UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 752-i

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

transport Committee

maritime and coastguard agency

Tuesday 8 February 2011

Vice-Admiral Sir Alan Massey KCB CBE, Philip Naylor and Sue Ketteridge

Evidence heard in Public Questions 1 - 192

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the transport Committee

on Tuesday 8 February 2011

Members present:

Mrs Louise Ellman (Chair)

Steve Baker

Mr Tom Harris

Julie Hilling

Kelvin Hopkins

Kwasi Kwarteng

Mr John Leech

Paul Maynard

Gavin Shuker

________________

Examination of Witnesses

Witnesses: Vice-Admiral Sir Alan Massey KCB CBE, Chief Executive, Philip Naylor, Director of Maritime Services, and Sue Ketteridge, Director of Finance and Governance, MCA, gave evidence.

Q1 Chair: Good morning and welcome to the Transport Select Committee. Would you please like to identify yourselves with your name and your position? It is for our records.

Sir Alan Massey: Madam Chair, good morning. I am Sir Alan Massey. I am the Chief Executive of the Maritime and Coastguard Agency. On my right I have Mr Philip Naylor, who is my Director of Maritime Services, so he deals with all of the customerfacing aspects of the agency. On my left is Mrs Sue Ketteridge, who is my Finance and Governance Director.

Q2 Chair: Thank you, Sir Alan. I welcome you here this morning, and to your post. You have had an interesting start to your post, haven’t you? You have inherited, I think, a plan to cut back on half of the coastguard centres, causing a great deal of consternation. I don’t think you drew this up, Sir Alan, did you? Could you perhaps tell us how this plan came to be put together and the role you had in it?

Sir Alan Massey: Of course. Could I just start, though, by saying that we are very pleased to have a chance to be here? This is the first time my team and I have been before your Committee. We hope this is the basis for a constructive and positive relationship over the next months and years. From a personal perspective, I am particularly very pleased to be here at a relatively early stage in my tenure.

On the question you ask regarding coastguard modernisation, it is the case that the modernisation programme has been in gestation for at least two years, if not a little bit more, because it has been well regarded that the coastguard system needs to be modernised again. I would say, though, that since I have been in post a lot of personal focus has been put on how we deliver the best possible option. That is what we see reflected now in the consultation document that we put forward in December.

Q3 Chair: But you, in fact, are not the author of this document, are you? Is it correct that these proposals were drawn up before you took your post?

Sir Alan Massey: No, I am the author of the document, Madam Chair. My name is on it. My imprimatur is on it.

Q4 Chair: I know that your name is on it, but who put these proposals together? Are you responsible for the way in which they were put together and the nature of the consultation that took place before the document was put together?

Sir Alan Massey: As I said, the whole coastguard modernisation proposals have been in gestation for some time. It is in the last few months that they have actually crystallised into this.

Q5 Chair: Sir Alan, I want you to answer the question I am putting to you. A consultation document has been put together. A number of very major queries have been raised about it, including the way in which it was put together, and the nature or absence of the consultation that went before those proposals came together. I am asking you what your role was in this. You took post in July.

Sir Alan Massey: Yes.

Q6 Chair: I am asking you, are you the author of these proposals? I am not asking you if you are supporting the proposals. I am asking if you are the author of them.

Sir Alan Massey: I understand. Since I joined office on 20 July, I am entirely responsible for everything that has gone forward into that document.

Q7 Chair: You are responsible, but you are not the author of them, are you?

Sir Alan Massey: No. There is a team that has been putting together these proposals over, as I have said, two years or more.

Q8 Chair: Your Department has been asked to find a 33% cut over the comprehensive spending review period. Is that the reason for the plan to cut the coastguard centres involved?

Sir Alan Massey: No, not entirely. The coastguard modernisation programme has been in gestation long before the current Government took post.

Q9 Chair: Sir Alan, you have told us that, but I want you to answer the question I am putting to you. I am asking you if the plans that are now in front of us are to do with trying to find part of, what, a £43.7 million saving over four years?

Sir Alan Massey: For my agency, I am required to find a 22% budget reduction in my programme between now and 31 March 2015. In seeking to find those savings, we have had to put forward a number of savings options. One of them does affect the coastguard modernisation programme.

Q10 Chair: So this is part of it.

Sir Alan Massey: It is part of an overall strategy to bring my expenses or my programme expenditure into line with the budget provision I have been given now for the comprehensive spending review.

