Examination of Witnesses (Question Numbers
200-219)
GENERAL SIR
KEVIN O'DONOGHUE,
DR ANDREW
TYLER AND
MR GUY
LESTER
1 DECEMBER 2009
Q200 Mr Jenkin: When we were talking
about your estimates of how much the programme has overheated,
should that not be part of the negotiation and agreement with
the Treasury? Your 50% risk factors, they should be in the programme,
signed off by the Treasury. The Treasury should be signing off
the risk as well as the number.
Dr Tyler: The Treasury's interests
are that we are living within our means. They agree the means
and we have to find a way to live within it. Of course, they are
very interested to see how we are going to do that and they spend
a lot of time looking at the detail of that, not just the generality
of that, but the planning process itself, fundamentally, in terms
of its general approach, is not flawed; it is very simple and
it is very similar to what we would do in industry. You start
off with a set of assumptions. Put simply, Mr Lester and his people
set a set of assumptions, they provide them to DE&S and say,
"Please cost everything"—new projects, support
for projects and so on—against those assumptions. That is
the stage one of the planning round. We have several screening
sessions but we end up with a big session where we agree that,
against all of those assumptions that we have been given, everything
is costed what we call tautly and realistically. Clearly, history
would show that sometimes our tautness and realism leaves a bit
to be desired, and that is where we have got a lot of room for
improvements, as the CDM has said. Inevitably, again for the reasons
we have talked about today, our eyes are bigger than our tummies,
and so when we come and look at the full costing of the whole
programme against the resources we have got available, we find
that we have not got the resources required to fund everything,
we then go into stage two, and what stage two is about is running
what we call options against that, which is essentially the iterative
exercise of balancing our books. This is something that Mr Lester's
staff will do. They will generate these options, which will be
things like, instead of buying 28 of those, how about if we bought
15 of them, what are the capability implications, what are the
industrial implications, what are the cost implications what are
the time implications, at a very, very low level of detail? This
is a huge exercise. How many options, Guy, will we typically raise
in a year?
Mr Lester: It might be several
hundred sometimes.
Dr Tyler: Several hundred, and
that is that iterative process of balancing our budget. Then the
third stage of it is where we would then be looking at things
that we need to add into the programme, new things that have come
along, enhancements, and we would be looking to balance those
with the options which are taking stuff out of the programme.
Q201 Linda Gilroy: The competition
for the delayed procurement of the MARS tankers has just finished,
but legislation bans the operation of non exempt single hulled
tankers from 2010 onwards. The MoD has got an exemption, but what
does that mean in terms of the sort of restrictions that the continued
use of the single hulled tankers will have to operate under?
General Sir Kevin O'Donoghue:
There are some geographic restrictions and some nations do not
allow single hulled tankers into their waters, but it is not restricting
naval operations.
Q202 Linda Gilroy: In terms of extent
and significance, can you give us some description?
General Sir Kevin O'Donoghue:
I do not think it is affecting operations at all. What we need
to be careful of is what do we do if something does go wrong,
and I do not just mean with our tankers. Our tankers are very
well maintained; I do not think ours are going to go wrong. What
happens if a single hulled tanker from some other nation gets
holed and internationally there is a block on? There are two things.
One is that that is why the competition is running, and we need
to get on with it, and, secondly, we have, as you would expect
of us, a fall-back plan as to what we might do if that were to
happen. Bear in mind we do have two wave-class double hulled tankers,
so they can operate, they can replenish at sea, and we would need
to hire in commercially some double hulled tankers.
Q203 Linda Gilroy: Indeed. There
is a review of the Royal Fleet Auxiliary going on at the moment.
Are the two things related: the procurement of the MARS tankers
and the RFA review?
General Sir Kevin O'Donoghue:
No, because the MARS tankers requirement is a requirement. How
they are crewed and how that requirement is delivered of people
is a different issue.
Q204 Linda Gilroy: Moving on to the
Type-45s, when will HMS Daring get the PAAMS capability?
Dr Tyler: HMS Daring has got PAAMS
capability today. The process of generating what we would call
full operating capability, trialled, verified and tested, is going
to take, from memory, a couple of years longer to generate. You
might have read reports recently about our final trials firing
which was not successful. It is too early for us to come up with
the diagnosis for that, but that has been a set back in terms
of the generation of the full capability, and we are working extremely
hard with the other two partner nations and the company to resolve
what the problems were with that final firing.
Q205 Linda Gilroy: Are there cost
increases associated with that?
