Examination of Witnesses (Questions 40-59)|
WEDNESDAY 19 NOVEMBER
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
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
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
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
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
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
Q52 Keith Hill: No reflection on
yourselfas the Permanent Secretary said, you are a senior
official yourselfbut 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
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 problemsand
this is an issue in this Committee that we have discussed a number
of timesis 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
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
Dr Hollinshead: It has made quite
a lot of difference because all the IPT leadersto avoid
jargon, those who run the projects that make up the programmeare
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.