Ministry of Defence Annual Report and Accounts 2007-08 - Defence Committee Contents

Examination of Witness (Questions 160-179)


12 NOVEMBER 2008

  Q160  Mr Jenkin: With the greatest respect, Secretary of State, we all know what the defence chiefs are saying both in private and sometimes even in public about the shortage of resources for defence.

  Mr Hutton: Show me a quote where someone has said that the Armed Forces are not capable of defending our country.

  Mr Jenkin: I have not said that.

  Chairman: We are now going to move onto people and equipment.

  Q161  John Smith: In the 2007-08 Annual Report there is a very worrying trend and that is the continuing decline in satisfaction levels amongst Armed Forces personnel. Why do you think this is? What do you think you can do as Secretary of State to try to reverse that trend?

  Mr Hutton: I think there are signs of some modest recovery in that position. I think we have made a very real and substantial and sustained effort to try to address some of those morale issues and we have tried to do so on a number of different levels. A very important issue for morale is the kit that you are issued with and I think that will reflect the level of commitment that you yourself detect on the part of government, tax payers and everyone else to give you the tools you need to do your job properly. The level of satisfaction with kit is rising. I think the set of proposals, the 40 measures that I referred to earlier, about addressing some of the recruitment and retention issues in the round have been warmly welcomed. Levels of personal satisfaction in the Army, Navy and Air Force are actually at very high levels. It is the highest level I have ever seen in any department I have worked with. There is an 80% pride in the job and so on; I wish there were other parts of government where we saw that kind of score in attitudinal service. I have worked in departments where the figures are definitely on the wrong side of that line.

  Q162  John Smith: A factor that comes up repeatedly is the X-factor pay and we wonder if you have any plans to increase that.

  Mr Hutton: These are ultimately matters that the Armed Forces Pay Review Body looks at every four or five years. It was adjusted last year and I think it was increased by 1%. It is right that the Armed Forces Pay Review Body should look at the X-factor. We try very hard in the evidence we give and the resources we provide to be in a position to respond to the recommendations of the Armed Forces Pay Review Body in the full which we have been able to do in recent years. I think the X-factor, complicated methodology, very important that there is such a factor adjustment in armed services pay. I think it will be two or three years before the X-factor is looked at again by the Armed Forces Pay Review Body.

  Q163  Mr Borrow: Are you concerned about value for money so far as the MoD is concerned and also about the level of equipment our Armed Forces have? You mentioned earlier your recognition in terms of equipment and you felt that that perception was wrong, but I got a hint from an earlier reply that you recognise things need to be done on the value for money front. I wonder what you feel needs to be done to change public perception in terms of the overall efficiency and effectiveness of the Ministry of Defence.

  Mr Hutton: We have to deliver more equipment on time, we have to deliver more equipment on budget and we have to meet more of the key user requirements that the chiefs and services have for those items of equipment. We are focussed on trying to improve performance in all of those areas. The new Commercial Director in the department has brought a wealth of private sector expertise and experience into play and I think it is important that that happens. I think on the other side of that coin—there are always two sides to that coin—one thing that has struck me, looking at the range of equipment issues in the last month or so, is that it is right that we focus on value for money and the CSR settlement has imposed a very substantial set of facility disciplines on the department to improve value for money: 5% efficiency gains that have to be done year on year. We have to generate those savings in order to get the resources that we think we need. We have plans to reduce the admin costs and overheads, reductions in the head office and so on. However, the other side of that coin—I think we should never lose sight of it if we can avoid doing so—is that the equipment we buy for the Armed Forces (although some equipment programmes have been beset with difficulties) in terms of capability is significantly an improvement on what it is replacing. The Type 42/Type 45 debate I think is a classic example of that where Type 45s are a league above and beyond the capability and range of the Type 42s. I think therefore we need greater utility, we need better value out of the assets that we are acquiring but I think the department in many respects has a good reputation when it comes to exploiting technological advantage and providing the Armed Forces with some very, very capable bits of kit. I do not think we should lose sight of that as we ponder over the nuances of the argument about value for money and defence inflation.

  Q164  Mr Borrow: Would you refute the arguments that some make that the MoD should not have consideration for British industry and the need to buy bits of kit and large pieces of equipment within the UK both from a strategic and industrial point of view and should simply be prepared to buy off the shelves from whoever is the cheapest supplier of a particular kit?

