The United Kingdom's Future Nuclear Deterrent Capability - Public Accounts Committee Contents


Examination of Witnesses (Questions 40-59)

MINISTRY OF DEFENCE

WEDNESDAY 19 NOVEMBER 2008

  Q40  Mr Curry: The new boat is a completely new boat, as it were. It is not a stretched Astute.

  Sir Bill Jeffrey: It is going to be a development of everything that has preceded it. One of the things we are doing is to manage the design phase in such a way as not to design in things that will make it harder and more protracted to realise.

  Q41  Mr Curry: If you were a betting man, would you say that we would seek to extend the already intended extension of the Vanguard class life?

  Sir Bill Jeffrey: I am not a betting man. I am an elderly Permanent Secretary.

  Q42  Mr Curry: You have held some fairly sticky jobs. Somebody who has worked in immigration and the prison service, I would have thought, must be a betting man to have got that far. We are going to try and extend it, are we not, because we always do?

  Sir Bill Jeffrey: I meant what I said at the beginning. It is not inconceivable that it could turn out to be extendable, but we cannot count on that. Therefore, the guys who are doing this day by day as their day job are working to 2024. That is the clear instruction they are operating under.

  Q43  Mr Curry: The reason I ask the question is that at the moment in the Trafalgar class for example tours of duty are longer than was originally intended. They come back into port and, because the facilities and expertise are no longer there in the civilian workforce, crews are being kept there to help deal with maintenance. My son served on one for many years so this is first hand information. The boats are clapped out. The crews are clapped out. Because the contract at the heart of it, that you got back to shore and then you went home for quite a long leave, has broken down, marital relationship breakdown is higher than it used to be in the service. When you start extending boats which are getting elderly and tired, I fear that the collateral damage becomes quite considerable.

  Sir Bill Jeffrey: That is certainly one of the factors. These are extremely complicated vessels. Our experience is that things start to go wrong the longer you operate them.

  Rear Admiral Mathews: I do not recognise the picture you paint. The Trafalgar class continues to operate in exactly the same way as we have operated it since it came into service. The way we maintain them has changed little. The contractor who now delivers that maintenance is Babcock Marine who bought out DML. We changed the company. They are older. We are operating the oldest set of submarines that we have ever had, so I fully accept that point.

  Q44  Mr Curry: We are not here to discuss the Astute, although it features quite centrally in this and makes us somewhat uneasy. We are heavily dependent from the point of view of the kit on the United States. There is a reactor issue and then there is the issue about the timing of their submarine development. Because their submarines were designed for a longer life than ours, we are now at a point of slight dislocation in relationships. If I say, "How concerned are you?" you are bound to say that you are not concerned because you have a very close working relationship with the Americans. Things could go wrong. It might not be us that make things go wrong. There could be things that go wrong because of the interdependence. At some stage politics are going to intrude there as well, are they not? We are all facing very difficult economic circumstances and one of the things people tend to do is to let slip orders, push back orders and push back procurement, to defer things. How confident are you that this commands such priority on both sides of the Atlantic that it would not be subject to that?

  Sir Bill Jeffrey: I am confident in the assurances we have and in the quality of the collaboration we have with the Americans. I nonetheless accept, as you say, that we are talking about long time spans here during which situations could change. It is undoubtedly the case, to take an extreme example, that if the Americans ever decided to get out of the submarine deterrent business altogether that would impose substantial costs on us if we wanted to continue. It does not seem very likely to me and at the moment I think we have to operate on the basis of the very high level of cooperation that we have and the assurances, which I think are serious, long lasting assurances, that we have received.

  Q45  Mr Curry: I understand the decision has not yet been taken as to whether we need three or four submarines. Is that correct?

  Sir Bill Jeffrey: That is correct.

  Q46  Mr Curry: That must have huge implications in operational terms as to whether we have three boats or four boats. If we were to decide to have three boats rather than four boats, what is the collateral there in terms of the demands upon the boat and the crew?

  Sir Bill Jeffrey: The starting point is the policy which the White Paper sets out of doing what the Chairman said at the beginning of the session, which we have been doing since 1968, which is to provide what is known in the trade as continuous at sea deterrence. To do that at the moment, we judge we need four Vanguard class submarines because there is always one out of action for one reason or another for reasons that are explained in the papers. It is possible, depending on how reliable the design turns out to be, that in the next generation it would be possible to provide that sort of cover with three rather than four, but we do not know yet.

