Examination of Witnesses (Question Numbers
80-99)
AIRBUS, BAE SYSTEMS,
ROYAL AERONAUTICAL
SOCIETY AND
A½D½S
3 NOVEMBER 2009
Q80 Miss Kirkbride: That leads into
the next question quite well, which is also to Airbus. Mr Keen
mentioned the Technology Strategy Board, but in your evidence
you say that you are concerned that funding for the Technology
Strategy Board is constrained and claim that recent bid subjects
have not been linked to the strategies defined in the National
Aerospace Technology Strategy. Can you explain that?
Dr Williams: Coming back to the
point we were discussing a little earlier, the linkage between
NATS, the technology roadmaps and then the funding mechanisms,
whilst there is undoubtedly a driver within the TSB to demonstrate
impact on any funding that it proposes, the linkage between the
funding bids that we have seen of late and the NATS strategy have
not been explicit and clear—at least, not to us. I do not
have an example to hand. Perhaps I could furnish you with one
or two specific examples to make that point clearer. That linkage
between the National Strategy, the technology roadmap and then
bidding arrangements is one that we would like to see far clearer
than we are currently seeing today
Mr Keen: Perhaps I could give
an example from our perspective. It is in the area of unmanned
systems again, and it is the ASTREA programme—the Autonomous
Systems Technology Related Airborne Evaluation and Assessment.
Q81 Miss Kirkbride: What does it
do?
Mr Keen: It is a programme looking
at how in future we can develop the system for the safe, routine,
unrestricted use of unmanned systems in UK airspace. If you think
about it in the overall scheme of developing unmanned technologies,
it is absolutely an underpinning programme. Because of funding
difficulties it was first broken into two phases. The first was
worth £32 million and jointly funded between industry and
government, several regional development agencies, several companies
and the TSB. We have just been going around the buoy of the second
phase, having successfully completed the first phase, and that
would be worth £36 million. Although it is clearly within
the overall approach to the NAT Strategy, to put it bluntly it
has been like pulling teeth to get the TSB to a position of funding
this absolutely central programme. That is not because they do
not see the value in the programme, I am absolutely sure; it is
because they have a number of different programmes to squeeze
into their budget according to key priorities.
Q82 Miss Kirkbride: Key priorities
set by the Government?
Mr Keen: Yes.
Q83 Miss Kirkbride: That brings me
neatly on to the last question of mine. There is a view that Aerospace
has had all the money in the past, that loads of money has been
thrown at it, and you are not fashionable any more because we
are doing "green" or something else. Do you think that
is true?
Mr Godden: Yes. I have noticed
in my time here, two years, that our success is a problem. The
success of demonstrating our economic impact, the success of getting
funding, the success of having a National Aerospace Technology
Strategy has created a bit of a benchmark for other industries
which have come on very strongly to the TSB and other government
bodies with similar sorts of approaches. I have seen it happen
in front of my eyes. It goes along the following lines: "They've
got more than their fair share"—whatever that means—"and
therefore we need to divert a bit to demonstrate that we are not
giving more than a fair share to aerospace." This is a bit
like the Rolls-Royce argument we were talking about earlier. It
is absolutely the right thing to do to fund at this level. It
has been thought out. It has a long-term strategy to it and it
has short-term programmes against it, and we are in heavier competition
with other sectors and we are not as favourable because of two
things: the green agenda and the slightly anti-defence culture
that still sits somewhere in certain corridors. I answer the question
bluntly: yes.
Mr Mans: Government should be
backing winners, not picking winners. Aerospace is a winner. It
has been backed in the past. That means that it is a much lower
risk if you back it in the future, so we maintain our position
in the world, rather than cast around for something that might
possibly be a winner. Bureaucrats are not very good at that.
Q84 Miss Kirkbride: Do either of
the other two companies want to be so political as to comment
on this question?
Dr Williams: I wanted to come
back on the environmental question that you raised. Aerospace
contributes 2% of CO2 emissions and yet if you read the newspapers
or listen to the radio you would think it produced 98% and not
2%. However, if you looked at the research and technology into
improving that performance, certainly Airbus's efforts towards
achieving the ACARE goals of 50% reduction in CO2 and 80% reduction
in NOX and 50% reduction in noise, you could be forgiven for thinking
in fact that all the research and technology effort to improve
the environment was only happening in the aerospace sector.
