Examination of Witnesses (Questions 100-119)
DEPARTMENT OF
TRADE AND
INDUSTRY, BRITISH
NATIONAL SPACE
CENTRE, THE
PARTICLE PHYSICS
AND ASTRONOMY
RESEARCH COUNCIL
AND THE
OPEN UNIVERSITY
24 NOVEMBER 2004
Q100 Mr Jenkins: I should have asked
you about the bad bits of the Report.
Sir Robin Young: No, it is critical,
so it is bad in the sense that it says we have progress to make,
so I was being reasonably far and objective about it. If you look
at pages 18 and 19, the truth is that the individual partners
in the partnership have good performance monitoring systems on
their own projects but what the Report rightly says is that when
you put their projects together and make the totality of the national
space strategy, we do not have an overall monitoring system which
looks at the effective strategy as a whole. It made several suggestions,
it had useful consultants' reports and we are now adding new performance
monitoring systems.
Q101 Mr Jenkins: So, the answer is that
you cannot. You cannot assess performance because you do not have
anything to measure it against.
Sir Robin Young: The answer is
that we can assess the performance indicator on individual projects
but what we do not yet have is the methodology for bringing everything
together to assess the performance of the overall strategy, but
we can assess performance indicators of individual projects.
Q102 Mr Jenkins: So, that is the failure
you are putting right.
Sir Robin Young: It is progress,
okay. Failure if you want. Piloting a new performance monitoring
using the earth observation programme board and we are trying
to get an overall picture of the size and totality of the projects.
Q103 Mr Jenkins: When Mr Curry was asking
you about this payback from the European side, was there an instance
of miscalculation with regard to the amount of payback?
Sir Robin Young: Yes. We were
the ones who spotted it and Colin Hicks will now say what has
happened as a result of our spotting it.
Dr Hicks: Yes, you are quite right.
What happened is that the system within the European Space Agency
was changed from the pre-existing system in 2000 and this is well
set out in the Report and, when the new system started in 2000,
after a few quarters of the report—what happens is that
there are reports every quarter on contracts that have been in
place—it was brought to our attention by one of the UK companies
that there appeared to be a mistake in those returns. We investigated
that, the company investigated with the European Space Agency
and, yes, it was correct in that sense, the complaint from the
company was correct, the European Space Agency had made a mistake
in the attribution of certain contracts. We had been driving that
through, secured the agreement for the European Space Agency to
a programme and that programme is being pushed through. The mistake
existed for a relatively short period of time and it was a mistake
in the implementation of the new system. That has now been washed
out of the system but it was picked up very quickly in the UK.
Q104 Mr Jenkins: So, it now will not
happen again.
Dr Hicks: You can never guarantee
that a mistake will not be made by definition but, as is acknowledged
in the Report, procedures have been put in place within the European
Space Agency to stop this particular mistake happening again.
Q105 Mr Jenkins: We have a number of
small firms in this country obviously and one of the biggest problems
with small to medium firms is actually getting involved and getting
on board. What work are you doing to ensure that small firms are
getting the opportunity to take part in this development?
Sir Robin Young: We have websites,
we are working more with the Small Business Service, Business
Link and technology advisers. There are a whole raft of things
that we in DTI are doing to try to get to small firms, but I acknowledge
straight away that what you are saying is right. It will be more
difficult for us to get to small firms than it will be for us
to get to big firms. Indeed, in Chapter 3 where it says that larger
firms are better placed to take advantage of the support from
BNSC, we acknowledge that. We work through trade associations,
so small firms that are members of trade associations should be
okay. The ones we are having real trouble getting to are the small
firms who are neither members of trade associations or do not
communicate with them and do not communicated with us direct and
that is a real challenge for us. The channels of communication
that we have are the website businesslink.gov.uk and are RDA-sponsored
technology based hubs for small businesses that are around the
country and enabling organisations like that. I acknowledge the
challenge and we are doing our best.
Professor Pillinger: Beagle 2
claims success in this respect because we attracted quite a number
of people who had never worked in space before, big and medium
and small people.
Q106 Mr Jenkins: It is always a challenge
and we are always trying to find ways of getting small firms linked
in and using their expertise. It says in paragraph 4.8 that PPARC
was not able to provide detailed costs for all 20 of the projects
it supported in 2003-04. Why would they not be able to provide
detailed costs in projects that they are supporting?
