Examination of Witnesses (Questions 60-79)
MR ARCHIE
HUGHES AND
MAJOR GENERAL
DALE CBE
20 JANUARY 2009
Q60 Mr Hancock: Can I ask you what
proportion of your business at the current time is dependent on
operational requirements and what proportion of your staff are
engaged on that?
Mr Hughes: It is difficult to
give an absolute number in terms of what is operational versus
what is not because everything that we do is preparing, maintaining
and going out and back from theatre. A fair degree of our funding
comes via the Conflict Prevention Fund and that is maybe 15% in
the round comes via the Conflict Prevention Fund across DSG. But
most of what we do ends up in operations.
Major General Dale: It is a difficult
question to answer in absolute terms and I will give you a "for
example". One of the elements of DSG's work is often called
the land district load and when I was commanding my brigade ten
years ago we relied very much on what was then ABRO, now DSG,
to come into our barracks to undertake tasks that we could not
undertake in inspection overhaul and repair because my soldiers
were deployed on operations and there was still kit left back
behind in barracks. So that is an indirect support, if you like,
to operations, and there is a lot of that going on. In terms of
equating the source of funding directly to operations, that is
to say those elements of work that attract contingency funding
money, that is vested essentially in the embodiment of urgent
operational requirement equipments on to vehicles, so there is
a direct linkage with the operational requirements with the UOR,
which is funded by the contingency fund. Again, when we look forward
to withdrawing equipment from operations and refurbishing it that
too will be a direct support of post-operation activity and will
attract contingency funding.
Q61 Mr Hancock: Are you working on
the assessment of the equipment that is currently in Iraq and
will actually be removed from the country as opposed to being
left somewhere in the Middle East, or not even bother to be brought
back to this country because of the costs involved and the life
of the vehicles. Is that assessment being carried out by you at
the present time, or by both of you?
Major General Dale: There is a
combinational activity here. There is no doubt that the best way
of conditioning equipment is to do that first hand in theatre
so that you have early warning of what state the equipment is
in and early decisions can be made about where the equipment is
to go and what is to be done to it. It is not until that early
conditioning exercise has been conducted that we can then work
out the sequencing of events and what equipment goes where. There
is a great deal of work being done between my staff, the Permanent
Joint Headquarters, the DSG and other stakeholders in that process
to map that out and that is work that is ongoing.
Q62 Mr Hancock: DARA's rotary and
components element was partly sold off because they were simply
overwhelmed, it would appear. Do you share that view that one
of the reasons behind the sell off was that DARA could not actually
carry out the necessary work in the timeframe that the Ministry
wanted and consequently it was better to offload it. My second
part of the question is, if that was the case then have you recognised
anything in your time now as being head of the Joint Operation
which could quite easily be overwhelmed and you would find it
difficult to cope with?
Mr Hughes: In relation to the
first part I would say no; that was not the reason why we sold
the helicopter business. I would have managed the capacity of
that business to do what was the customer requirement. That is
business; that is what we do. So it was not "Vector now owns
it, we will be doing what they do"; we would be doing it
whatever the requirement was. You have to remember in the helicopter
business we doubled the size in two years. It would be harder
to double it again but we did what was necessary to do. In relation
to the now DSG business, I do not see areas where we could not
deal with the currently envisaged future capacities that are coming
our way. That is why we work very closely with every element of
the General's IPTs; we work with the land command people to get
a view on the workload going forward. We need a decent sight going
forward to enable to react. We can surge relatively quickly but
you cannot do massive amounts of extra work without some degree
of notice and that is why we have regular meetings at every level
of the business to look ahead in sufficient time to manage that
capacity. So I do not see problems in my current capacity.
Q63 Mr Hancock: Taking that point
of looking ahead, do you see that your organisation will remain
profitable if the level of operations, where you are a fundamental
part, were to decline to an extent where you could see the business
profitability being threatened?
