Defence Equipment 2010 - Defence Committee Contents

Examination of Witnesses (Question Numbers 280-299)



  Q280  Chairman: Mr Godden, everyone is looking at you.

  Mr King: I will answer if you want.

  Mr Godden: No. There is a shortage, in general terms, of skill-base in programme management, systems engineering and equivalent, and you can see that across many industries in the West actually—it is not just a UK problem. Overall there is a shortage of high skill in that area, but the skill level within DE&S and equivalent is lower than you would expect and is lower than necessary. There are two other factors as well, which is authority levels to make decisions that go alongside the skill base and it is the combination of those two factors—the authority levels and the skill base being missing—that causes a lot of issues around how to make decisions and the time taken to make decisions with the lack of skill. So it has an effect on all sorts of things—time, the quality of the decision itself and the quality of the management of the whole process—and we do believe there is a shortage that needs to be dealt with.

  Q281  Mr Crausby: Is that a real problem continuity-wise? How long do people stay with the MoD? Do they move on into industry, in the sense that industry gives better rewards than the MoD?

  Dr Wilson: Can I interject there. It is not just an MoD versus defence industry issue. In fact, as we progress into the reinvigoration of nuclear energy in this country, we are going to find a whole gamut of technologists being required across a much wider industrial landscape than we currently have in defence, and they are the same skills—systems engineering, complex contracting—all of the usual things that we put a premium on—programme management. So there is a problem in defence just now. We can always do with more programme managers and more systems engineers. As other industries come up in importance, that is going to be a greater problem, and it speaks to us having to have a skills strategy that feeds all of those industries over the next 10 to 20 years.

  Q282  Mr Crausby: So what do we need to do?

  Dr Wilson: Have a skills strategy that reflects the importance of programme management and systems engineering.

  Chairman: Can you save it up, Mr King, just for a moment.

  Q283  Mr Borrow: I just want to be clear in my own mind whether this is a money issue or whether this is a systems issue within the MoD. Is this something where, basically, the taxpayer is going to have to pay a lot more cash to get the right sort of people to do the job properly and do that in a climate when both major parties are talking about reducing the pay of top public servants? Are we just going to have to bite the bullet and pay a lot more to get the right people, or does something have to happen within the MoD to make it more comfortable for these people to actually be there and it is not necessarily a cash issue at all?

  Mr King: It is a nice feed into what I was going to say. There is no doubt that there is a salary structural issue; that if you were to look at what industry is paying these people—because they are a scarce resource across those—then there is a differential, and so, to take your point, you probably do have to bite the bullet if you regard this as a key resource going forward. You then have to put in training schemes, you need a skills strategy and there has to be a commitment to meet these training schemes, because there is not a surfeit of these types of people with these skill sets. If you look into my company, in particular, it is a very recognised function—programme management, project management, whatever you want to call it—and we invest a lot of money in both graduates and training to keep their skills up, so it is a long-term commitment. Then you have to put a career structure around these people. They have got to want to stay in that sector, because these are long-term programmes and you want continuity; so they need to know how they can be promoted within the Civil Service, or the military, or wherever they are sat. It is a really long-term commitment; and I know that DE&S are looking at it, because I have personally spent time discussing the structure of how we have built up our function, and we have had joint activities going on in that area, but there will be a differential in financial rewards.

  Q284  Mr Hancock: The problem is, if the MoD did that, you would end up poaching them, would you not? You would stop training them and you would poach them. It is not to your advantage, is it, really, because your edge at the moment is there is not the skill and the project management within the MoD, which allows you to take them to the cleaners time after time after time?

  Mr King: That is absolutely wrong.

  Q285  Mr Hancock: Are you sure?

  Mr King: Absolutely and fundamentally wrong.

  Q286  Mr Hancock: So why have you spent so much money engaged in buying people out of the Services when it suited you, when you needed their skills?

  Mr King: Because we need those skills, because, as we have moved along providing integrated support availability contracts, we need to marry up our design capability with the operational capability to provide real cutting-edge capabilities. If you look at the benefits of the Tornado attack programme, it has taken £1.3, £1.4 billion of savings to the taxpayer.

  Q287  Mr Hancock: Over and above all the other costs that it had already cost us. Over and above the original figures.

  Mr King: No.

  Q288  Mr Hancock: Yes, it has cost us a lot more money than we originally—

  Mr King: Not true. On Tornado that is not true. We are very professional about the way that we do these things. We do not go in and just recruit people from the Services. We enter into debate as to where would be the right placement of those skills for the UK.

  Q289  Chairman: Can I come back to something that you said, Dr Wilson, that it is going to get more difficult to recruit these people. The Bernard Gray Review suggests that the problems in the acquisition field in the Ministry of Defence are bad but accelerating. So things are going to get more difficult in that respect, and putting them right is also going to get more difficult, if what you suggest about the shortage of skills in the future is right. Would you say that was an accurate summary of where we are?

  Dr Wilson: Yes, I think that is a fair comment, given what Bernard Gray has said and what I have said today, in terms of the wider industrial landscape for skills.

