Select Committee on Public Accounts Minutes of Evidence


Examination of Witnesses (Questions 100 - 110)

WEDNESDAY 9 NOVEMBER 2005

MINISTRY OF DEFENCE

  Q100  Stephen Williams: May I just pick up something you said in the start of your answer? You said that if there were an unforeseen military campaign, the Army would not be at the desired state of readiness.

  Lieutenant General Sir Rob Fry: Let me just make sure that I convey exactly what I mean. We have very high readiness forces which are contained within a joint rapid reaction force and we preserve those. Therefore, up to a given scale, we could certainly respond. If, however, this were likely to develop into something which looked like a higher level of operation, into something like medium scale, it would be difficult. That is only what you should expect, given the assumptions we take into all this and, as Sir Kevin has already said, the assumption we have is one medium scale and two small scales as the maximum level of concurrency. Now that is what we make all our preparations against.

  Sir Kevin Tebbit: We are doing it now.

  Q101  Mr Bacon: Sir Kevin, you referred to paragraph 2.38 and the fact that the Ministry has already spent some money on operational stocks of consumables. It refers there to body armour. As it happens, I was looking at the TELIC report last night and it did say that you actually had armour; I seem to remember the figure of £2.9 million for a load of body armour at £169 a set and you actually had it. The issue was not whether you had it or not: it was in theatre in Kuwait in containers and squaddies had to break them open to find where it was. In the TELIC hearing which we had, you mentioned almost in passing that you had spent £120 million on various attempts to improve asset tracking and I think you agreed that you had been trying to buy a Rolls Royce when a Toyota might have done. I should just like to know where it stands now. I was in Boston last year and I bought some books from a book shop and they gave me a slip because there were too many and I had asked them to ship them back for me. In fact they gave me two slips, because there were two boxes—the exchange rate was very favourable and I got quite a lot of books—and they told me just to type this long code, which was a number of letters and numbers, into the DHL website and said I would be able to see at any one moment where the books were. So I duly did and they arrived in no time in my Commons office. You referred to the word "visibility". How visible is your asset tracking now? Are you where you need to be, or is there still further to go and how much have you spent?

  Sir Kevin Tebbit: Both my colleagues are keen to chip in here, but I must firstly say thank you for your question. One of the things I shall miss most of all are these references to the real world and then challenging questions as to why defence cannot do the same thing.

  Q102  Mr Bacon: And I have not mentioned Marks and Spencer.

  Sir Kevin Tebbit: No, we have had that out already, so I need not go into all the details about not having to do it in danger, not having to et cetera, et cetera. We have had that discussion. However, it is of course relevant that the Marks and Spencer analogy does not work in terms of defence. To your question: we have indeed put a lot of effort into improving the  visibility, the efficiency, the simplicity of our tracking system and the management of our material as it goes in transit and we are also improving the robustness of our communications structure; the SkyNet 5 programme putting up satellites. One of the biggest problems we had was when one of the satellites went down. SkyNet 5 and now SkyNet 6 is  coming up, PFI programmes, SkyNet 5 very successful by the way. It is delivering exactly what we require. There are several initiatives which come together to improve that asset tracking issue.

  Q103  Mr Bacon: Is it there now, where it needs to be?

  Sir Kevin Tebbit: Yes. It is already there and it is coming out in phases of improvement. May I ask the Air Vice-Marshal to give you more details?

  Air Vice-Marshal Leeson: It is there in so far as if you were in the Iraq theatre now and you placed a demand, you could see the progress of that demand, both its acceptance by whatever unit it is going to issue against it and then where that item is actually transferring through the system, rather as you described civilian systems do. The areas where we are trying to improve on that are the resilience of it, because at the moment it is essentially a civilian off-the-shelf system which does not have some of the robustness in. It is not exactly soldier-proof at the moment, so the various screens and front ends that we are using are not as adaptable and flexible as we should like. Equally we want to transfer that into a proper accountancy system which also, as well as tracking where the item has got to, maintains it on some sort of inventory system to fulfil all the other obligations we have to ensure that every pound we spend is correctly used. There is a period of work for three or four more years to get to exactly where we want to be, but we actually have in place where we need to be at the moment, which is to make sure that we can avoid the problems that you identified earlier of tracking exactly where things have got to.