Mr Hughes: At some point or other
if the workload disappeared then obviously the profitability of
any business gets affected but we will match the capacity of my
business to suit the workload that is there and provided I have
the notice and the time to do it I will be able to hopefully match
the capacity and the cost of the business to the revenues to retain
the profitability that is required in the business. That is just
part of my planning process and getting enough sight ahead to
do that. The only other major difficulty is if the workload disappeared
very quickly, because you are not then going to have the ability
to smooth or attack your costs to the same extent as the workload.
But I certainly envisage us managing the business to achieve the
required profitability going forward in the current version of
the five-year plan I am working on to give to ministers later
this year.
Q64 Chairman: So you will not be
overwhelmed in capacity terms even though the Ministry of Defence
has still not decided in its timescale for recuperation of equipment?
Mr Hughes: Yes the planning horizons
are enough for me that if and when there is a spike, if that what
happens, I would be able to take whatever action necessary to
address the spike and smooth it to deal, one with my capacity,
and two to deal with the output that the customer requires. If
it becomes a problem and the spike comes unforeseen and we have
not noticed it, I do not envisage a situation where we will be
given a surprise in relation to the amount of work that comes
via recuperation. Some of it might be done via deciding with the
General and his team about prioritising some of the more priority
stuff and the higher priority stuff and you will flex timescales
and some stuff to meet the high priorities.
Q65 Mr Hancock: Can I ask then what
work is being done on getting this timeframe for recuperation
solved, from both of your points of view? From the Army's requirement
for equipment and your ability to carry out the work? Where is
the synergy there that actually allows that to virtually come
from a position where you can say, "This is the timeframe
now."
Major General Dale: Permanent
Joint Headquarters is in overall control of that process and they
have regular meetings with all of the stakeholders. My staff and
Mr Hughes' staff are very frequently in forum with all those engaged,
working out what the demand is likely to be and what the timescales
are likely to be. We are constantly pressing Permanent Joint Headquarters
to let us know sooner rather than later what the overall time
frame is going to be.
Chairman: We will come on to this in
just a moment, General Dale, if you do not mind.
Q66 Mr Holloway: In the papers you
have sent us you described your staff as volunteers and it is
oversubscribed to go out to the theatres. Can you add a little
bit of colour, General, to that, as to how that works? Also do
you consider your capacity to carry out these deployments to be
a part of your main business or is this a nice add-on to what
you are doing now because it is useful?
Major General Dale: Let me give
you two examples of how it works. If there was a vehicle, for
example, which one has deployed into a harsh environment like
Afghanistan and once it has been used to its maximum envelope
you often find that some elements of the equipment begin to wear
fairly quickly, which is out of the ordinary, and you need to
take in hand a rectification, a modification or a programme of
repair. This is often driven by the operational demand to use
that equipment, so there is a sense of urgency about it. In those
circumstances—and it has happened on a number of occasions
already—we are able to turn to the Defence Support Group
who have the expertise and who are familiar with that vehicle
because they go through base inspection and overhaul programmes
with it. They are already trained; they are familiar with the
requirement; they are in the mindset of the military and it is
very easy and very quick for me to turn to the Chief Executive
and ask for that assistance and deploy them fairly quickly. We
would do that and we do it to solve a particular problem. There
is another example in Afghanistan where the Permanent Joint Headquarters
have concluded that it is probably wise now that we are moving
into a campaign footing to establish an equipment support facility
in Camp Bastion, and that is an ongoing process. That is going
to need some expertise and knowledge from people like the Defence
Support Group who are used to setting up production lines and
managing the refurbishment and rebuild of vehicles, and to go
to that location and to work out the facility layout, the facility
requirement, the tool setting processes and practices. So again
I would be using them on a sort of consultancy, if you like, to
enable that project to go ahead.
Q67 Mr Holloway: So that is the equipment
sustainability solution, is it?
Major General Dale: Correct, yes.
Q68 Mr Holloway: Can you please take
us through about what that will do and how it will work.