  Q47  Mr Curry: Can you tell at the design stage? The decision will have to be taken before you build the fourth boat, will it not? Will you have enough operational experience then to be able to tell?

  Sir Bill Jeffrey: The intention is to make the decision much earlier than that.

  Q48  Mr Curry: Exactly, so nothing will be operational before you take that decision.

  Sir Bill Jeffrey: Nothing will be built before that decision.

  Q49  Keith Hill: I would like to focus on risk area three in the NAO Report on governance arrangements and therefore to put some questions about management and communications within management. Sir Bill, on page 22, box six notes that the Programme Board has not yet been required to come to agreement over difficult decisions or trade-offs. What would you say it has achieved so far?

  Sir Bill Jeffrey: The Programme Board is chaired by the SRO and, if you will forgive me, I might ask him to say something about what the Programme Board has done so far.

  Mr Lester: The Programme Board provides direction to the programme when direction is needed and takes decisions when there are particular decisions to be taken. In the run up to Initial Gate next autumn, there will be a range of decisions to be taken. We are coming up to one on the specifications of the common missile compartment and then the next big issue is the design of propulsion plant which will go into the new submarines. It just so happens that up to now we have not come across one of these big decision points, which is why the Programme Board has not taken a decision. It is not a reflection on the Programme Board; it is just that we have to reach the milestones before the decisions are taken. We then provide advice to the Defence Board.

  Q50  Keith Hill: The two decisions you are about to take, you say, are on the missile compartment and propulsion. How are things panning out in relation to those decisions?

  Mr Lester: On the missile compartment, they are panning out fine in the sense that we are in negotiation with the Americans. Our requirements are converging and we hope very early in the new year to reach an agreement with the Americans both on our financial contribution and on the exact specification of the missile compartment to provide us with the long term guarantee of compatibility that Sir Bill was talking about earlier. On the propulsion plant, that is from my point of view the most tricky issue we have to deal with in the run up to Initial Gate, which is having enough evidence to judge the trade-off between initial costs, through life costs and risk to programme schedule between the different propulsion options that we are looking at.

  Q51  Keith Hill: You chair the Programme Board. Who are the other members of the Board?

  Mr Lester: We have the Assistant Chief of Defence Staff (Policy), who is the policy leader in this area in the Ministry of Defence; the Assistant Chief of the Naval Staff, who is responsible for delivering the in-service deterrent and also the manpower for the future deterrent. There is Admiral Lambert, who is Capability Manager for precision attack. He is one of my colleagues in the equipment organisation who is the lead on submarines. We have the Director General Scrutiny, who is in charge of scrutiny for all equipment programmes. We have Admiral Mathews himself of course and the Chief of the Strategic Systems Executive, who is a newly appointed two star admiral who has just literally come into the job. We have representatives from the Foreign Office and the Treasury and the Cabinet Office. In that sense, it is a stakeholder management forum but also a forum where all the people running the individual lines of development are represented.

  Q52  Keith Hill: No reflection on yourself—as the Permanent Secretary said, you are a senior official yourself—but these are all pretty high powered characters. The NAO tells us that you do not have line management responsibility for the other members and you have to work by influence and consensus. One wonders how viable is that approach in the long term against the very demanding timetable we have been talking about.

  Mr Lester: To be honest, I think the Report slightly overplays the influence and consensus point. In MoD jargon, it is basically a two star committee so most of us are at the same kind of level. What I do have authority over is resource allocation. That is one of the strengths of the job, sitting in my current post, because I allocate the money for the vast majority of the future deterrent programme, both for the submarines and for the weapons and the work at Aldermaston. I am quite clear that I am appointed by Sir Bill. I am answerable to the Defence Board and I am responsible for the advice that goes up to the Defence Board. It does not need to be a consensus body. A lot of these decisions are taken at very high level, either by the Board and by ministers inside the MoD or at prime ministerial level, but I do not feel obliged to harangue all these different people in the room until we reach a common view about things. I will put advice up and that is my responsibility.

  Q53  Keith Hill: If push came to shove, you would harangue them, would you?