  Q104  Mr Bacon: There is one more part of my question. Perhaps I can ask that and then ask my final question all in one go. First, how much have you spent and are you planning to spend in total to get asset tracking the way you need? Second, could you just say something about the Defence Information Infrastructure, how much that has cost in total or how much it is going to cost and where it is in terms of development?

  Sir Kevin Tebbit: On the first thing, again I shall refer to the Air Vice-Marshal. My recollection is that we have spent something like £27 million so far on it. There are various elements; that is not the SkyNet thing. The point is that you also need the communication system which you have to put in, as you will recognise yourself, rather than rely on what might be available in the country in which you are operating. So that does not include anything to do with the SkyNet structure. I think the actual changes to our own IT systems have been something like £27 million.

  Air Vice-Marshal Leeson: For the asset tracking system, some £27 million so far and a further £3 million next year, which is the ability to track where an item has got to. There is a wider series of activities which moves into the more inventory management area, for which I regret I do not have the figure, but that is a slightly more elaborate system in the longer term[4].

  Q105  Mr Bacon: Perhaps you could send us a note.

  Sir Kevin Tebbit: It does not sound very much, but, just to recall—I never thought I managed to get this point across earlier—two years ago when we were talking about these issues, it was not so much that we did not have a system there, it was that the system we had worked slowly. It took quite a long time once a container arrived, in this single place where they were all turning up, for the people manipulating the machines to work out what was inside the container. By the time they got going, another container and another container had arrived and they were simply overwhelmed by the speed of arrival of containers, because their system worked far too slowly and was too cumbersome. Our work has been to speed up, to simplify, to clarify that process in the first instance, so it has not actually cost us as much money as one might have assumed to make quite significant improvements.

  Q106  Mr Bacon: And the DII?

  Sir Kevin Tebbit: The DII, as you know, is crucial to the whole of our transformation programme because it is the ring main which replaces 300 existing stand-alone IT systems brought together by the three Services and the various bits of defence as it has merged. Tranche one under the contract has been let; that will provide the basic infrastructure, the terminals which cover the UK and I think some overseas locations, not all, certainly not the deployed bit, but fixed locations. That is a massive contract. I am not sure what that bit of it is worth, but the whole of the DII programme is worth something like £4 billion. I think phase one is about £1 billion.

  Q107  Mr Bacon: Is it possible that you could send the Committee a note just summarising DII, not in detail but the main heads and the main money?

  Sir Kevin Tebbit: Happy to do so. We are working on tranches two and three, so we will not have final details on that because they have to be let and contractual negotiations have to go on. For phase one I can certainly let you have that[5].

  Q108  Mr Bacon: And a sketch of the rest of it.

  Sir Kevin Tebbit: Certainly. Very happy to do so. Two quick additional points on it: it is running to time and cost, it is on track at present. It is being monitored by the Defence Management Board itself; it is of that importance to us. We are also standing on the shoulders of the US Marine Corps in certain areas where they have used some of the same sorts of contractors. We are doing everything we can because it is so important to manage the risk and I am satisfied we have got a very robust arrangement for doing so. I shall give you the details of how much it is costing and what the steady state costs will be, because this will be several hundred million pounds per year when the contract is fully let.

  Q109  Mr Bacon: Perhaps you could sell your advice to the health service.

  Sir Kevin Tebbit: We are quite confident about this.

  Q110  Chairman: Air Vice-Marshal, General, thank you very much. I am sorry it has been quite a long day, but it has been a very illuminating one and, Sir Kevin, thank you very much for coming before us and thank you on behalf of the Committee for all you have done over the last seven years. It has been a great pleasure. Whether it has been as much of a pleasure on your part appearing in front of us . . .

  Sir Kevin Tebbit: There are times when I did not think I would say this, Mr Chairman, but I am genuinely sorrowful that this is my last appearance.

  Chairman: Thank you.





4   Ev 15 Back

5   Ev 26 Back


 
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