  Mr Hutton: I think the Defence Industrial Strategy which we published a few years ago has answered that question very clearly. We have to strike the right balance in all of this. I think the British defence industry can and does provide equipment and products of inestimable value for British Armed Forces. I think we should do everything we can to help sustain sovereign defence capabilities in a number of very critical areas. The Defence Industrial Strategy tried to set those out. I think it is a balance we have to strike here. We must retain the ability to equip and provide the vital kit that we need from within our own defence industrial base if we are going to retain essential sovereignty in defence policy. I think there is a balance here but I think it is very important that we see the whole picture. We have to see the defence industrial base. Of course a successful defence base here in the UK can actually help us address some of the value for money issues that you have described. Nowhere is that more evident to me than in the area of exports where we have to get right behind our defence manufacturers in the exporting work that they do because that can help address some of these knotty problems about value and marginal costs and everything else that bedevil defence procurement. My view is that the Armed Forces, the Ministry and the defence industry really can and should and are working well together to achieve all of these mutual objectives. I do not think there is any real dispute now—maybe there is among some of the theologians on defence policy—and I think we have got to see the defence industrial base alongside the needs of the Armed Forces here.

  Q165  Mr Borrow: On the public's perception in terms of our military capabilities, there have been quite a large number of high profile calls in the last 12 months for an increase in defence expenditure. Would you recognise that there is a danger that unless public support for the military is maintained to ensure that there is sufficient resources for the MoD to do the job that it is expected to do that will become more and more difficult to sustain particularly at a time when there are pressures on other areas of public expenditure?

  Mr Hutton: It could and that is why we have to avoid it happening. My personal perception is that the level of support for the British Armed Forces has probably never been higher than it is today in my lifetime. That, I think, is in direct relation to the operational deployments. There are still people who dispute the deployment to Iraq, there are some who dispute the deployment to Afghanistan, but I think where we are united I hope as a nation is in the work that the Armed Forced do. They do not get a say in whether they go to Iraq or Afghanistan; they do not get a vote; there is no trade union for them; they go and do it for good—maybe old fashioned—reasons, but they are thoroughly good ones: love of country, pride in the Armed Forces. Collectively I think in this country, in this House, if we can make common cause in defending those values that would be a very good thing to do.

  Q166  Mr Borrow: Which would be the top priorities for the department in implementing the recommendations of the National Recognition of our Armed Forces report?

  Mr Hutton: I think very recently the Minister for the Armed Forces set out how we are going to take the Recognition Study forward. I know there are many Committee members here who have taken part in some of these parades, for example, and they are pretty moving occasions. I think we can help sustain confidence and support the Armed Forces by doing that and other things. I think the public love to see the Armed Forces out on the streets with the drums and the flags and the bayonets. The more we do of that the better.

  Q167  Chairman: You mentioned the Defence Industrial Strategy. Who within your department owns that Strategy and who is driving it forward? We had a real sense of who owned it when Lord Drayson was minister, who owns it now both at a ministerial level and at a level within the department?

  Mr Hutton: The Minister for Defence Equipment is the Minister who has, as it were, day to day responsibility for the Strategy. I decided to chair the National Defence Industry Council because I am very, very interested in this work of the department. In addition to operations which I described as my focus, the equipment programme for anyone who does my job is going to be in your face day in and day out. Relations with industry are very, very important to us so I am going to be very heavily involved in this as well. Quentin has the day to day responsibility but I see myself as very, very closely involved in this as well.

  Q168  Mr Jenkins: If I can take you back to public perception, you were quite right, 83% of our public rated our Armed Forces as best in the world. When it comes to the MoD there was a different perception and they blame the MoD for the lack of equipment. Is it just the MoD itself, is it you and the MoD, is it the political side as well? What are you going to do to start changing the public perception in regard to the equipment and how could the MoD help?

  Mr Hutton: I know my limitations; there is probably not a lot I can do in the short term to turn round those images and those perceptions. However, we are going to try to do what we can. One of the most important and interesting things here to consider is that I know there is a temptation to see the Ministry of Defence as this vast bureaucracy that is simply designed to try to stop things happening and make things more complicated. That is completely untrue. I think in a number of very important areas if the MoD were here and were able to blow their own trumpet there are things they can point to and look at which are very significant things that have made life different in a positive way for the Armed Forces on the front line. The urgent operational requirements have been a great success. We have converted very, very complicated equipment ideas into equipment on the ground in six months. We should learn a lesson from that for the wider equipment procurement programme. The MoD is working flat out to support our guys and it annoys me actually when people look at the MoD and say it is just a bureaucracy that gets in the way; it is not. The other thing I would say about the MoD—all of you will know this because you are very closely involved in all of this—is that it became very clear to me on the first Wednesday I was in my department which is uniform day in the MoD, half the people had uniform on. This idea that the MoD is this sort of bureaucracy of civil servants out to trample on the Armed Forces, forget it; it is not. It is an integrated part of the Armed Forces. It needs to be as integrated as it possibly can be. I am not speaking through a sense of frustration, things happen too slowly; we are trying to address that point. I think there is more we can do.

