Examination of Witnesses (Questions 209-219)
MR TOM
WATSON MP, MR
IAN ANDREWS
AND MR
MARK HUTCHINSON
24 MAY 2006
Q209 Chairman: Minister, good morning.
Thank you very much for coming to give evidence to us on a Wednesday
morning. We know Mr Hutchinson and Mr Andrews, but I wonder if
you could introduce yourselves, nevertheless, for the record.
Then I understand you would like to make an opening statement,
which we do not usually allow but, given that you have only recently
come to your post and given that you would like to set the context
for today, a very brief one will be permissible.
Mr Watson: That is very kind of
you, Chairman. If I could introduce myself, I am obviously the
new Under-Secretary and Minister for Veterans. I will allow my
colleagues to introduce themselves.
Mr Andrews: I am Ian Andrews,
I am the 2nd Permanent Secretary of the Ministry of Defence.
Mr Hutchinson: Mark Hutchinson,
I am the Chief Executive of the Met Office.
Mr Watson: Chairman, thank you
for allowing me to do a very brief statement, and it will be brief—I
know Committees can, occasionally, tire when Ministers drag on
in their opening remarks. I just wanted to say I was immensely
proud when I realised I inherited the Met Office in my portfolio.
You can also imagine how delighted I was to realise that your
Committee is undertaking a major inquiry into the Met Office,
and I was giving evidence two weeks into my new position. It is
not every job in Government where you get an organisation that
is not only a household brand it is also an internationally regarded
scientific centre of excellence and has a crucial role at the
heart of Government and in our military operations. I want to
say I have already got some news from the Inquiry, and I want
to send a signal out to you that I welcome it and I will be looking
at the conclusions very, very closely, and if I can act on them
I will do as best I can. I think what I have really found in this
organisation is that the basics are there: it is a very impressive
operation; they have got world-class science, science that benefits
a large range of customers, both Government and commercial, and
they have got a powerful commitment to bettering the lives of
ordinary people. I also see evidence that after a slightly turbulent
period of governance they have introduced reforms that meant that
last year they had record success in both business and, importantly,
in the front-end stuff—the forecasting. They have had some
problems and shortcomings but I personally think they are in good
shape, and I would hope that in the course of this Inquiry you
do not lose sight of the underlying fact that so much about the
Met office itself is about people, that it is a positive and successful
organisation, and we should be celebrating that.
Q210 Chairman: Thank you. That is
a helpful opening remark and I would be surprised if we disagreed
with any of it.
Mr Watson: A good start then!
Q211 Chairman: Can I start by saying
that the Ministry of Defence is the main customer of the Met Office
but is there still a case for the Met Office being owned by the
Ministry of Defence, given the work that is done both for other
government departments and for the private sector?
Mr Watson: I am tempted to say
that we are the owners of the Met because John Reid did not want
to take them with him to the Home Office. There is a rationale,
I think, that we are the biggest departmental customer, and we
take those ownership responsibilities very seriously. The kind
of information they give is important to all departments, but
particularly important to the MoD where they really do give us
a battle-winning edge in theatre. I think they need a large department
like the MoD to be able to provide the support and investment
that their future size needs, so whilst, with their current structure,
they fit very nicely with the MoD and I see no need for us to
move away from that, I do not know whether Ian would like to offer
some observations.
Mr Andrews: Just, really, to reinforce
the Minister's point. The MoD has a very strong business interest
in the output of the Met Office, it does provide that potentially
battle-winning edge in future conflict scenarios, and we depend
very heavily on its output and, indeed, in the longer term, with
the impact of climate change, that becomes a more and more significant
consideration. I think, also, the sheer size of the MoD's budget
gives the Office financial security. If it is to be owned in Government
there is, in our judgment, no more appropriate department than
the MoD to own it.
Q212 Chairman: "If it is to
be owned by the Government". Do you see that there might
be any advantages to the Met Office not being owned by the Government
or by the Ministry of Defence? You have talked of the risks of
loss of that big budget, but would there be any advantages as
well?
Mr Watson: Let me say you will
be aware there is currently an internal review going on about
the way the organisation is structured, and that is not ruling
anything in or ruling anything out. What I think I should say
is that if we are to move to a different form of ownership, there
has to be a compelling case put, and that is why although I have
not seen the review I would be considering that review shortly.
Until there is a strong case that we move away from the system
we have got now I do not want to set any hares running.
Q213 Mr Havard: Can I ask you a question,
Chairman? Do we have the terms of reference for that—or
is that just my stupidity? I do not remember knowing that there
was such a review being undertaken and, if so, what the terms
of reference are.
Mr Watson: I have not got them
with me but, Mr Havard, we can send them into the Committee if
that is helpful.[1]
Q214 Chairman: That would be helpful.
Mr Andrews: If I can help to clarify
that, Mr Chairman, what we are doing at the moment, in the context
of preparations for the Comprehensive Spending Review, is looking
at the structure of all of our trading funds. This is, in a sense,
a preliminary evaluation of whether there should be a formal exercise.
So there are no, I think, formal terms of reference, as such.
If we were to conclude this is something, and Ministers decide
they want it, to be further explored, then we would have those
formal terms of reference.
Q215 Mr Jones: How do you start reviewing
that without terms of reference? I am sorry, Chairman, I do not
understand that. I might be a bit thick, but either it is a review
or it is not a review.
Mr Andrews: The question we are
asking ourselves is, looking at the current structure, should
we be looking at a formal review? If Ministers decide that that
is what they want to do then there would be formal terms of reference.
Chairman: What is the timescale of that?
Mr Jones: No, Chairman, I am sorry, this
is nonsense. What—
Q216 Chairman: Mr Andrews, what is
the timescale of when you would be deciding whether there should
be a formal review?
Mr Andrews: I would expect that
we would be putting advice to Ministers before the summer.
Q217 Mr Jones: What are the questions
you are asking yourselves? If there are not terms of reference
what questions are you asking to decide whether you should have
a review?
Mr Andrews: What we are doing
as part of this process is actually (as I say, this is not just
confined to the Met Office; we are looking across all of our trading
funds) to look at whether the current structures do actually provide
full value in defence terms, in terms of delivering both to the
public and to other government departments, looking at whether
we have got the right processes in place to lever back value into
the taxpayer from the commercial market. The aim of this is not,
as I say, to reach definitive conclusions but to be in a position
to advise Ministers on whether we believe there are alternative
business models that are worth studying in more detail. Therefore,
if as a result of that preliminary exercise the conclusion that
Ministers took was that we should go and look at alternatives
to trading fund, then clearly that would become a formal exercise.
Q218 Mr Jones: So those three points
are your terms of reference.
Mr Andrews: Those would be the
emerging issues that we would want to put to Ministers with terms
of reference, if we decided so to advise them.
Q219 Chairman: Which organisations
are you applying these questions to?
Mr Andrews: These are for each
of our trading funds, with the exception of the Defence Aviation
and Repair Agency, DARA.
1 See Ev 59 Back
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