Defence Equipment 2009 - Defence Committee Contents


Examination of Witnesses (Questions 120-139)

GENERAL SIR KEVIN O'DONOGHUE KCB CBE, DR ANDREW TYLER AND REAR ADMIRAL PAUL LAMBERT CB

25 NOVEMBER 2008

  Q120  Mr Jenkins: I am in a bit of difficulty now on two fronts: firstly, the principle front, I thought the costs of operations were met by contingencies, and the cost of damage to any equipment being part and parcel of the operation would be funded out of the contingency. Secondly, exactly on what timescale do you do your accounting? I should have thought, having operations that have gone on for three months or four months, yes, you would have difficulty in costing it out; but these operations have gone on a little longer now. Are you telling me that the cost of repairing and maintenance of operational equipment for five or six years ago has yet to be allocated?

  General Sir Kevin O'Donoghue: No. In the first of your two points you make you are absolutely correct. The costs of those operations are covered by the contingency Reserve. The cost of repairing vehicles that are required to be repaired, replacing and buying UORs, the cost of those operations is covered by the contingency Reserve. That is on a continuous basis, as Dr Tyler has said. What I thought we were talking about was, if one of these operations ceases and then everything comes out of theatre, if that were to happen, who then pays for the cost of doing whatever needs to be done to it? Bear in mind, a lot of it will have been brought up-to-date, brought up to the most recently required specification anyway, and that is paid for out of the contingency Reserve. We are talking about something which is a bit of an unknown here, and that is our difficulty.

  Q121  Chairman: Do you spend the money before you know where it is coming from?

  General Sir Kevin O'Donoghue: No, because we are still in theatre. Everything that is being repaired—everything that requires to be recuperated, if you like, on an ongoing basis—is paid for by the Treasury. I thought your question was about when something stops everything comes out and is sitting there who pays for that to be recuperated? That is quite a difficult debate to have until we know how much has to be spent on doing what to it, and what the requirement is.

  Q122  Mr Borrow: Is essentially the argument that if kit is brought back out of theatre if that kit had been used in ordinary training exercises the funding of bringing that up to scratch would come from your ordinary budget?

  General Sir Kevin O'Donoghue: Yes, correct.

  Q123  Mr Borrow: But there will be extra costs because it had been in theatre, and therefore there will be a debate as to what proportion of that cost when it comes out of theatre should be met from your ordinary budget, and what proportion should be met from the contingency Reserve, and that is the key issue which has not been resolved?

  General Sir Kevin O'Donoghue: Indeed.

  Q124  Mr Jenkins: We did bring a lot of equipment home from Iraq so that was repaired and maintained. Who picked the bill up for that?

  General Sir Kevin O'Donoghue: The answer is that I do not know. I would have to come back to you on that. I do not know I am afraid.

  Q125  Chairman: We hear that the Harrier Force is coming back from Afghanistan, to be replaced by Tornados. Who will pay for the cost of recuperating those?

  General Sir Kevin O'Donoghue: The Harrier Force is in very good condition and the aircraft that are out there do not need recuperating. The aircraft that are there are fit to fight. They are at the standard for theatre entry and they are good to go.

  Q126  Chairman: So why are they coming back?

  General Sir Kevin O'Donoghue: This is to give the Force a rest. It has been out there for five years. This is very much the Chief of the Air Staff's business to advise the Defence Board and Ministers on what should be deployed where. This is not an equipment issue.

  Q127  Chairman: We heard in a debate in the House of Commons last week that £860 million has been spent on fine-tuning the Harriers to get them operating as well as they can in Afghanistan. Is that money that was Harrier-specific; or is it money that could be applied to UORs or to equipment that, like pods could be moved to perhaps the Tornados that are going to take their place?

  Rear Admiral Lambert: Most of the urgent operational requirements for Harrier are Harrier-specific, and another set of UORs are being staffed through before they can be turned into a Tornado Force. The Harrier Force is being brought back, not only to give the Force a rest but also to give the Force the ability to be able to be deployed on other operations. They have been in theatre now for five years and their tasking has been very specific. The more general tasking that one would want for aircraft has not been done. That wider training piece and wider deployability piece is why Harrier is coming home. The GR4s are being fitted with the new UORs at the moment.

  Q128  Robert Key: General, DE&S appears to be supporting the frontline very effectively. In January last, when you appeared before the Committee, we asked you "what keeps you awake at night" and you replied "current operations". Is that still the case?

  General Sir Kevin O'Donoghue: Yes, it is. If anything were to keep me awake then it is support of current operations. That is where it is so vital that what we do we do accurately and effectively.