Professor Halliday: I am afraid
the answer will be "not very sure". There were discussions
with NAO about providing data for projects in the 80s and it was
agreed, for example, that digging out such historic costs of satellite
long launched and exploited would actually not be worth the effort.
I think there is a phrase in the NAO Report "PPARC does not
currently have a system in place which enables it to readily produce
historical data . . ." which is a statement about digging
in archives and pulling out a dusty old file. There is an implicit
criticism which is that we do not have a shining computer system
that, at the press of a button, will produce all the data about
the current project. The correct statement is that we are currently
installing a management information system which will do precisely
that. So, the criticism is accepted.
Q107 Mr Jenkins: I want to turn now to
Galileo. Given the existing GPS systems, what was the need for
Galileo?
Dr Hicks: Galileo, just to make
sure everybody understands, is the European global positioning
system and pre-existing American global positioning system. Galileo
was assessed as to whether Europe could use GPS or whether there
would be advantage to Europe from having its own global positioning
system. First because it meant that we would not be relying upon
a system which was controlled by the United States and was primarily
for military applications.
Q108 Mr Jenkins: Is that because you
do not trust the United States or you felt that maybe they were
going to rip you off on costs?
Dr Hicks: I think the second;
there was uncertainty about the continued provision. GPS does
not have a guaranteed availability and there are a number of services
such as aircraft navigation which rely upon guaranteed availability.
Although it is provided free at the moment, it does not have guaranteed
availability and an uncertain future. When an assessment was made—and
this is at the bottom of page 13 and I believe this comes from
the Price Waterhouse report—of the increase in net economic
benefit to the UK, it was assessed for UK, not for Europe as a
whole, of £6.3 billion by 2020 and this is against the background
of the existing provision of GPS.
Q109 Mr Jenkins: Can you tell me where
they would get the £6.3 billion by 2020. In what areas are
we going to benefit by that degree?
Dr Hicks: The global position
is a pervasive technology which will produce benefits in many
different parts of the economy. If you take the car sector, for
example, GPS is already in use in a number of cars simply to provide
people with a mapping service and the guidance.
Q110 Mr Jenkins: To stop you getting
lost, yes.
Dr Hicks: If you then look at
the applications that are coming, there are very large number
of sectors which are being investigated, some of them public,
some of them private. For example, it is being considered as a
means of guiding the emergency services to the scenes of accidents.
That will produce possibly a very large saving in life if the
emergency services are able, as a result of the GPS location,
the Galileo, the—
Q111 Mr Jenkins: If someone dies in an
ambulance before getting to hospital, there may be a disbenefit
for their family but where is the financial benefit? How can you
establish financial benefit and a saving in that area? Are these
figures not in effect just made up?
Dr Hicks: No, they are not. It
is fully set out where they come from. I was just quoting one
example and I am not an expert in what is the value of life but
I know that there are figures that are placed upon the value of
life. To take another example, there are considerations of using
global positioning systems to sell a large number of services.
One, for example, is car insurance which could be sold by the
mile. Services which enable people to know that they are close
to something that they actually want. It is likely, for example,
that all future mobile phones will have global positioning capability
built in and so you will be able to find out information about
the locality or information about the services in your locality
from your mobile phone. So, a very wide range of services. It
just goes on and on through the economy and I have just tried
to instance a very narrow example there. The movement of civil
aviation—
Q112 Mr Jenkins: This is back to the
improvement in quality of life which Sky brings us.
Dr Hicks: . . . the improvement
of railway signalling is all being looked at in terms of use of
global—
Q113 Mr Jenkins: We are now rewiring
our track with (sic) the Victorian signalling system when I talk
about GPS which is being done. So, there will be no trains running
in Britain by 2020 using GPS systems.
Dr Hicks: If you look at the services
market that has been studied in the Report, it comes up with that
figure for net economic benefit for the UK based upon an assessment
of a very wide range of services.
Q114 Mr Jenkins: The MOSAIC satellites.
You had a risk management process in place, a thorough one up
to the modern risk management, but the satellites were delayed
by over a year; what was at fault?
Dr Hicks: Some of the delay in
the satellites was because of a delay in the completion of the
commercial contracts from the other organisations that were involved
in the funding.