  Q169  Mr Holloway: A recent article in Janes Defence Weekly says that you are trying to "bring clarity to British defence policy after a period of considerable drift and confusion" which I guess is what you have also been saying. What about how we bring clarity to the area of defence equipment? What is your main priority? You have already said that it is in terms of having the right stuff for operations but how is that going to play out?

  Mr Hutton: I think the equipment programme is designed to deliver the long term core capabilities that we set out both in the SDR and in subsequent white papers so it is heavily focussed on providing us with an effective expedition capacity capability, new and more modern and effective equipment for the Army, the future rapid effects system is a very important part of that. Of course for the Royal Air Force, they are in the middle of a fundamental re-equipment process. I think it will be quite difficult to remember a similar time when just about every level in the RAF and every type of equipment is going through this major programme of renewal and investment. I have not seen this article in Janes but it sounds like a good one actually. I think the clarity around the equipment programme I believe is there. It is focussed on these really important strategic long term core capabilities that will mean the ability to deploy expeditionary forces over air, land and sea to make sure our guys have the most up-to-date kit that they possibly can have. I think there is clarity around that. The frustration is about the delay but I think the equipment needs are clear.

  Q170  Mr Holloway: What about programmes like carriers and Future Rapid Effect?

  Mr Hutton: We have been right the way round the houses on the carrier and we have brought people together on the carrier, we have committed ourselves to two carriers. We should just get on now and produce the kit.

  Q171  Mr Holloway: Are there any programmes that are looking like being cancelled or deferred?

  Mr Hutton: I am not going to comment on particular programmes because we are looking at a range of programmes in the equipment examination, but we have made a decision on a carrier. Once you have got to the point where we have on the carrier, it is time to get on and do the carrier. I think the carrier is definitely going to proceed. It is fundamental to any conception of an effective Royal Navy that I can envisage. It brings with it a whole range of other equipment priorities: anti-submarine warfare, above the air and below the sea and so on, frigates, destroyers. It comes as a package and we have to configure the Royal Navy accordingly. I do not want to speculate about individual programmes. I have said a lot about the carriers simply because that is the most obvious one to say something about. We have done the deal on the carriers and I am surprised there is still debate going on.

  Mr Holloway: I totally agree with what you said earlier that our Armed Forces in Afghanistan, certainly when we go there, are superbly equipped, but there are these huge holes. We have known that we were going to be involved in Afghanistan for a considerable period of time so why is it that Jock Stirrup in April is reported to have been in Musa Qala and been horrified to see Snatch Land Rovers being used? Why is it, when we have been there for three years, that the very first brigade were whingeing about not having enough of the right sorts of helicopters? Why is it that we have so few people who speak the languages? Why is it that we only get the medical stuff right when the tabloid press make a fuss about it? Is there some sort of problem at the heart of the MoD that we cannot get some of these things right?

  Q172  Chairman: Secretary of State, could you answer that question in one minute, please, because we need to keep this under control.

  Mr Hutton: If I have a minute I will not be able to answer that question.

  Q173  Mr Holloway: Can I make it really easy for you then? In 2007 this Committee was told by General Houghton that Snatch would be withdrawn by the autumn of that year. Why is it that Snatch has still not been withdrawn completely? Is there a problem with the MoD?

  Mr Hutton: I have not seen General Houghton's comments on the Snatch so I do not want to get drawn into rebutting or otherwise what was said. The advice that we have consistently received is that Snatch has a role to play in operational deployments because it is a highly manoeuvrable vehicle, but it has to be deployed in the context of appreciable risks. That is why we have spent a huge amount of resource—

  Q174  Mr Holloway: Late.

