Examination of Witnesses (Question Numbers
100-119)
GENERAL SIR
KEVIN O'DONOGHUE,
DR ANDREW
TYLER AND
MR GUY
LESTER
1 DECEMBER 2009
Q100 Chairman: Was not the credibility
lost given that you had only just let that contract a few months
before?
Dr Tyler: We have still got a
perfectly credible and deliverable carrier programme on our hands
now. Whether or not we made the decision a few months earlier
or then, we still would have re-profiled the programme in the
way that we did, and we still would have ended up with it costing
us more over the duration of the project overall. Simply the increased
use of overheads and the price of inflation over that time, there
is some fairly basic—
Q101 Mr Jenkin: What, by extending
the programme for two years?
Dr Tyler: Yes, that is right,
exactly that. You understand the reasons that you are going to
be using the shipyards for two years longer, you have got all
the inflationary effects that come with it.
Q102 Chairman: We understand it but
do you not accept that the entire process looked a little ridiculous?
General Sir Kevin O'Donoghue:
If I can just go back to the Gray report, I agree with his basic
premise that we need a balanced programme.
Chairman: Let us get back to a balanced
programme in terms of research.
Q103 Mr Jenkin: Before we just leave
this topic, it would be extremely helpful and is it unreasonable
for this Committee to ask for a package of comprehensive numbers
on all this with your assumptions so that we, and indeed the public,
can see what is going on in your programmes; because at the moment
we are, as the Chairman says, inflicting future pain on the defence
budget for lack of money in the present budget? That seems to
be what is happening and I think we are entitled to know why this
is happening and how it can be stopped?
General Sir Kevin O'Donoghue:
I do not think it is quite as simple as lack of money in the present
budget; it is a mismatch between requirement and budget. We can
either reduce what we buy—
Q104 Mr Jenkin: This is a Sir Humphrey
answer!
General Sir Kevin O'Donoghue:
No, it is a balancing act; that is what the whole planning round
is about. I said some time ago, we could spend any amount of money;
we have to spend it on the right priorities.
Q105 Mr Jenkin: £65 million
per year over 10 years is a hell of a lot of cuts in the Territorial
Army, if it was all inflicted on the Territorial Army. It has
all got to come from somewhere, has it not?
General Sir Kevin O'Donoghue:
Yes, essentially it is the equipment programme we are talking
about.
Q106 Mr Jenkin: On Research and Development,
in the Government's response to our last Report the Government
said, " ... research is essential in delivering battle-winning
military capability now and in the future"; but the Defence
Industries Council report stated that the Defence Industrial Strategy
demonstrated "that those nations which invested most in R&T
had an advantage in military capability over their rivals ...
" but went on to say that " ... UK R&T funding had
fallen as a proportion of GDP from 2.3% ... to 1.9%". For
example, cutting R&T development on C4ISTAR is this not rather
a serious way of making savings, in that it is very detrimental
to what we need in the future?
General Sir Kevin O'Donoghue:
You are picking up, I think, a newspaper article. There is no
cut on SIT spending, on R&T spending, on C4ISTAR for current
operations.
Q107 Mr Jenkin: I appreciate for
current operations but we talking about future capability here.
General Sir Kevin O'Donoghue:
I think what the R&D Board has done, and I sit on the R&D
Board, is prioritise the R&T spending into 12 key areas, which
I could go through if you wish, and just make sure we are spending
our R&T money in the areas that are going to give us most
effect for our money. I think we are now spending our money much
more wisely; that is not to say that there have not been reductions
in the total R&T money—there have. I think that is a
pity but, there we are, we have to balance the budget.
Q108 Mr Jenkin: Afghanistan is the
main effort?
General Sir Kevin O'Donoghue:
Afghanistan is the main effort and that is what we are spending
money on and I think we are spending it more wisely.
Q109 Mr Jenkin: That means we are
effectively funding current operations out of future capability?
General Sir Kevin O'Donoghue:
No. Take armour for example—and without getting into any
classified detail—the only reason that we have been so effective
with our armour R&T programme, and what has spun out from
it for our vehicles, is because we had a 15-year programme of
developing armour, and we have got some of the brightest brains
around dealing with it. You cannot suddenly spend money on R&T
for current ops. You have to have a programme; you have to have
those competencies and that knowledge; and that is what we have
tried to do. Rebalance where we spend our money into 12 key areas
and then concentrate on them, and then when you need—
Q110 Mr Jenkin: I am sure your decision
is rational within the framework, but how much can we carry on
cutting overall R&T?