  Mr Lester: Yes, indeed. My job is to keep the decisions on time to allow us to reach Initial Gate next September. That is my task for the next year. My job is to unblock problems, whether it is problems with particular strands of the business, whether it is financial problems. We have already had some issues over the last few months where, for the work to go ahead on a particular part of the programme, there was not enough money, so I had to make the money available for it. It is keeping the show on the road really. That is the key role of the Programme Board.

  Sir Bill Jeffrey: One of the problems—and this is an issue in this Committee that we have discussed a number of times—is how we deal with the question of the Senior Responsible Owner. The list of participants in the Programme Board that Guy Lester has just given is illustrative of how many different parts of the Ministry of Defence have a stake in this. If you were to have somebody who was the boss of all of them, it would either have to be the Chief of the Defence Staff or me because the structures and the number of internal stakeholders are such that the best thing I think one can do is to identify somebody who is well placed by virtue of position and authority to perform the sort of task that Guy has just described.

  Q54  Keith Hill: Can I now move on to what I take to be the issue of measuring progress in the Board, which is presumably this concept of performance metrics. What are performance metrics?

  Mr Lester: The metrics are things like: to what extent are we meeting the requirement; to what extent are we meeting the milestones for the programme; to what extent are we meeting our financial targets. We are refining those metrics at the moment. They are metrics that the Board will use to judge whether remedial action has to be taken because we are losing the pace.

  Q55  Keith Hill: Paragraph 3.14 tells us that these metrics, which are obviously very important, still may develop half way through the concept phase. Why?

  Dr Hollinshead: Basically, because obviously we are trying to get a feel for the cost drivers that are important to the project and for what information the Programme Board feels it needs as a group to manage across all defence lines of development. One of the things the Programme Board has achieved, other than getting all the stakeholders together, is the opportunity to make a good start on performance management arrangements. One of the things we presented at the last programme management board was a scorecard in which we look at performance. That means how mature are the requirements? Are we meeting CASD? Are we meeting the key requirements? Are we on schedule for the concept phase plan? Are we on cost both against the in year spend and against milestones, and also against the White Paper figures, because we monitor how our designs relate to the White Paper figures? We also monitor risks and dependencies.

  Q56  Keith Hill: Paragraph 3.14 says that they are still not giving you the information you need. Do you accept that?

  Dr Hollinshead: The Programme Board gave us some comments back, which is what we wanted, to say, "This is a comprehensive list but we think this should be a higher priority, or that is something we do not need to see." The NAO report says that by next September we must have a working system. I have a prototype in place that the Board is reviewing and I am confident that well before next September they will have what they want. What they have at the moment is all the information and we are saying, "Which bits of this do you really want to see and which bits are you happy to manage lower down?" That is the process we are going through.

  Q57  Keith Hill: In paragraph 3.15, the NAO tells us that problems in receiving timely information from other teams led to the establishment of the Programme Support Office in April of this year. May I ask what difference this has made?

  Dr Hollinshead: It has made quite a lot of difference because all the IPT leaders—to avoid jargon, those who run the projects that make up the programme—are now members of the Programme Office Board and every six weeks I sit down and review their progress, their finances etc., so that we get one collective view of how the deterrent programme is going, rather than 12 or 13 independent reports to then sift through. We are now on our third review of how everyone is doing and I think again it is starting to work quite well, because I can present back to the Programme Board a single view of how we all agree the programme is doing.

   (The Committee suspended from 4.14pm to 4.21pm for a division in the House)

  Q58 Mr Burstow: I wanted to look at the section dealing with decision making in the concept phase. I particularly wanted to draw attention to paragraph 2.9, where it says that there is an obvious judgment to be made about when to fix the design parameters for the submarine and how much more options analysis work to undertake first. Could you say what assessment has been made of when the last practical and possible time for making a decision actually is?

  Sir Bill Jeffrey: The tension that that paragraph describes is undoubtedly there because you do not want to make the decision too early and fix things undesirably. Equally, you do not want to leave it too late.

  Rear Admiral Mathews: We have been quite clear throughout this process that it takes 17 years to design and build a nuclear powered deterrent submarine. Working backwards, that is two years sea trials, seven years in construction, seven years design and two years in concept. We are quite clear in our mind that the concept phase needs to be two years if we are going to stick to our programme. You will recognise that I have just given you two, seven, seven, two, which is 18 years, not the 17 years that we have. We are already planning therefore for a slight overlap between design and construction.

  Q59  Mr Burstow: How much overlap?

  Rear Admiral Mathews: One year.



 
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