  Mr Hutton: Over the last two years we have been redeploying Mastiff, we have Ridgback going in, we have Jackal going in to meet the threat. The threat has changed. We have tried to adapt our deployment to meet a different type of threat and the threat is a very real one now from IEDs, landmines and other very, very dangerous weapons that have been deployed against us and our guys must have better protective vehicles. I hope by the end of next year we will have 1200 new and better armoured vehicles to deploy in theatre which I have been advised will meet the operational needs of the theatre and we have pulled our finger out in the way I have tried to describe to get that kit out as quickly as possible. We have done so at a speed and at a rate which I think it unprecedented in modern British military history. Yes, you can point the finger if you like, but what I do not believe is fair is to say that the MoD, including the service chiefs and everyone involved, has not been aware of the dangers and risks and tried to mitigate them as far as they possibly can. I have driven in Snatch in Afghanistan by the way, you probably have as well; it has a role to play in moving people about but it has to be in the context of where is the risk. If the risk of IED and landmines is higher—

  Q175  Mr Holloway: Then you use helicopters.

  Mr Hutton: We have increased helicopters by 60%. We have a 60% increase in helicopter hours available for our guys and we are looking to do more. I would like to get the Merlin fleet out here as quickly as possible.

  John Smith: Taking up the remark about the tabloid press leading changes in medical support services, this Committee drew the opposite conclusion and in our report we pointed out just how good medical services were for our Armed Forces. My question is about equipment. There is no point in introducing 21st century equipment to the Armed Forces unless we have 21st century technical training to support that equipment. Secretary of State, will you be as committed to the defence training rationalisation programme as was your predecessor?

  Q176  Chairman: The correct answer is "yes".

  Mr Hutton: Okay, the answer is yes.

  Q177  Mr Havard: The question of rebalancing and particularly equipment: we have been told is that there is a short examination taking place which will be concluded by Christmas. We were wondering how short was short, given that it started in the summer. Within that the equipment programme will obviously deal with current frontline activities. Part of the concern we have is how is that going to be related to recuperation given that there is so much money and resources linked in with legacy policies and legacy issues. Perhaps you could make some comment about whether or not that short term equipment programme review is going to be done by Christmas and how will it inform the change of the planning assumptions that we were told were going to take place in March? Does that still apply?

  Mr Hutton: I think on the equipment examination it will conclude in the next few weeks. I do not want to crack a joke, but if it started in the summer and concluded by the end of the year in MoD terms that is short. I think we are getting at this as quickly as we can. As far as the point about the planning assumptions are concerned, I made it clear earlier that we continually look at what we can do, what we ought to be doing and so on. The point about recuperation you were making is a really, really important one. There is a lot of work going on in the department about this. I think this might benefit from a briefing from the Vice Chief of the Defence Staff who is leading the work on recuperation. As I said earlier, it is going to take time. We will not get back to where we want to be any time in the immediate future but I think we can start by short, small scale operations maybe as an initial focus of restoring some capability around that area. I think VCDS is probably the best person to take the Committee through a fuller briefing if that would be helpful for you.

  Q178  Mr Havard: I assume the Chairman will say yes to that. I think that would be a very good idea because it is clearly central to the argument about how you deal with the problem of equipping for the present and the immediate future and how you balance that against long term equipment needs. My concern is how do you balance the two? Clearly the UOR process (Bulldog, Mastiff, the dogs of war) that we are employing to deal with immediate equipment needs is very good, but it has implications for FRES and the future equipment programme. How do you balance the two. If recuperation means that—as we understand it—we are not going to be able to do large scale operations in any sensible way until 2017, then those are particularly important issues that we would like to discuss.

  Mr Hutton: I would probably want to challenge that last bit.

  Q179  Mr Havard: Good, challenge it. There is a lot of rumour about the fact that the one is prejudicing the other.

  Mr Hutton: I think the current scale of operations is going to change very fundamentally during the course of the next few months and I think we need to factor that in. The point you make about the relationship between the core equipment programme and the urgent operational requirements is very important. Again I do not have a quick answer to that question; it does raise pretty profound issues. We should just reflect on this one obvious fact, someone mentioned the Future Rapid Effect System earlier and how important it is because that is an attempt to look ahead 20, 30, 40 years and give ourselves some capable platforms on which we can adapt and build. In the process of the last three years we have actually acquired 1200 new armoured vehicles and we have to be aware of the capability that that represents as well. FRES remains a fundamentally important programme for the Army. We are looking at aspects of FRES in the equipment examination at the moment, as you would expect; there is nothing outwith that. We are looking at how we can meet the needs of the Army taking into account the obvious addition to the armoured vehicles strength of the UORs.

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