Q11 Chair: Could you tell us what type of risk assessment was carried out before the proposals were put forward, and where we can read about it?

Sir Alan Massey: Yes. At every stage of considering what the various options were we have done a risk analysis. We always do. As an emergency service provider, it is absolutely second nature that we look at every possible change to what we are doing and assess the risks and impacts, and go forward on that basis. What you will be able to read, Madam Chairman, is that later this week we will be publishing what is effectively a compendium of all the risk assessments that have been done in relation to the future modernisation programme.

Q12 Chair: What does that mean? Does that mean risk assessment in relation to these proposals? It is normal that when a consultation of this nature is published there is also a risk assessment published. This has not been the case in this instance. Why is that, and what is it that is going to be published, even if it is late in the day?

Sir Alan Massey: What will be published is, as I say, a compendium of all the assessments that we have done. The assessments have been based, fundamentally, on the current system that we are operating. We run what is an effective but, in my view and in most people’s view, not a terribly efficient system. Therefore we have assessed the risks that are embedded in that. How could it be made better? In particular, how could it be more resilient? The analysis then sets out a number of mitigation measures which will find reality in these proposals if they go forward as planned.

Q13 Chair: But why wasn’t this published in the normal way, with the consultation?

Sir Alan Massey: I am not familiar with a normal way of publishing risk assessments.

Chair: That is the normal way.

Q14 Paul Maynard: Clearly you have set out in your consultation document how the activity of coastguards has increased over recent years, how the areas of our shipping lanes have become busier, and how you have been called out on more incidents. Can you explain to me why, as a consequence of those increasing indicators, your answer to the challenge of the future is to shrink the number of operating bases coordinating them?

Sir Alan Massey: Yes, I can very easily account for that. Actually, you have to look at the system that we are operating at the moment, whereby we have a number of stations-18- around the coast. They are linked together in pairs but they are not linked together beyond the pairs. That means that, as incidents ebb and flow, either diurnally or across the seasons of the year, we have no capacity to distribute workload or to make better use of the coastguards that we have. If I can just give an example: last night I will have had between 70 and 80 highly professional, welltrained coastguards on watch. I have not checked the figures, but I doubt that they will have had more than a dozen incidents to deal with. Yet, in August, on a bank holiday, I would expect the number of incidents for those same number of watchkeepers to be around 150 to 160. So on the one hand, my work force is underemployed, and on the other hand it is out to a clench. We are seeking to find a way where we can cater for the expected rise in incidents by teamworking, networking, and better distributing workload.

Q15 Paul Maynard: Why could you not have improved the interoperability within the existing network? Why does improving interoperability require a reduction in the number of bases?

Sir Alan Massey: Because what we are seeking to achieve is a stronger critical mass of professional coastguard coordinators located in fewer locations but able, therefore, to exploit the economies of scale, and this critical mass issue, which allows big teamworking, using technology that is relatively simple to implement, but to give you a far better sense of, "Here’s my work force; here’s my load. Let’s deal with it," rather than the way we are dealing with it at the moment.

Q16 Paul Maynard: What assessment has your organisation made of the impact of the closure of the Tyne, Oban and Pentland coastguard centres five or six years ago?

Sir Alan Massey: Sir, thank you for raising that particular point. It is a good one, because we closed those coastguard stations about 10 years ago. We always carry out thorough incident analysis after any incident has taken place. Having done that for all those three stations, we discovered not a shred of evidence to suggest that there is any linkage between cause and effect, either for the incidents happening or for their handling.

Q17 Paul Maynard: Have you published those assessments?

Sir Alan Massey: No, we haven’t, no.

Q18 Paul Maynard: Do you not think that would be helpful to publish alongside the consultation?

Sir Alan Massey: We can always do that. We can always go back and look at incidents, for example, those pertaining to what was the Pentland area, and provide what would effectively be a negative assessment.

Q19 Mr Harris: Sir Alan, you said that most people think that the coastguard is inefficient. Who are these people?

Sir Alan Massey: They might not use the word "inefficient", sir, but I go round the coastguard stations, and as I ask them about their reactions to the current proposals, every single one of them so far has said, "Yes, we recognise that we are not in the best configuration that we could be; we recognise that you need to close some coastguard stations because it is not as effective as it could be."

Q20 Mr Harris: So it is people who work in the coastguard stations who want this.