Q85 Chairman: We are going to end
with sustainable aviation. There is a good positive message again,
so you can raise it again.
Dr Williams: I will try and work
myself up again for later on.
Chairman: Save yourself for then. We
have at least three world-leading industries. Formula 1 is one
of them, but on a slightly smaller scale; Aerospace and pharmaceuticals
are the other two. If we do not back them, I do not know what
we are going to do with our young men and women in the future,
but that is pre-judging our report.
Q86 Mr Wright: Turning to the question
of interaction between the universities and the industry itself,
which is directed at Airbus, in part of your evidence you said,
"Under the current funding arrangements, there is no mechanism
to create any kind of link between the NATS and the publicly-funded
research at UK universities." How can we remedy that situation?
Dr Williams: We mentioned briefly
the Aerospace Research Institute and we have cast around for different
mechanisms for establishing such a relationship. Whilst it is
probably fair to say that it still is at an early stage of formulation,
having a mechanism in place which could translate NATS into a
form which can then be used to guide funding decisions into university
bodies is an option that we currently see as attractive. The mechanisms
for that are still being explored, to be quite frank with you.
There is an industry discussion going on and there are currently
marginally differing views. Everybody understands the nature of
the problem but has a different view as to how that can be best
resolved, so I cannot present to you here today the blueprint
for how we should do it for the future. One of the drivers that
we would be seeking to ensure that such a body worked towards
is ensuring the relevance and impact of the application of that
research funding, perhaps better balancing the distribution of
research available for research funding between fundamental research
and applied research. We heard about the dead zone that was mentioned
earlier on. It is probably a classic in the applied research arena,
where you can hit that trough. Certainly it would need effort
to overcome those dead zones where they do occur, and part of
the motivation in the discussion in industry is not to seek to
ask for more money but to ask how the existing money can be better
applied and directed, so that in fact strategic needs, as expressed
by the industry and bought into by the Government—and this
through the discussions that have been held—can be clearly
understood by all decision makers who may be distributing research
funds and then applied in practice by those decision makers. That
is a rather roundabout way of answering your question. I do not
think I have a definitive blueprint for you today, but certainly
it is an area where there is very active discussion to seek better
means of distributing existing research funds.
Mr Keen: In the meantime, certainly
as far as BAE Systems is concerned, it is strategic partnerships
with key universities. We have five strategic partnerships, including
one with Cranfield on aeronautical engineering, and clearly those
strategic partnerships enable us as a company to direct research
on to those areas which we consider are of strategic significance
and which, broadly speaking, would be within the NAT Strategy.
It is not as though there is not a mechanism for doing it but
there is not a formal mechanism for translating the NATS into
directed funding to the universities.
Q87 Mr Wright: I am pleased that
the discussions are proceeding. How far down the line are we with
the discussions becoming a reality? With the French and the Germans
already having their institute, it is vitally important that we
participate in this. The danger is that we could be left behind
in decisions that could be taken on a European-wide basis because
we are outside of the organisation that deals with this particular
area. Is it going to become a reality?
Dr Williams: I certainly hope
it will. It is fair to say that discussions are slightly behind
where we would have anticipated they might have been at this time,
but the dilemma that you pose is one that I face practically on
a regular basis in my role at Airbus, where it is quite clear
that the 100% funding that DLR and ONERA obtain for certain of
their research work does place them in a very strong position
for undertaking future work and, therefore, does pose a risk to
certain of the activity currently undertaken in the UK. I would
not want to overstate that from a company basis, but strategically
for the country that is an issue to be addressed, and, perhaps
ironically, it is an issue that is recognised in Germany and France.
Mr Godden: In terms of the expectations
timeframe, we are talking weeks and months maximum to have proposals.
Whether that is something that happens before an election/after
an election I have to pass back to you to say, but in terms of
proposals we will have it in the very short term. It is being
looked at literally in a matter of weeks and months ahead.