  Q129  Robert Key: What are those specific issues about current operations that concern you most?

  General Sir Kevin O'Donoghue: Do the Forces in theatre and the Forces in contact have the right equipment? Is it the best equipment that we can give them? Is it properly integrated? Do they have the right amount of combat supplies, ammunition, food and so on? That is going well. I think the answer is: yes, they do. To answer your specific question: that is what I do worry about.

  Q130  Robert Key: What would be top of your wish list for supporting current operations?

  General Sir Kevin O'Donoghue: Things we have perhaps not quite got right yet, I think it would be more strategic air. I think the great raft of other issues—and I am skating round some of the technical issues here which I do not want to talk about in public—I think we are doing alright on. I am happy—and this comes from the commanders in the field—that our Forces are the best equipped that they can be. I do not know if you saw Andy McNab over the weekend, if I can quote him, saying that the American infantry are looking to use the British infantry's equipment. That is an interesting comment.

  Q131  Robert Key: It is a great compliment.

  General Sir Kevin O'Donoghue: I think that is where I would come from.

  Q132  Mr Crausby: We have an elderly transport aircraft fleet, so to what extent is that affecting your ability to support current operations? Do you have a fallback position if, for example, TRISTAR was unavailable and needed maintenance?

  General Sir Kevin O'Donoghue: Can I answer in two parts. First of all, the air bridge is successful. Something like 80% of aircraft leave Brize Norton within four hours of the time that they said they would, and that is not bad bearing in mind the challenges they meet at the other end. The plan to deal with aircraft on the ground is a hub and spoke method—it is spare aircraft and so on—that works. What we do about delays to incoming aircraft, aircraft that we are procuring (A400M is a good example) is a secondary issue, and I am very happy to talk about that if you wish. I am satisfied that the air bridge is workable. I think it is fragile and that, in answer to Mr Key, is my biggest concern at the moment.

  Q133  Mr Holloway: Is there a crunch looming in terms of the air transport fleet in 2012 or 2014?

  General Sir Kevin O'Donoghue: We have got a number of alternatives. We have got the C130Js which are fine; we have got the Ks which should be going out of service—we could extend them at a cost, that is one option; we could try to bring forward the A330s from the future strategic tanker aircraft—that is another option we are exploring; we could buy more C17s—that is another possibility. There are a number of options sitting on the table. There are also some commercial options as well—we could hire aircraft. There are a number of options sitting on the table. The key here is to find out what the schedule for delivery of the A400M is, and that is the challenge at the moment.

  Chairman: We will come on to that, as you no doubt could have predicted, later on!

  Q134  Mr Crausby: What about transport assets in general: are you content with other assets, or other non-aircraft assets, such as ships, land vehicles and helicopters?

  General Sir Kevin O'Donoghue: Yes. Ro-Ros are good—they work well; and shipping we can take up from trade fairly easily to get the sea line of communication out to Karachi or out to Iraq. I am happy with that. Helicopters—you can always use more helicopters. We can increase the flying hours—over 35% in theatre—and there are more aircraft on the way. Yes, I am satisfied. As I say, one of my highest risks is the strategic air as far as transport is concerned.

  Q135  Mr Borrow: From what the Committee have seen and heard the Urgent Operational Requirements process has been a success. Is that still working effectively? How effective is that process currently? Are there aspects of the process that you would wish to see improve further and, if so, what are they?

  General Sir Kevin O'Donoghue: Yes, it is working successfully. It is continuing to work successfully. You can always make improvements, but I am satisfied that the UOR process is working well. Let me just ask Dr Tyler under whose remit it falls for some more details.

  Dr Tyler: This is practically our top focus in ensuring the delivering of UORs. Earlier this year we established a UOR programme office whose specific remit was to look across all of our areas of UOR activity, and make sure that we were continuously trying to improve delivery. Indeed, the numbers for this year so far have improved on last year's numbers. Last year we were delivering 67% of our projects at their 50% forecast; and 86% at their 90%; and this year we have improved—79% of them being delivered at their 50% forecast; and 89% at their 90% forecast, so we are on an improving trend. One of the things that is an increasing challenge for us is the technical complexity and scale of some of the UORs, the sophistication of them. Some of the pieces of equipment we are putting in under UORs previously would have been small core, programme projects in their own right; but of course what we are having to do is get them into theatre very, very quickly. That is certainly putting pressure on our resources and the time and effort we have to spend on prosecuting the UORs. Currently there is something of the order of 700-750 of our staff engaged in the UOR activity, and we are making sure that across our organisation we are balancing our resources across the whole of our current projects and support to ensure that the UORs are getting the priority. Overall we are certainly on an improving trajectory on what was originally a good position in the first place.