Q115 Mr Jenkins: Does the risk management
cover that sort of area?
Dr Hicks: Of course it does. This
was assessed, but the fact that you have done a risk assessment
does not mean that you can control factors that are outside your
control as with the decision making of other people.
Q116 Mr Bacon: Dr Hicks, I have two questions,
one on this question of risk and the other on cost. It does not
surprise me that somebody like Professor Pillinger would be pushing
and pushing and pushing for a project like Beagle 2 and, if you
were to send to Central Casting for a passionate professor, I
am sure you would end up with someone like Professor Pillinger
who has a real passion for his subject. Equally, if you were to
send to Central Casting for somebody who is going to manage the
British National Space Centre as an accounting officer with responsibilities
to the taxpayer, one very well might imagine someone like you
and we have. Your job surely is to weigh the competing claims
of passionate scientists with a vision of a mission with the possible
risk. I thought I heard you say earlier in response to an earlier
question about the Casani Review right at the beginning from the
Chairman that the National Audit Office Report concluded that
all the Casani Review findings, the key findings listed at the
bottom of page 25, had been successfully met. When I turn the
page, what I find in the National Audit Office Review is that
the written submissions which your organisation put into the DTI
and into the Office of Science and Technology to request funding
did not include explicit assessments of the risks to the project
nor any quantification of the possible outcomes to the project.
Indeed, you considered that until the actions that were attached
to the funding had been taken, it would not have been realistic
to quantify the likely outcomes. Was it your job to assess the
potential risks and the benefits and to notice that, once there
had been a radical reduction in the weight, the risks so adequately
outweighed any potential reward? It says again at the top of the
second column on page 26 that the system's mass and the time schedule
were still the main areas of concern in March 2002. Was it not
your job to say, "I am sorry but the gain is not worth a
candle and the money would be better spent elsewhere"?
Dr Hicks: I quote the National
Audit Office Report to you in its conclusion where it says that
the technical risks surrounding the project were sensibly approached
and mitigated. That is an overall statement. What you have been
quoting, I think, are a series of statements relating to different
phases within the course of the project. We assessed risk at a
number of stages in the project. The Casani Review was one of
the major reviews which assessed risk. It pointed to a number
of things that needed to be done and it says here in the NAO Report
that the consortium produced and implemented a detailed action
plan in response to these findings. At another stage in this project—and
Professor Pillinger may remember this very well—we had a
team of I think something like a dozen people in the European
Space Agency who spent time in Stevenage and Astrium going through
the project in fine detail, looking at the risks associated with
the project at a technical level, looking at the scheduling, looking
at the mass and looking at all the challenges that were in place
and, at the beginning of their study, we were very unhappy about
the schedule. We did not believe that there was sufficient margin
at the beginning of that schedule, which is why we were having
the whole study being undertaken. They worked very closely with
the Beagle team, the industry team, the academic team and the
companies, and they came forward with a number of recommendations
which enabled us to get back, at that stage, the schedule risk
and measures in place that would ensure that we remained within
an acceptable envelope. That is what happened at a series of stages
and that is why I think that the NAO Report says that the technical
risks surrounding the project were sensibly approached and mitigated.
Q117 Mr Bacon: It does actually say that
they were subsequently mitigated but that your assessment was
that there was no explicit assessment of risks to the project
nor any qualification. I have one other question about costs.
Can you just paraphrase what are the total costs. It says £42.5
million in total as a total project cost for the United Kingdom
but I am not clear because it talks about additional Open University
money and additional BMSC money. What was the absolute total that
this project cost?
Dr Hicks: I think the money which
went in from the public purse was £24.62 million, if my memory
serves me correctly, out of £42.5 million and the money which
was coming in from the Open University I believe was that difference
between £24.62 million and £42.5 million.
Q118 Mr Bacon: The Open University is
public money, is it not?
Professor Pillinger: The Open
University is indeed public money; the Open University's contribution
was £6.2 million.
Q119 Mr Bacon: It sounded to me like
Dr Hicks was referring to £24 million of public money and
then some Open University money on top.
Professor Halliday: One should
be careful. The Open University is a private organisation.
Professor Pillinger: We charge
fees to our students. This is our money.
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