be looking at ways of improving our current capabilities as quickly as possible. For example, a £1 million measure to upgrade the engines on the Sea King Mk4 will increase the ship optimised Support Helicopter lift capability significantly from Apr 06. Bringing the Chinook Mk3 into service would, by 2008, increase the overall Support Helicopter lift capability by around 13% (see below).

  In the longer term, the NAO Report suggested that future helicopter procurements would eradicate the current capability shortfall by around 2017. Following this year's equipment planning round, which reflected the analysis in the supplement to the 2003 Defence White Paper published in July, `Delivering Security in a Changing World', there has been some adjustment and re-balancing of our priorities to ensure that we are achieving the right spread of future capabilities from within the resources available to us. We do not expect to eradicate the shortfall in its entirety, but the newly formed Future Rotorcraft Capability (FRC) programme (see below) should offer substantial improvement over the current level of capability, delivered at a reduced cost of ownership.

Chinook Mk3 Lessons Learned

  The NAO Report identified the need for the Department to learn lessons from the flawed procurement of the Chinook Mk3. Following the problems experienced by the Ministry of Defence in delivery of the Chinook Mk 3 helicopter, in September 2003 the Department undertook a formal investigation into the procurement process with the aim of:

    (a)  Establishing the clear points of failure in the project, including any deviation from laid down procedures, and what might have been done differently (and at what stage) to enable the project to be managed more effectively.

    (b)  Identifying whether the application of Smart Acquisition processes, had they been in place, would have prevented the same outcome in the same combination of circumstances affecting the Mk3 project.

    (c)  Applying the lessons of this investigation to develop any changes to the Department's approach to securing Military Aircraft Release (MAR).

  The investigation covered the project from its inception in 1994-95 to late 2003, identifying the key decisions made and interviewing the main players involved. This work produced recommendations on how mistakes might be avoided, and issues of process mitigated, in the future. The investigation was carried out by senior acquisition personnel from the DPA.

  From the recommendations, a detailed action plan has been produced and progress on each of the actions monitored and recorded. The recommendations covered a number of areas:

    —  Rigorous application of existing procedures

    —  Safety requirements and procedures associated with MAR

    —  Assessment of the impact had SMART acquisition been implemented at the time

    —  Co-ordination across Customer Departments for complex programmes

  Significant progress has been made by the Defence Procurement Agency in implementing the identified actions throughout the Acquisition organisations and robust mechanisms have been put in place to check the timely and efficient application of improvement initiatives. Senior personnel are involved in championing the improvements and ensuring that lessons learned are applied across a broad range of acquisition programmes. A further review of progress is planned for mid 2005.

Chinook Mk3 Way Ahead

  The Department has completed a Combined Operational Effectiveness and Investment Appraisal (COEIA) to identify the best value for money solution for what to do with the Chinook Mk3 platform.

  This has identified the `fix to field' solution as the probable value for money solution for the Chinook Mk3, and it identified a technical solution, which has been ratified by 3 independent technical advisors as being realistic. But before committing to this and against the background of this project, further work is being carried out.

  A "Preparation Phase" was accordingly approved in September to test, working closely with industry, the assumptions that underpinned the COEIA, to validate the proposed technical solution for "fix to field", and to identify and mitigate technical and commercial risks. We expect to spend around £13 million on this work. In the meantime, affordability is being addressed through the Department's normal planning processes. On current plans we expect to decide the way ahead next summer.

  Until a decision is made, the value of the Chinook Mk3 aircraft has been written down as a constructive loss of £205 million under prudent accounting practice in the Departmental Annual Report and Accounts. The impairment arose as it was established that, although the terms of the original contract had been met, the helicopters did not meet the operational requirement and could not acquire Military Aircraft Release. The value has been written down to reflect the value of usable spares only.

Future Rotorcraft Capability (FRC)

  The lessons of the Chinook Mk3 will be absorbed into what is now known as the FRC programme, for which the IAB endorsed the first phase of work in Sep 04. The supplement to the 2003 Defence White Paper, "Delivering Security in a Changing World", explained that we are in the process of reviewing our future helicopter capability requirements and our forward plans, focusing, in line with our wider policy, on the effects required rather than on types and numbers of platforms.