Sir Alan Massey: These are professional coastguards who understand the system. That is not necessarily what we are getting back from the public, and I can perfectly understand that, because their intimate knowledge of the coastguard operation would be relatively limited. But hearing it from my own coastguards, to say that the system needs to be modernised, I find quite encouraging.

Q21 Mr Harris: You expect, in response to consultation, that many of your own people will be responding saying, "Yes, please close these centres."

Sir Alan Massey: We have yet to analyse all of the consultation responses that we have had. I am expecting quite a lot of critical appraisals of what we are going, for other obvious reasons.

Q22 Mr Harris: Can I suggest that you are not going to get many positive responses from members of Seawatch MRCC Falmouth?

Sir Alan Massey: No, nor indeed from many others.

Q23 Chair: I think that can be replicated from other areas as well. You started off now just saying that the coastguards are supporting the closure, and Mr Harris has given us an example where that is not the case. There are other examples too. It is a curious statement.

Sir Alan Massey: The difference I would draw, Madam Chairman, is that they all accept that modernisation is required, but they might not agree with what is in the proposals.

Q24 Chair: So would you then rephrase your statement to us? You did indicate before that the coastguards would agree with these plans. Now you are rephrasing that to say not necessarily these plans.

Sir Alan Massey: Madam Chairman, I didn’t say that. What I said was the coastguards would put their hands up and say, "We need to close stations; we are relatively inefficient and we need to change." The sort of objections I am getting are to the detail of the issues that are being put forward in the proposals.

Q25 Chair: Including a detail of closure?

Sir Alan Massey : Yes.

Q26 Mr Harris: Can I just move on to the consultation itself, and I use the word "consultation" advisedly? You said you are not aware of the normal procedure for consultations. So before this consultation process started nobody drew to your attention the code of practice on consultation. Is that correct?

Sir Alan Massey: No, that is not the case. We did consult with the Cabinet Office and the department within the Department for Transport that deals with consultation processes. I was not specifically aware of the requirement to publish risk assessments.

Q27 Mr Harris: Yet the code of conduct says explicitly: "Estimates of the costs and benefits of the policy options under consideration should normally form an integral part of consultation exercises, setting out the Government’s current understanding of these costs and benefits."

Sir Alan Massey: Yes, I am certainly familiar with that.

Q28 Mr Harris: Including risk assessments.

Sir Alan Massey: I am very familiar with that, but I didn’t see-did you say risk assessment in there?

Q29 Mr Harris: Presumably risk assessments would be included in the costs and benefits. I would suggest that a cost might actually be an increase in risk, but that is perhaps just me.

Sir Alan Massey: I didn’t read it that way. It is not explicit in the guidance, and I stand corrected if we have made a mistake.

Q30 Mr Harris: Is there a particular reason then why you are now going to publish your compendium of risk assessments?

Sir Alan Massey: Yes.

Q31 Mr Harris: If you don’t see the need for it, why are you publishing it?

Sir Alan Massey: Because we have been asked to do so within the public consultation process, and we are trying to be helpful; we are trying to be supportive; we are trying to get public support.

Q32 Mr Harris: Wouldn’t it have been more helpful to publish that information at the start of the consultation?

Sir Alan Massey: It may well have been, but it was not an explicit requirement. We will meet the requirement that people are now laying upon us and we have no hesitation in doing that because we have a clear conscience.

Q33 Mr Harris: Do you understand why people feel quite strongly that a risk assessment should have been published at the start of the consultation?

Sir Alan Massey: Do I understand? No. I don’t know why people have latched particularly on to a risk assessment. The nature of business, the nature of all of our policy making within this Department, or certainly within my Agency, is such that we are always analysing impact and risk. We don’t necessarily make that publicly explicit, but if there is a requirement for us to publish that data I can do that. In fact, we have undertaken to do that this week.

Q34 Mr Harris: Sir Alan, you said in your consultation document that you accept that the seas are becoming busier, there are more vehicle movements, vessels are becoming larger and less manoeuvrable, and you are also saying that you don’t understand why people are concerned that a risk assessment was not published at the start of this consultation exercise. Is that correct?

Sir Alan Massey: I am sorry, but I don’t really see the connection directly between an explicit risk assessment and the work that we have done. But I am very happy to make a risk assessment explicit, which will mean pulling together, as I have said, a compendium of all the work that we have done up until now.

Q35 Mr Harris: But given that the job of the coastguard is to save lives-

Sir Alan Massey: Yes.