  Q290  Chairman: You accept that things are bad and getting worse—that comment in the Bernard Gray Review—do you?

  Dr Wilson: I think that is hard for me to judge, frankly.

  Sir Brian Burridge: There is one area where things could change. Acquisition reform over the years has had to see the MoD change its approach from a strictly writing contracts type of approach (and they had many people who were very talented at that) to a commercial approach. When you think of the way in which acquisition of both capital equipment and services has changed through PFIs, availability-based contracts, then there is a greater need for people with commercial nous, and that is an area that they are short of in the DE&S and that is potentially an area where they can actually expand, because the nature of the economy will release a number of these people on to the market. So the challenge for the MoD is to get the commercial expertise; the challenge for industry is to understand the user better, particularly, again, in these areas where acquisition has changed, and that speaks to Ian's point about needing people who really do understand what the users do with their equipment.

  Q291  Chairman: That is helpful.

  Mr Godden: I do not want to prolong the debate, but, just to reinforce it. I think this is one of the single biggest important features which possibly has not got enough follow-through attention or enough implementation aspects to it to make this real. As I survey the four sectors I am involved in—civil aviation, defence, civil aerospace and security—there is no doubt what Dr Wilson said, that the demands on that type of skill are increasing over time, and, with the civil nuclear coming into that equation quite dramatically, there is a real risk of a further skill drain out of the traditional defence sector, particularly because, as we look at careers—and I listen to people every day talking about their careers—they are beginning to fear that the security space and civil nuclear are much better future careers for them because it has got growth, it has got expectations of more money, it has got more research, etc, and there is therefore a belief that defence has got this risk of being stuck in a box and not going anywhere. So I think we have also got that challenge, which we are dealing with. To me the programmes associated with this are critical. You may or may not know that the DoD have just hired, or are in the process of hiring, 30,000 people into procurement, as we speak, because they feel they have deskilled too far. So they themselves are trying to reach in and deal with it.

  Q292  Chairman: When you said "the DoD", you are talking about the United States.

  Mr Godden: The United States DoD, I am sorry, are hiring 30,000 people in and they are paying above market rate.

  Q293  Chairman: They are paying above market rate?

  Mr Godden: Yes.

  Q294  Chairman: Mr King says that the Ministry of Defence pays below market rate. Mr King, are you able to quantify the differential that you have referred to?

  Mr King: Not here and now. I suspect it would be fairly easy to do so, but I have not got that data to hand.

  Q295  Mr Jenkins: I would love to ask you about the rationale and the reason why I need, in the Ministry of Defence, a very good commercial manager to deal with a partner, but the question is more basic than that. As you may be aware—and some people will not face up to it—only a percentage of our people have the ability to acquire and develop these skills. So what are you doing as companies? Do any of you actually finance a chair at a British university to develop these types of skills and how many do you pull in to stop them drifting off into useless occupations like lawyers or accountants?

  Mr King: We do a lot. You are quite right. We do have relationships with a lot of universities in terms of sponsoring the types of skills needed. At any given time we have got about 1,000 in apprentice schemes, we have got 300 in graduate schemes and we keep on turning up that wick to make sure. We do lose a percentage of them, but it is recognised that if they can stay within the sector, or stay within the UK industrial sectors, then that is the right thing to do. You cannot turn that wick off. And that is why I come back to the earlier comments about the need for a proper SDR which then determines the Defence Industrial Strategy and that allows us to invest, because it takes a long time to train these people. We are a very specialist sector. They just do not appear. We have gone past the belief that you can just go to other engineering sectors and pick up people who are directly attuned for the defence sector. It does not work that way. You then have to spend a lot of investment in it.

  Q296  Mr Jenkins: Do you all do the same?

  Mr Godden: Yes. On behalf of the industry we are trying. For example, at Farnborough we are creating a Futures Day, the Friday, all around this subject about attracting youth into the sector and attracting the science philosophy amongst youth. Our long-term aim is to build that up into something much more significant than it is. Last year I think we had 700 or 800. These need to be thousands. We need to get thousands in here. This will not solve the problem in the next few years. It will not solve it in the context of what we have just talked about in terms of some of the skill bases in the MoD, but it will start feeding the hopper for five, 10 years down the road.

  Q297  Chairman: Still on the analysis contained in the Bernard Gray report, would you say—from the sound of things you probably would—that this was the most important issue contained within the Bernard Gray Review: the absence of skills within the Ministry of Defence?

  Sir Brian Burridge: There are two fundamental issues. One we touched on at the outset, the fact that the programme and the resources are out of balance and that generates particular behaviours, but, certainly, in parallel with that is the depth of skill in programme management and in commercial management.

  Q298  Mr Hancock: Is it possible to bring those two things closer together?

  Sir Brian Burridge: One assumes that it would be possible. One would have to defer to the Treasury to know what is in the art of the possible, but, yes, in theory, as a standard piece of business practice, that is what you would seek to converge.

  Q299  Mr Hancock: He did not come up with any real suggestions of how that could be achieved, though, did he?

  Mr Godden: That was my comment about implementation.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2010
Prepared 4 March 2010