Q88 Mr Wright: The information that
we gleaned from our visit to Bristol was that this appears to
be the cornerstone of the future of the industry—certainly
the long-term future and certainly in these difficult times. Mr
Keen, you mentioned your work with Cranfield. Is this not one
of the problems, that we are dealing with research institutions
all over the place and that we should co-ordinate these centres
into one centre, wherever it may be. Even at this stage there
is this competition for a National Composites Centre between different
areas. Perhaps we should look at the whole aspect of the aeronautical
industry and have one centre of excellence rather than do it piecemeal
and in probably three, four, five, six, eight, ten years down
the line lose out to the French and Germans because they are ahead
of the game.
Dr Williams: Perhaps I could declare
an interest, Chairman, because I am Deputy Chair of Council at
Cranfield University, so my comments may be somewhat biased, but
it is ironic in the 40th year of that university gaining its charter,
as it was originally set up as a specialist aerospace institute,
that the Higher Education Funding Council for England has removed
its special institute status and removed the body of funding as
a consequence of that. There are some ironic contradictions in
the way that policy is playing out at the moment.
Q89 Chairman: I have heard concerns
in the way HEFCE is not sponsoring centres of research excellence.
It is spreading the pot around perhaps a bit too thinly sometimes.
Dr Williams: My understanding
of the circumstances at the moment—and they are not complete—is
that the special institution status applied as a designation to
things like dance schools and music schools, and Cranfield as
a technological institution got caught up in the process or rationalisation
almost by happenstance, but, nevertheless, it does have an impact
on the funding regime.
Mr Godden: There is even more
reason in the UK for having this because we do have a very healthy
regional competition for things and we also have a diversity of
companies which are active in the UK, both UK-based and headquartered
and international companies around the UK. That in itself creates
fragmentation. Therefore, there is a role that government must
play in encouraging industry—it is not just industry's role—because
of that diversity. A nation must encourage that attitude of being
co-ordinated because natural default is not to be co-ordinated
because of the nature of our regions and the nature of our international
role in this industry.
Dr Williams: One further point
to add in terms of the strategic significance of that co-ordination
is around infrastructure. Rolls-Royce, in particular, were very
pleased to secure the noise facilities that are necessary for
the development of their engine. Whilst that is a prime example,
perhaps, and an obvious example today, there are others which
would benefit from co-ordination through such a central Aerospace
Research Institute. There are significant facilities. Large wind
tunnels may be an example and icing wind tunnels may be another
recent example. The UK was fortunate to have one that was needed
because of a particular investigation. They happened to be based
in Luton. The only other one available is in Canada. Icing as
a phenomenon on aircraft is well-known. It is something that needs
to be understood to ensure that the appropriate design of the
vehicle and yet, strangely, there is one very old and very small
icing wind tunnel left over in Luton—not wishing to be disparaging
about it—and no real consideration as to whether there are
significant facilities of that type which are necessary to underpin
and secure the engineering basis of our industry. It would be
interesting to obtain a view through a vehicle such as the Aerospace
Research Institute as to what were deemed strategically significant
infrastructural facilities and how should they be maintained.
Q90 Lembit Öpik: I was looking
at your biography, Dr Williams. You have spent the majority of
your aviation career in or very close to research and development.
Dr Williams: I have dotted in
and out of it.
Q91 Lembit Öpik: Nevertheless,
you are very qualified to answer the core question. If you were
in charge of the budget for a day, how would you construct this
single research facility? Would it be geographically in one place,
like Bristol, or would it be multi-located with consideration
for the aerospace industry?
Dr Williams: First of all, if
I was in charge for a day I would spend it quickly. Separate to
that point, it is a misconception to think it will be a single
physical location, simply because some of these elements of infrastructure
are physically distributed around the country. What is more important
is to secure knowledge of where they are, what they are, how they
are maintained and how they are exploited, and then, in parallel
with that, focus the available research funding into probably
fewer institutions in a more focused way. It will be unpopular
I am sure. There may be even an elitist view on it which says
"You back all winners" as was mentioned earlier on.
If there is precious little research funding available, which
clearly in the economic circumstances there would be, if you look
at the majority of the primes in the UK you will find they go
to probably five, maybe six, universities for 80% of their business.
That does beg the question, therefore: How much of the research
funding is going to—and this is going to sound disparaging,
but it is not meant in that way—the tail, the distribution,
and could that tail funding be more appropriately applied to get
a better result for the companies and the country?