General Sir Kevin O'Donoghue:
I hope we do not cut any more in future years.
Q111 Mr Crausby: Some questions on
FRES. Quentin Davies in a speech on the 22 October said about
FRES that, "The project was an example of pursuing perfect
specification, perfect planning and perfect integration. It turned
out to be a perfect disaster". He went on to say, "I
will not dwell on a sad story. I have now stopped the FRES programme".
So where are we on FRES? Is there no future in our Rapid Effect
System?
General Sir Kevin O'Donoghue:
What he stopped was the FRES Utility Vehicle programme; and he
stopped it because the priority changed to FRES Scout. The competition
is ongoing. There is a selection process going on at the moment.
I would be very disappointed if we do not get FRES Scout out on
contract February/March next year.
Q112 Mr Jenkin: What is the point
of putting the word "FRES" in front of Scout?
General Sir Kevin O'Donoghue:
It is the Future Rapid Effect System, the Scout bit of it as opposed
to the indirect fire bit or the engineer vehicle, but it is a
family of vehicles—a Future Rapid Effect System.
Q113 Mr Crausby: He seemed to express
complete no confidence in what has been a 10-year programme. We
have been asking questions for some time and the response we have
got is that, "It's all on track. It's all going to continue",
but it looks to be in absolute chaos to me.
General Sir Kevin O'Donoghue:
As I say, it is really good news. The FRES Scout programme will
be on contract—and that is the recce vehicle—in January,
February, possibly March, spring next year, which is what I think
Mr Davies said the last time he spoke about it.
Q114 Mr Crausby: What about FRES
UV?
General Sir Kevin O'Donoghue:
We need to come back to that. The priority at the moment was the
recce vehicle. We will need to come back to FRES UV because while
Mastiff, Ridgback and all the UORs we have been buying for Afghanistan
are good—extremely good for Afghanistan—they are not
armoured fighting vehicles; they are not good for contingent operations
anywhere else; so we will need to come back to it.
Q115 Mr Crausby: What about FRES
SV?
General Sir Kevin O'Donoghue:
That is the Scout vehicle—SV. Scout is one of the specialist
vehicles in the SV class.
Q116 Mr Crausby: So it is just one
of the specialist vehicles. How many specialist vehicles will—
Dr Tyler: With the SV what we
are doing is we are buying essentially two things. We are buying
what we call the common based platform which, as its name suggests,
is the basic tracked platform which will then be used for a lot
of different other types of specialist vehicle in the future.
The first of the specialist types of vehicle that we are procuring
is the Scout vehicle which is the one with the turret and the
gun on it—that was the Army's top priority—and the
sensors.
General Sir Kevin O'Donoghue:
Your comment about it not being a very satisfactory programme
was valid. I do not believe it is valid any more and, as I say,
will be on contract with the most important variant for the Army
at the beginning of next year, in a matter of months.
Q117 Mr Crausby: Prior to those comments
he said, "Only very sparingly should you invest in new concepts".
I got the impression that what he was really talking about was
buying off the shelf. This business is just far too risky and
far too expensive. To what extent are we going to buy off the
shelf?
General Sir Kevin O'Donoghue:
That is what we believe. The two contenders for the current competition
are vehicles that are in existence. We are not designing them
from nothing. There are vehicles out there which will meet the
requirement. What we are looking at is to see which best meets
requirement.
Q118 Mr Crausby: Where does that
leave the UK manufacturing base? To what extent will they be involved
in overhaul and repairing?
General Sir Kevin O'Donoghue:
Overhaul and repair of course will be done here. Actually much
more importantly in my view is the upgrade work that will go on
throughout the life of these vehicles. That set of engineering
competences which allow you to upgrade complex weapons systems
and integrate new systems onto them that is what we must retain
in this country.
Q119 Mr Crausby: Do we have any idea
about timetable?
General Sir Kevin O'Donoghue:
Yes, it will be on contract in January/February—
Dr Tyler: —in early next
year. We have received all the bids in now for two major projects:
one being the FRES Scout project and the other being the Capability
Sustainment Programme for the Warrior vehicle. In both cases we
have two bidders; those bids are under assessment at the moment,
so obviously there are commercial in confidence issues here. I
can assure you that in both cases, the Warrior bidding and also
in the case of the SV bidding, all the bids have got a large UK
content associated with them.
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