  Over the next decade, a significant part of our existing fleet will retire from service. We therefore plan to invest substantially in new helicopters in a relatively condensed timeframe to replace and enhance the capability they provided. We will invest around £3bn over the next 10 years in this area. In the short to medium-term, we will also be putting additional investment into our existing fleet. This gives us an opportunity for holistic consideration of the future programme that we believe will deliver a more coherent and more cost-effective future helicopter programme. FRC absorbs, and will test the capability requirements which underpin them, a number of programmes which were previously self-sustaining:

    —  Support, Amphibious & Battlefield Rotorcraft (SABR)

    —  Search and Rescue (SAR) (managed as part of the SABR programme)

    —  Battlefield Light Utility Helicopter (BLUH)

    —  Surface Combatant Maritime Rotorcraft (SCMR)

    —  Merlin Mk1 Capability Sustainment Plus (CSP) programme

    —  Chinook Mk3 resolution

    —  Health and Usage Monitoring System (HUMS)—Lynx and Chinook

  No decisions have yet been taken on the shape of our future programme, or the individual components within it. A number of considerations need to be taken into account. We hope to have a clearer idea of the way forward towards the summer of next year.

  FRC is designed to provide a successful structure for taking forward the procurement of helicopters for the foreseeable future. FRC will be guided by smart acquisition principles, establishing specific Key User Requirements (KURs) for equipment items from the outset, with appropriate input from all stakeholders; this should prevent equipment being procured to an incorrect specification. Robust contractual arrangements will in due course be put in place to minimise delays in delivery.

  The Department is working closely with industry, in particular AgustaWestland, Lockheed Martin and Boeing, both for the provision of accurate data to inform our decisions, and to ensure that we are fully aware of the consequences for industry of any decisions we might take. In the longer term, we believe that FRC will offer significant opportunities to industry.

NAO KEY RECOMMENDATION 5: SECURE ADEQUATE PLATFORM CAPABILITY ACROSS THE SPECTRUM OF PRESENT AND POTENTIAL OPERATIONS, AND ANTICIPATED OPERATING ENVIRONMENTS

  Battlefield helicopters are in constant demand for global deployment. It follows that there is a continuing requirement for the capability to operate across a wide range of environments. Through the FRC programme, Key User Requirements (KURs) will be established for all future helicopter platforms and their associated equipment. Battlefield Helicopter KURs will be established from the outset of the procurement process, with appropriate input from all stakeholders, and will include the capability to operate across the spectrum of present and potential operations in all anticipated operating environments.

  Given the Department's finite resources, we are unable to equip all our existing platforms and systems for operations across the full spectrum of conflict in all environments. The majority of the UK Battlefield Helicopter fleet was originally procured under a concept of operations focussed on NW Europe. The Strategic Defence Review, and subsequent reviews, have shifted our focus onto a more agile force deployable in a range of environments across the globe. As a result, many of our aircraft require modification to enable them to do so safely and effectively. Fleet-wide modification for legacy platforms is deemed both unnecessary and prohibitively expensive, in particular where we intend to procure new capability in the near to medium-term. Consequently, we have to balance our investments carefully. For equipment that is only of use in certain operational scenarios or for specific conditions that may arise rapidly, one approach is to employ the Urgent Operational Requirement (UOR) Process.

  The Department uses the UOR process to fine-tune military capability through the rapid purchase of new or additional equipment, or essential modifications to existing equipment, to support current or imminent operations in specific environments. In order to qualify as a UOR, it must be possible to field the equipment in time to make a contribution to the operation. Consequently, much of the equipment is theatre specific, "off the shelf", and designed for immediate and short-term usage.

  The Department reviews the status and ongoing utility of all UORs as appropriate, normally at the end of an operation. Where there is an extant requirement, the capability is judged against current and emerging priorities and, subject to the affordability of its support costs, is taken into the programme on its relative merits. Clearly, our resources are finite and not all UORs are deemed to be of sufficient priority and lasting utility. For operations that develop into a more enduring commitment, the process of review and assessment is conducted on an annual basis, taking into account the changing roles of the forces deployed.

  In sum, we seek to retain UOR equipment that has enduring utility, enhances our capability and can be properly supported and resourced throughout its life. A key aim of FRC will be the early incorporation of the extant UORs on the Chinook Mk2/2a into the baseline standard of the helicopter.

  While in the future we aspire to have a helicopter fleet that is capable of deployment in all environments, inevitably, as technology moves on, and new military scenarios arise, there will be a requirement to upgrade equipment to ensure that our forces are supported by the foremost technology available. The UOR process will therefore have an enduring utility.





 
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