Major General Dale: One of the
issues is—and I have mentioned them earlier—where
you find suddenly that an equipment has a particular point of
failure, which is only highlighted by the harshness of the environment
and the way in which it is being used. Rather than dribble forward
capacity to address that particular problem it may well be that
it would be more cost effective to undertake a broader modification
programme for the whole fleet. Rather than bring that whole fleet
out of theatre at great expense it is much more cost effective
to address those issues in theatre. But that can only really be
done effectively if you have the right capacity and capability
in the theatre. Looking at the broad environment and the long
term demands it makes sense from Permanent Joint Headquarters'
perspective to establish this equipment sustainability solution.
This is probably going to take, I guess, up to 12 months to establish
it and get it running properly, and then the sort of equipments
and work that will be run through it will essentially be dictated
by the style of operations and the state of the equipment at the
time.
Q69 Mr Holloway: Will any of Mr Hughes'
staff be helping out with tasks that—is it still called
REME?
Major General Dale: Yes.
Q70 Mr Holloway: The sort of tasks
that REME people might otherwise do?
Major General Dale: Yes. Bear
in mind that this is going to be a static facility inside a secure
compound. It is therefore amenable to being staffed and run by
civilian components. That could be a combination of the Defence
Support Group expertise at various stages of the project—in
the early design stage, perhaps in some of the modification upgrade
work on some of the equipments. It could also be forward support
representatives from industry for a particular issue that we have
run through. Let us say, for example, British Aerospace, who are
the design authority for a number of our armoured vehicles, might
decide to deploy forward support representatives to do that piece
of work; or maybe to do an investigation on the particular point
of failure on one of their equipments for which they have design
authority. So it could be a combination of contractors, DSG and
REME soldiers who are on hand and permanently there to make sure
that the facility runs smoothly. So I would probably envisage
REME soldiers being the backbone of it, supplemented and augmented
as demanded by the requirement by DSG and industry.
Q71 Mr Holloway: Has there been a
need for this earlier, in previous years?
Major General Dale: That is difficult
to make a judgment because the operation is only really settling
down into its campaign footing now. It is one of those environments
that have changed continuously. When I was in Afghanistan three
years ago, as the Brits were moving from the north to the south,
we only had 3,500 troops there and the operational requirement
was very different then to what it is now. You have to accept
that the operational environment changes continuously, so it is
difficult for me to say that it would have been a thing to do
earlier.
Q72 Mr Holloway: Presumably it is
more because you have lots of different bits of equipment from
lots of different suppliers than that the stuff has become particularly
knackered in recent months.
Major General Dale: There is certainly
a change in the style of operations and in the nature of it as
it was three years ago. When we first set out in Helmand it was
very largely a light infantry operation, but when you look now
the lessons that we have learnt and the equipment that we have
procured recently and deployed, it is beginning to be an equipment
heavy theatre. There are some quite large fleets of protective
patrol vehicles there and we are just about to deploy some new
tactical support vehicles; and we have improved the mobility of
the Armed Forces in Helmand considerably. So the quota of equipment
that is now held in theatre is radically different from what it
was three years ago. So it is those kinds of developments in the
nature of the operation and style of the operation and its demand
that drive us into these deductions and conclusions.
Q73 Mr Holloway: Most of that kit
has been through UORs so is this partly about how DSG deals with
those, or it is mainly an industry problem, the suppliers?
Major General Dale: I am not quite
sure I understand the thrust of your question.
Q74 Mr Holloway: You have had an
awful lot of UORs and you have now set out the equipment sustainability
solution; is that partly because you have so many UORs that DSG
need to find a mechanism for dealing with it, or is it primarily
industry's problem to sort out the problems with that equipment
when it gets out there?
Major General Dale: If I were
to be fair I do not think it is UOR focused. The UOR equipment
that we deploying is all new and its reliability is generally
quite good. The key here is older equipment like the Pinzgauer,
for example, that has had problems with its hubs. [1]
Q75 Mr Holloway: How old is the Pinzgauer,
forgive my ignorance?
Major General Dale: Off the top
of my head I could not tell you but it is quite a number of years
old.
Q76 Mr Holloway: It was not ordered
specifically.
Major General Dale: No, there
is a balance of equipment in theatre so, for example, you have
legacy equipments like Land Rovers-Snatch, Pinzgauer and RB44s.