Mr Harris: -I would have thought that a risk assessment associated with the closure of a certain number of coastguard centres is a kind of obvious thing, isn’t it? You seem to be completely oblivious to this concern-a public concern-that when you close coastguard centres you may have an effect on risk.

Sir Alan Massey: I am sorry, but I am not oblivious to the public interest.

Q36 Mr Harris: I have just one last question. When I said that consultation was a generous term to use here, I am going to give you an example. Question 1, to which you have asked the public to respond-is this: "We have set out the changes that will affect the way the Coastguard needs to operate. Are there any other changes and pressures that should be taken into account in our plans for a modernised Coastguard service?" Quite clearly that means this is not a consultation. What you are saying is, "We have made this decision. Are there any little details at the edges you want to tamper with?" That is basically what you are saying. I see Mr Naylor is shaking his head, but the question is, "Are there any other changes?", presumably in addition to the ones that you proposed here. Is there a genuine willingness to look at your substantive proposals and change or scrap them, depending on the evidence and the consultation responses from the public?

Sir Alan Massey: Yes.

Q37 Mr Harris: Do you accept then that that question is rather loaded?

Sir Alan Massey: We might have used an alternative word. We might have said "alternative" rather than "other", but the point is the Government has been very clear-

Q38 Chair: Why do you think you didn’t say "alternative"?

Sir Alan Massey: I don’t know. I can’t account for that slip in the lexicology. All I would say is-

Q39 Chair: Sir Alan, I think it is a little more than a slip in lexicology, as you put it. It is a pretty fundamental question isn’t it? If you are consulting genuinely on a proposal and you are asking people’s views and you say, "Do you have any other points?", it is not lexicology, is it? It looks like intent.

Sir Alan Massey: The whole intent of the consultation-underwritten by Ministers as well as by my Agency-is that we have an idea, we have a proposal which happens to be what we think is the best approach to modernising the coastguard, but we are genuinely going out for a public consultation.

Q40 Chair: Who wrote the consultation? Who put those words together? Was it you or was it Ministers? You have just said Ministers were involved as well.

Sir Alan Massey: No. Ministers published the consultation. Ministers announced the consultation.

Q41 Chair: Who framed that question?

Sir Alan Massey: I did.

Q42 Chair: You framed the question?

Sir Alan Massey: I did, yes.

Q43 Chair: So it wasn’t the Ministry. It was you?

Sir Alan Massey: I framed the question. Ministers approved the documents.

Q44 Mr Leech: First of all, can I ask why the 18 stations are where they are at the moment?

Sir Alan Massey: Yes. They have evolved over time. When we moved, in about the 1970s, to a coastguard laydown that was reflective of the fact that we now have radio telecommunications that we had not had previously, we sort of collapsed the structure from well over 100 stations into 28. Since then they have reduced, for various pragmatic reasons over time, to the current 18, plus that small centre in London. They are there because they reflect, I suppose, a sensible, strategic geographic dispersal of our capacity around the UK coast. What we have now is a legacy structure.

Q45 Mr Leech: When it went down from 28 to 18, why were those decisions made to keep the current 18 rather than the 10?

Sir Alan Massey: I have to say I was not in post at the time, so I don’t know the actual rationale for that, other than it would have had to do with improving technology, which allowed stations to be linked for the first time. That was certainly to do with the Oban, Pentland and Tyne Tees closures at the turn of the millennium, but for other reasons I can’t account for that.

Q46 Mr Leech: Why has the decision been made to have two main national network stations and then five other substations? What is the rationale behind Aberdeen and Southampton/Portsmouth and then a combination of five others?

Sir Alan Massey: Can I split that into two: first of all the conceptual and then the actual choice of locations? Conceptually, we have an opportunity now to make better use of technology and far better use of the skills of our people by bringing together the coastguard coordination effort into two major centres. Technology allows us to do that without even much of a leap, to be perfectly honest. Bringing the teams together, as I discussed earlier, does allow for far better concentration of effort, economy of scale, use of critical mass, sharing of experience, all of the positive things about bringing people together in a common effort.

The choice of the Aberdeen and Southampton/Portsmouth areas was to do, first of all, with sensible geographic dispersal, so when you are getting bad weather or potential pandemics in the future in one part of the country the chances are you won’t get the same in another. We look for the maximum geographic dispersal. We wanted to place the main operating centres relatively close to areas of maritime concentration. We wanted them in areas of significant employment opportunity and what have you, so they became natural choices. Plus, there are benefits in locating a MOC in the north in a current building that has capacity to absorb that without too much extra cost. There is a question of value for money in this one as well. The whole notion behind the five centres-

Q47 Mr Leech: Why two? Why not one? Why not a call centre operation in India, for instance?