Q92 Lembit Öpik: People are
out there, you are saying. It is a matter of focus and financial
strategy.
Dr Williams: I believe it is,
yes. If you looked at our preferred suppliers from universities,
I would be very surprised if it was very different from BAE Systems.
I would be very surprised if it was very different from Rolls-Royce.
Mr Mans: It is important to look
at it from the customers' perspective (that is, the companies
across Europe that are going to use this) to see the best way
of doing it. It is a co-ordinating role, so that what we have
in the UK is matched up to what people want—as happens in
France and Germany, as has already been mentioned. It is much
easier there: you simply go to DLR or ONERA and that is it. I
think that is what is needed in the UK. We may be able to get
the benefit of both, a degree of competition in terms of individual
agreements between companies and universities but at the same
time to have an overarching, co-ordinating institute.
Q93 Chairman: The National Composites
Centre competition that is going on at present Mr Wright referred
to in his questions. My perception—and it could be wrong—is
that the Government seems to have stumbled into this competition
by accident as a result of the money in the Strategic Investment
Fund. It seems to be of huge strategic significance to the whole
aerospace sector. Composites is the big game in town, is it not,
for the UK? Do you share my perception of the importance of this
proposal? If so, is it being developed appropriately or is it
a sideshow?
Dr Williams: Is it significant,
yes, quite clearly. I have to say I am not clear as to the background
of how it has evolved quite how it has.
Q94 Chairman: When we were in Bristol
last week, no-one was clear. We are getting close to it, but we
are not quite sure.
Dr Williams: It seems to me somewhat
perverse that there has been a strategic investment into, for
example, Manchester University for a composite certification and
test centre, which is linked to Wichita University, which retains
NASA datasets on composites. Surely there is an opportunity to
use that capability and that expertise in parallel with or in
conjunction with the proposal from Bristol. I am not fully familiar
with the proposals that are on the table, but it somewhat surprises
me that it is an either/or choice when in fact we are talking
about a fundamental change in material set which changes every
element of the aerospace product. To assume that we go through
a single centre that is magically the knowledge source for everything
to be understood about that material set processing leaves me
somewhat surprised—as you can tell from my open thinking,
shall I say.
Mr Godden: Unless I am hidden
from something that I do not know from certain of our members,
I think the industry is surprised. I would echo the fact that
I do not think industry has had a clear picture on this. It is
absolutely essential and I am not sure that we have a clear view
about what is really happening.
Q95 Chairman: That was certainly
the view we picked up, talking to a wide range of people involved
in the sector last week.
Mr Godden: On behalf of the membership,
unless some of my members have been extremely quiet about this
subject, I think I can echo that.
Q96 Chairman: The impression we formed
is that those who are bidding for it do not fully understand what
they are being invited to bid for. It is that level of confusion.
Mr Godden: The process.
Q97 Chairman: Yes, the process is
completely skewed.
Mr Godden: They do not understand
where we have got to and how we have got to here and what happens
next.
Q98 Chairman: For something of such
important to the sector, it does seem a rather strange way to
proceed. Thank you. Mr Mans, you talked about DARPA.
Mr Mans: I mentioned it.
Q99 Chairman: We visited DARPA 18
months ago. We were hugely impressed. We cannot do DARPA here
because the British system would never let you do it. Can the
Technology Strategy Board plug those gaps? Is that the nearest
thing we can get to DARPA? Is it good enough in the British context?
I understand there are constraints we work under here in terms
of accountability and so on.
Mr Mans: I would think that we
can make moves in that direction. I genuinely believe that the
technology should not be fragmented; it should be used across
the board. As I say spin-in/spin-out in terms of commercial and
defence technology. One area where it would work a lot better
is what Bob said about unmanned aircraft. They do not just have
military uses: in the future they are being used in the civil
sector as well. That seems to have rather got lost in the discussions
about funding, particularly the Australian programme.
Mr Keen: To be fair to the MoD,
the science community in the MoD does see the value of more mission-led
funding and it is trying to put in place certain mechanisms. We
have mentioned one in our evidence called Capability Visions.
It is not a DARPA analogue but it is intended to do the same sort
of thing in terms of driving capabilities through from technology
into the frontline.
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