You have the Scimitar CVRT vehicle, all of which has been subject
to urgent operational requirement add-ons to adapt it to work
operationally effectively in that kind of challenging environment.
So there is a great deal of work to be done on the fleet in the
round and none of this sits still. There are always new things
cropping up; there are always demands made on these equipments
for which they were not necessarily designed, which need to be
rectified. It is better and more effective to do that through
the equipment sustainability solution than bringing all these
things back at great expense and trying to do them in the facilities
offered by DSG or industry; better do it in the theatre.
Q77 David Hamilton: My question to
Archie is more of a personnel question about the increased activity
where your personnel are required to go out there. Do you have
any problem with that? And is anybody penalised if they refuse
to go, if they choose not to?
Mr Hughes: No, we do not have
any problem with that at all. In relation to the earlier question,
it is a growing part of what DSG do, to deploy forward, not just
to Afghanistan and Iraq but we have a large team in BATUS as well,
for example, supporting the fleet out there. The way in which
we operate is that we seek volunteers from across the whole of
the DSG portfolio and we get lots of people volunteering and we
select them on the basis of their skills for the task in hand.
Nobody gets penalised for refusing to go because they are volunteers
in the first instance and not only do they volunteer to go but
when they come back they volunteer to go again because they feel
part of the Armed Forces and they feel valued with what they do
and they like doing it. In actual fact yesterday we had CDM down
at Bovington who presented seven Iraq campaign medals to DSG employees
who had been more than once and were keen to go again. So I do
not have any problem whatsoever.
Q78 Mr Borrow: You have already touched
on the question of recuperation of equipment, Chairman, but what
I would be interested in getting a reassurance on is that your
organisation is intimately involved with the MoD in the current
discussions and the current plans for bringing equipment back
from Iraq and any possible turns to Afghanistan, and whilst you
have mentioned that you can cope with any spikes presumably coping
with any spikes is pre-determined on the extent of the consultation
with the MoD on any future plans for bringing equipment back?
Mr Hughes: I can definitely give
you that assurance. We are working very closely with the customer
and looking a number of years ahead about the capacities that
we jointly believe are going to come through DSG and we are looking
at all the factors that affect the workload for me and the capacities,
because some of what I do is if an oil tanker is turned around
some of it is quick, and so we are working very closely with the
whole customer community across the range of IPTs to understand
on a programme by programme, project by project basis exactly
what the workload is, and that is absolutely in relation to recuperation
and we need to understand that because we are here to provide
that service to the customer and we do not want to let them down.
Q79 Chairman: You have made a few
mentions of the Defence Industrial Strategy this morning. In November
we heard from the defence industry that by and large they seemed
to consider that the Defence Industrial Strategy is on hold. Last
month we heard from the Minister of Defence Equipment and Supply
that he considered that it was well on course and charging ahead.
Mr Hughes, what is your view about this?
Mr Hughes: The Defence Industrial
Strategy as it currently exists has a clear role for DSG. Although
it was written when it was ABRO and DARA to my knowledge it has
not changed; what we do as an onshore sovereign capability is
cemented into the defence industrial strategy, and that was one
of the pretexts on the setting up of DSG in keeping it in MoD
ownership going forward, and it is one of the things in working
with the customer base in furtherance of Defence Industrial Strategy
that they look to contract with us where it offers the best value
for defence and where it retains the capacity and capabilities
that the Defence Industrial Strategy wish to remain onshore. From
my point of view the Defence Industrial Strategy was and is a
good thing and it enables me to have that contact with industry
as well. So being a Trading Fund it gives me that linkage to industry
and I talk regularly with industry and we are partners with literally
all of the industry players. We contract to all of the main primes
as well as direct to the MoD. So I do not see any difficulty in
relation to the Defence Industrial Strategy at the version one.
If and when version two comes out and we have an input to it and
I am sure it will reflect the current status of DSG.
1 Note by witness: the vehicle referred to
with hub problems is Vector rather than Pinzgauer Back
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