Dr Tyler: Not with that specifically,
or if they are they are very minor. The cost of delivering us
a working PAAMS system falls with the company.
Q206 Linda Gilroy: On numbers, the
numbers have gone down from the original 12 envisaged to six.
Their primary role is air defence?
Dr Tyler: Yes.
Q207 Linda Gilroy: I am keen to understand
how that works as far as the capital vessels that they are designed
to protect. Why was it originally thought necessary to have 12,
and can you describe to me what the implications of having six
are?
General Sir Kevin O'Donoghue:
I pass it to the capability requirement man.
Mr Lester: I am trying to remember
why the requirement was originally 12. The successive reductions
we have had from 12 to eight and then eight to six reflected partly
priorities in the programme and partly an understanding of the
capabilities of the ship, especially when we fit them with the
Co-operative Engagement Capability, the improved networking compared
with what was originally envisaged, but the judgment is that with
a fleet of six we can protect a medium-scale operation, which
is two task groups, and that is what we need to do.
Q208 Linda Gilroy: That is based
on two task groups, so perhaps an aircraft carrier group and one
amphibious group.
Mr Lester: An amphibious one,
exactly.
Q209 Linda Gilroy: But not two amphibious
groups.
Mr Lester: No, our requirement
is to protect two task groups.
Q210 Linda Gilroy: Does that mean
that there is one or two needed to escort?
Mr Lester: Two per task group.
Q211 Linda Gilroy: Two would be required
to escort a task group?
Mr Lester: Yes.
Q212 Linda Gilroy: That would mean,
you would have two, that would be four in use, although I think
it has been said that five out of the six would be available for
tasking.
Dr Tyler: We are aiming to generate
availability of five from six.
Q213 Linda Gilroy: You are?
Dr Tyler: We are aiming to do
that.
Q214 Linda Gilroy: What is the contingency
arrangement? Hopefully it will never happen, but if HMS Nottingham
hit the rocks or Endurance flooded, you would have one spare.
Dr Tyler: Yes.
Q215 Linda Gilroy: What is the contingency
plan for that?
Dr Tyler: If we are managing to
generate five from six, then at any point in time we have got
one spare. Clearly, if we lost one, then that would leave us only
just enough to protect two task groups on that basis, but, frankly,
that goes for all of our defence capability. We have to size it
to a particular assumption set and, if you stress that assumption
far enough, then we end up with not enough equipment.
Q216 Linda Gilroy: The consequence
of reducing from 12 to six is that it is at the very highest end
of the risk that can be taken as far as the capability being available
in adverse circumstances?
Dr Tyler: I think it is a bit
too much to say it is at the farthest end of the risk. We have
taken a carefully calculated risk and believe that we can live
with that perfectly adequately.
Mr Lester: The other thing is
that these task groups, in practice, will be, in many cases, in
most cases, probably taking part in coalition operations anyway
with other people's navies, particularly the US Navy.
Dr Tyler: I think that is where
the Co-operative Engagement Capability comes to the fore as well.
In the time that Type-45 has taken to be developed and manufactured
the networking side of things has come on tremendously, and we
are able to get, if you like, more capability out of the same
assets by networking them than we would have done previously,
by sharing radar pictures and that sort of thing.
Q217 Linda Gilroy: That is happening,
for instance, in the Gulf of Somalia, and so on, at the moment,
the allied operations?
Dr Tyler: Whenever we are operating
in a coalition operation then, obviously, we are trying to network
(it goes back to our FRES discussion earlier) the assets that
we have got in the battle space together to the maximum extent
possible.
Q218 Chairman: Before we move off
this issue of 12 to six, there must have been a rationale for
having 12 in the programme originally. I wonder if you could please,
look it out in the Ministry of Defence and send it to us.
General Sir Kevin O'Donoghue:
Yes, of course.[6]
Q219 Linda Gilroy: The Type-45s have
been built fitted for, but not with, some capability, so they
can be upgraded as they go through life. Where will these upgrades
be done and how will they be procured? Will they be part of the
Surface Ship Support Alliance, will they be competition? How will
that work?
Dr Tyler: It very much depends
on the nature of the upgrade that we are talking about. It is
highly likely, in fact I think it is probably fair to say definite,
that upgrades would be primed within the Surface Ship Support
Alliance but, clearly, if it is something like, let us say, a
communications upgrade, that might very well involve one of the
key suppliers within the supply chain, if it is a propulsion system
upgrade it would involve Rolls Royce—it depends on the nature
of the upgrade as to how it would be contracted but the work would
be conducted through the Surface Ship Support Alliance.
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