  Q136  Mr Borrow: In February 2006 Lord Drayson, who was then at the MoD, appeared before the Committee, and he said that he wanted to see the best aspects of the UOR process applied to longer term projects. I would be interested to learn what has happened since then in terms of applying the best part of the UOR process in ordinary procurement processes; in particular the extent to which there are aspects that could actually speed up the ordinary process of procurement of major projects?

  Dr Tyler: I think this is something we have thought a lot about, and there are some areas like, for example, the way we are using our resources more flexibly, which is a lesson we can pull over. I would approach this one with some caution though, because the UORs are very different in their nature from the longer-term core projects. We do tend to trade quite rapidly between performance, cost and time, because time is obviously a very, very critical variable with these projects. Certainly hitherto we have not paid a huge amount of attention to enduring support solutions, because they are designed to be short-term requirements. That is now changing; and one of the things that is increasing our UOR activity is the need to have a more enduring support solution to go along with some of these UORs. The other thing is that, generally speaking, they are not implemented within an integrated framework of defence capability; they are put in as individual measures. Although we do our very best to try and ensure that they are integrated as best as possible within the wider infrastructure, the speed at which these are being implemented means that they are often coming in as single item, almost stand-alone equipment with minimal integration. When we are looking at the longer term strategic programmes those are areas which we would have to think very carefully about if we were going to compromise. What that means is that when we are looking at the lessons we can pull through, we have to look quite carefully. I think one of the positives, and we are challenging this, is the speed at which we perhaps make decisions, and some of the administration that goes along with the projects. Those are areas which you could argue, up to a point, are non-value-adding activities in the acquisition process. Obviously we are demonstrating that we can short-cut those through the UOR process. Bear in mind that some of those short-cuts in themselves are compromising the absolute degree of scrutiny that is going on on some of these projects, because the urgency of the requirement overrides that.

  Q137  Mr Borrow: Are you really saying that the optimism that seemed to be there two and a half years ago has not actually been fully justified?

  Dr Tyler: I think we are doing what we can, but we also very conscious of the law of unintended consequences here. If you start applying this sort of process too liberally to what is a strategic core programme, I think our view is that you would find a lot of unintended consequences coming out as a result of that.

  Q138  Chairman: Has this UOR approach meant that, for example, the vehicle fleet is now much less cohesive and coherent than it previously was?

  Dr Tyler: Yes, I think that is the case.

  Rear Admiral Lambert: With trading almost in every area other than time you will end up with non-integrated systems. It is the criticism of UORs now that we have not integrated well enough, and that is because we have tried to get them to theatre as fast as we can. It is a criticism we accept, and we are now going back to see how we can integrate some of these systems together to get a more cohesive Force.

  Q139  Mr Jenkins: I was very interested in Dr Tyler's answer, because it is not about the piece of equipment Lord Drayson was talking about, I think he was talking about the process and the culture. It is this culture of "let's make sure everything is nailed down, screwed and painted three times" that takes up so much time and so much money there is nothing left for the actual project. Unintended consequences are in all walks of life, so do not try and make this a reason why it is not done; but let us make sure we can streamline the process. I can get you legacy projects that would make your hair curl in the MoD. They are an absolute national disgrace because, as a client, you were not that clever: a contract was taken for a ride for years. Are you, through UORs, becoming a cleverer, more intelligent client; and can the process be speeded up so it does not become a long-term legacy project, but can deliver for the amount of people we need to deliver to—the ones at the frontline? That is all we are asking. Has the culture changed?

  General Sir Kevin O'Donoghue: I think the answer is, yes, it has. We are much better now at accepting that it is very much more effective to have an 80% solution tomorrow, than a 100% solution in 10 years. That is one area. I think we are much better at the scrutiny and assurance process. We still need to scrutinise and assure these projects to make sure they are value for public money but we are much slicker at it; we are much better at it. Yes, there are a lot of things that we are doing very much better; but we do need to remember a UOR is going into theatre for perhaps six months, perhaps nine months, at which point life will have moved on—either the threat has changed or the requirement has changed and we need something else. Something out of the equipment programme is probably there for 15, 20, or perhaps 30 or 40 years. We just need to draw this balance between rushing in for a UOR which is fine for the circumstances of today, and not rushing in and doing that for something that will have to be adjusted. This is all to do with open architecture and incremental improvement as we go through its life; but the base vehicle has to be thought through so that it is upgradeable as circumstances change.


 
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