DE 10

 

 

Letter from Ian Godden, Chairman A|D|S to the Rt. Hon James Arbuthnot, Chairman of Defence Select Committee, re: follow up issues raised concerning R&D and MoD salaries compared with those of industry.

 

 

Dear Chairman

 

In giving evidence to the House of Commons Defence Select Committee on 8 December 2009, I was asked about the proportion of research and development on defence equipment that is funded by industry while Ian King referred to the difference between MoD salaries and those in industry. You requested that our panel follow up on these two questions.

 

Please find below information below on R&D investment by industry as well as data on salaries in BAE Systems and how these compare with MoD.

 

Research & Development

Annual survey data from A|D|S in 2008 showed that the industry in the UK invested £1.4bn in defence R&D. This is in fact a conservative estimate of the amount the industry contributes in this respect for two reasons. Firstly, the data was collected as part of the then SBAC aerospace survey, so it covers only defence aerospace. Secondly, it does not include the entirety of the defence industry, but a sample from the A|D|S membership. Following SBAC's merger with the DMA, we are considering how to include further aspects of the defence industry as part of the survey.

 

 

BAE Systems

Below is BAE Systems' benchmark data for the following functions:

 

· Project/Programme Management

· Commercial

· Procurement

· Engineering (this includes all Engineering roles as Systems Engineering is not split out specifically)

 

These relate to the company's new grading structure - known as Watson Wyatt or WW grades - which is progressively being introduced. It has not yet been introduced in the more junior executive grades, which are referred to as Exec grades 3 and 4. An explanation is below:

 

· WW17 - Management Committee level of business

· WW16 - Leader

· WW15 - Leader

· Exec3 - Manager

· Exec4 - Senior Professional

 

It is difficult to be precise about analogue MoD grades, but we would estimate that WW17 probably equates to the first rung in the Senior Civil Service. The lower grades knock on in consequence, but there is no direct read across to lower civil service grades.

 

Against that background, the data below gives the approximate salary ranges (in £1,000s) for roles within BAE Systems.

 

 

 

 

 

 

 

 

 

Project Management data
Grade	Lower Quartile	Median	Upper Quartile
WW17	105.5	114.5	121
WW16	82.5	90	103.5
WW15	66	72.5	82.5
Exec3	49.5	54.5	60
Exec4	40.5	43	47
Procurement data
Grade	Lower Quartile	Median	Upper Quartile
WW16	75	89	113
WW15	68	71	80
Exec3	48.5	53.5	59.5
Exec4	39.5	41.5	45
Commercial data
Grade	Lower Quartile	Median	Upper Quartile
WW17	95	103.5	120
WW16	81	86.5	91.5
WW15	63	72.5	80
Exec3	47	50.5	55.5
Exec4	39	41.5	45
Engineering
Grade	Lower Quartile	Median	Upper Quartile
WW17	100.5	111	122
WW16	79	82.5	91
WW15	67	70.5	80.5
Exec3	53	57	62
Exec4	44	47.5	51.5

 

 

Ian Godden

Chairman, A|D|S

 

19 January 2010