Sir Alan Massey: We did go through that analysis, and of course when you do the risk assessment on going down to one station you quickly find that putting all your eggs in one basket might not be that sensible. We thought at least a second centre would give us resilience. Resilience, of course, is what lacks most of all in what we have at the moment.

Q48 Mr Leech: Why these subcentres around the country?

Sir Alan Massey: If you pursue the argument to its logical conclusions, you could probably do this from one location in the centre of England or the centre of the UK. We want, first of all, to mitigate the risk of failure by having at least two major centres. Beyond that, just looking at the diurnal loading, in other words the amount of work that derives from coastguard coordination during the day, it makes sense to disperse some of your effort and to spread amongst a regionally sensibly located organisation of smaller centres so that you have a bit more resilience. It is really as simple as that.

Q49 Mr Leech: Aberdeen has been picked for one of the major centres. My understanding of some figures that I have seen is that Aberdeen is the most expensive one to run, certainly more expensive to run than, say, the one in the Shetland Isles. If this is about cost savings, why go for the most expensive option?

Sir Alan Massey: Because part of the factoring in the cost equation is how much it would cost to establish the greater size of a maritime operation centre in Aberdeen as opposed to somewhere like Shetland. You also have to consider issues like the work force availability for recruiting and retention and you have to look at issues of telecommunications resilience. All of these factors played into the choice for Aberdeen. I will admit that there are also factors that militate against Aberdeen and one of them could well be this issue of cost of living or whatever else might be there, but we take a balance of factors. All of our judgments are based on a balance of factors.

Q50 Mr Leech: Can I just ask what the logic is about having the subcentres only open in daylight hours, because my limited knowledge of Shetland would suggest to me that it would be open for 20 minutes in the winter and 20 hours in the summer? What is the logic behind that?

Sir Alan Massey: Daylight hours is a generic expression of the need or the intent to have these extra centres open to cover that part of the day when, traditionally, most incidents tend to happen: 70% of all coastguard incidents happen between the hours of 9 in the morning and 7 o’clock at night. We have not yet nailed the actual timings because we need to discuss that with our work force and, of course, we need to negotiate that with the unions too. But, broadly speaking, we are looking at early morning to midevening as opening hours because that covers the maximum spread of load.

Q51 Mr Leech: One final question, Chair. Just in relation to telecommunications failures, which you have mentioned, I understand that in the Shetland Isles there were some telecommunication failures last year which meant that they would not have been able to effectively do their job without local support there. Is it not the case that in certain locations, particularly the remote locations, whether it be Shetland and Orkney or the Western Isles, that there is a real danger that without that local base they may not be able to get the information passed on to the actual people going out?

Sir Alan Massey: I completely understand what you are saying, sir. We are in discussion with Shetland about the figures here. It depends what sort of telecommunications outage you are talking about. The overall reliability of telecoms in Shetland is 99.98%.

Q52 Mr Leech: I understand it was a lightning strike in November.

Sir Alan Massey: Yes. The lightning strike affected-

Q53 Mr Leech: They relied on people with radios on top of hills.

Sir Alan Massey: Yes, as we do as a fallback in all of our locations. But the telecommunications integrity is as close to 100% as one can get. We are with BT this week to talk about exactly that issue. It is 99.98% for the telecommunications reliability of the network as a whole. But, of course, we take particular interest in Shetland.

Q54 Mr Leech: But it is quite a bit less. It is still over 99%, but it is significantly lower in Shetland than it is in other parts of the United Kingdom.

Sir Alan Massey: It is. There are small, tiny, tiny percentiles of increased unreliability or increased risk, should I say, in Shetland and Stornoway because of the nature of their island location.

Q55 Mr Leech: But covering some of the most dangerous waters.

Sir Alan Massey: Not necessarily, not necessarily at all. The point stands that we need to look very carefully at how this plays in. There is a very high percentage of reliability.

Q56 Chair: You don’t seem to have looked at the specialist roles of some of the stations. For example, Falmouth is the single point of contact within the UK for the majority of foreign search and rescue.

Sir Alan Massey: Yes, it is.

Q57 Chair: Have you taken account of that in your plans for Falmouth?

Sir Alan Massey: Yes, we have. Falmouth do a fantastic job of-

Q58 Chair: Then why do you want to change it?

