Examination of Witnesses (Question Numbers
380-392)
SIR BRIAN
BURRIDGE, MR
IAN GODDEN,
MR IAN
KING AND
DR SANDY
WILSON
8 DECEMBER 2009
Q380 Chairman: The sentence that
Mike Hancock read out earlier was: "No evidence yet of a
magic formula for acquisition reform that has been shown to deliver
its intended benefit". He found that startling. I know it
is the run-up to Christmas, but I am afraid I do not find that
startling; only time will tell.
Mr King: If you get reviews done
of businesses generally they come up with there is no magic formula
either.
Chairman: I am delighted that you do
believe in magic formulas.
Mr Hancock: I was hoping that this guy
would have come up with something.
Chairman: Maybe he will and we can find
out next week. I want to get on to research and development.
Mr Hamilton: We will find out through
David Cameron!
Q381 Chairman: Research and development
is a matter of extreme importance. What proportion of research
and development on defence equipment is funded by industry?
Mr Godden: I should have that,
but do not have that number to quote here. I can bring it back
later.[1]
Q382 Chairman: Could you please bring
that back. What is your reaction to the planned future expenditure
on research and development in the UK? What is the reaction of
industry to this?
Sir Brian Burridge: Two points.
One is that it is insufficient because this is, again, a strategic
resource, an indigenous capability, which allows you to manage
risk, allows you to develop capabilities. It cannot be turned
on and off like a tap. Secondly, because it cannot be turned on
and off like a tap it needs to be managed strategically in that
there needs to be constant cognisance of where the research programme
is going as IPTs, delivery teams, gradually converge on the solution
to their requirement. We have seen occasions where the two for
plausibly good reasons have just not linked up, and those good
reasons are often about time in the sense of getting your programme
agreed before the shutters come down even further.
Mr King: I would just come back
to one of the points I raised earlier. In the absence of a Strategic
Defence Review, cutting back on R&D at this stage does seem
to be putting the cart before the horse. You really need to have
a plan. There is a long cycle for this activity. We are not talking
about huge amounts of money that the MoD spends on R&D and
it is precipitous to do it before we have got a clear Strategic
Defence Review.
Q383 Chairman: Mr Godden, I want
you to come back on this. I am disappointed in what you have said
so far because I have heard you speak eloquently about research
and development and I want you to do it again, please.
Mr Godden: I am sorry I do not
have the numbers but I will get them.
Q384 Chairman: You do not have to
have the numbers.
Mr Godden: For me, this is three
things. One, it is an example of a knee-jerk reaction to pressure.
Q385 Chairman: What is an example?
Mr Godden: The cutting of the
research budget, which is a 24% cut over three years.
Q386 Chairman: A 24% cut over three
years. Which three years?
Mr Godden: That is 2007-10. The
latest announcement is from £471 million to £439 million.
Q387 Chairman: That sounds like figures.
That is very helpful, thank you. Why is this a mistake?
Mr Godden: There are two reasons.
One is it is one of the few things that has been analytically
proven that spending on research and technology six to seven years
from now means a direct link to the quality and nature of our
defence products and equipment. We are storing ourselves up a
problem. Who knows who and what we will be fighting in seven years'
time. This is a signal that we are not interested in that. That
is number one. Sorry, you have wound me up so I will respond to
you.
Q388 Chairman: That is what I want.
Mr Godden: Two, it is totally
contrary to the beliefs of most political parties that we are
seeking to rebalance the economy and create a high value, high
technology industrial base out of the pieces that remain in this
country. For me, given that defence, and I will look more widely
than defence, is 15% of the total national R&D spending, therefore
that is a signal that somehow or other—I do not understand
this—one part of us says we are trying to create a high
technology economy and the other part is cutting one of the largest
R&D activities in the country. Personally, being on the board
of two companies where the impact of research and development
being cut not only affects defence but this company deals with
medical equipment and some of the industrial and scientific equipment,
I have already noticed that impact. My last point is that this
is seen internationally as a signal. There are many signals that
the country gives about a commitment to industrial base. One is,
are the politicians committed to the international selling of
this sector or these activities; two, how much research and development
does the nation itself put into this sector; and, three, what
is the mechanism by which the industrial base is attracted in.
In the criteria as I look at it, and perhaps speaking out of school
for some of my members, they say, "With the UK as a base
with this uncertainty, with a cut in R&D and over the next
year or two with the disruption of a general election, this is
not a very good set of signals about whether to invest here or
in the UK".
Mr Hancock: Does it not go further than
that? Is it not also about how the areas of research and development
are geared, who is making the decision where the reduced resource
is going to be spent? Who is telling the tale to make the decision
a profitable one? One of the things I found mind-boggling over
Drayson's first attempt was that he missed that point. Even though
he talked the talk, the report did not produce the sort of commitment
to research and development that I felt we needed as a country.
This backs up what you said. Is it going to change?
Q389 Chairman: I think that is a
question that you should be asking us rather than us asking you.
Mr Godden: I have addressed it
with three Secretaries of State for Defence in a row and I have
addressed it, as the Chairman will know, with the other political
parties in opposition and have raised the subject quite openly.
So far there is no action.
Mr Hancock: No, it is pathetic.
Chairman: I did not actually. Perhaps
I should have done, but I am delighted you have.
Q390 Mr Havard: Are you also saying
it says something about what sort of future customer we are going
to be, or what sovereignty or dependency we might have in relation
to what we might wish to do and if we decide strategically we
want to do X we may not have the capability to do X and will be
dependent on someone else to deliver it in a way that we otherwise
would not be able to?
Mr King: Both the issues that
you raise in terms of what sort of customer and what capabilities
the UK will have in terms of sovereign capability, that is absolutely
right.
Q391 Mr Hancock: You must be looking
around now, must you not?
Mr King: Yes, absolutely.
Chairman: I have one final question which
is nothing really to do with the Equipment Report, it is more
to do with the Report that we are doing into the MoD Annual Accounts.
We have heard that we keep losing Bowman radios.
Mr Havard: Misplacing them.
Q392 Chairman: Dr Wilson, you have
been making these with loving care. Is there any suggestion that
you might have at a very affordable price, no doubt, for keeping
track of these things?
Dr Wilson: Yes. There is a raft
of work already ongoing to look after assets in the field. I do
not think there is a simple answer to this. There does need to
be greater integration of the existing systems that deal with
configuration management of the platforms in theatre, linking
that to some of the ordering mechanisms that MoD uses to call
up spares when they find they need them. One of the key things
that industry can do to help with that is put more people in theatre
with the right skill base to get round some of these problems.
We have been delighted to be able to put only a couple of people
in to do repair and overhaul activity in the last month or so,
but I would hope to see that would migrate to a technical management
role and also to looking after some of the assets for them in
there. Fundamentally, I think there needs to be a greater level
of control applied. We have got mechanisms to help do that. When
JAMES comes along—Joint Asset Management and Engineering
System—so long as it really does have embedded in it a suitable
asset tracker and configuration management system, I think we
will see some improvement. The message I would have is accelerate
rather than delay in those programmes.
Chairman: Thank you, that is very helpful.
Gentlemen, many thanks indeed for this morning's evidence session.
It has been very helpful, very interesting, and I hope that we
can continue this on other occasions because it is very important.
Thank you.
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