Sir Alan Massey: Simply because the telecommunications equipment that they use there to do this worldwide role could be operated from anywhere. In the transition period that we have between now and the fulfilment of these proposals, if they go forward, there is plenty of time to relocate or train up expert staff in that sort of skill into one of the MOCs, because, frankly, if we go forward with this maritime operating centre on a 24/7 basis that is where we would want to terminate worldwide cover.

Q59 Chair: So you consider you have taken account of Falmouth’s expertise in this particular role?

Sir Alan Massey: Yes, we have.

Q60 Chair: You have some options between different stations, to close or not. Can you tell me why Crosby in Liverpool was left off the initial plan, and you only had Belfast, and then you hurriedly-or somebody hurriedly-wrote Liverpool down? Why was that?

Sir Alan Massey: Madam Chairman, it depends how one describes an initial plan. The plan that went forward on 16 December and was announced for consultation is the final plan that we all signed up to as the most equitable, sensible, pragmatic and practical way forward. But I won’t deny that in the run-up to that period, and presumably over the two years before I joined, all sorts of different options had been put forward. What has gone forward now leaves, I think, exactly the right question open, because we could not come to a definitive answer on the balance of factors between, on the one hand, Belfast and Liverpool, and on the other, Shetland and Stornoway. It was, in my view, exactly the right thing to go forward with those questions to an extent still open and to hear from the public what they thought perhaps ought to be the factors that should carry the most weight.

Q61 Chair: I think you will find that Liverpool was added at a fairly late stage, and it rather looks like a last minute thought to put something down perhaps without meaning it. Am I wrong?

Sir Alan Massey: It was always in consideration as a station that could stay open. I won’t deny that at one stage it did not feature in the final chosen list, but by the time we got to the point where the document was finalised and we agreed the way forward it was back in as an option, as was Shetland and Stornoway.

Q62 Gavin Shuker: If I can explain some of the consternation of this Committee, it is that you have stated that you are facing a busier job over the coming years than you have done in recent years and yet the response to that is to cut back on budgets. You stated that 22% of your budget would go by 2015. Is that correct?

Sir Alan Massey: By 31 March 2015, yes.

Q63 Gavin Shuker: How was that 22% figure arrived at?

Sir Alan Massey: I can pass to my Finance Director for the detail, but in principle it is a combination of a reduction against my programme budget and then a specific reduction against the administration budget. But, Madam Chair, may I pass the floor to Mrs Ketteridge?

Sue Ketteridge: Good morning. Yes, as Sir Alan has mentioned, the 22% is a combination of two things. It is a reduction in programme and also, in common with other Government Departments, it is a reduction in our administrative budget. The reduction in the level of administrative budget is 33%, again the same as it is across the rest of Government. So if you aggregate the two together, arithmetically, it comes out at 22%.

Q64 Gavin Shuker: What is the split between those two, roughly? Is admin round about a third of the savings there or about half of the savings?

Sue Ketteridge: It is just over a fifth.

Q65 Gavin Shuker: Can you or anyone on the panel explain to me your views on why it would be sensible to cut back on administrative costs in an agency that deals primarily with public safety?

Sir Alan Massey: It is quite difficult to deal with, because administration costs also involve areas in which we are quite productive. It is quite easy to see administration as the overhead, the unnecessary backroom staff. Actually, a lot of the regulatory business that we are involved in and the policy making falls also into the administration bracket.

Q66 Gavin Shuker: Just on the programme side then, how did you arrive at the specific decision to cut back in programme?

Sue Ketteridge: As part of the spending review, a number of options were considered, along with many others across the Department. Those recommendations were put to Ministers. Ministers took a view on priorities both within the Department and across Government. As a result of that, the measures that were announced on 20 October included a number relating to this agency. So we were not singled out or treated differently from the rest of the Department, or indeed anyone else that was subject to the spending review.

Q67 Gavin Shuker: I suppose the conclusion that many would come to in an environment in which coastguarding is effectively a growth industry currently would be that you would be arguing for an increase in your programme budget, despite any administrative savings that you might make.

Sir Alan Massey: I would not be doing that, sir, while I am highly conscious of the fact that, despite the best efforts of my excellent people, they are working in a structure which is fundamentally inefficient, for the reasons I have pointed out earlier.

Q68 Gavin Shuker: You are stating that these programme changes are not driven by the overall desire of this Government to reduce the fiscal deficit. They are driven by an assertion that this is the best way to provide coastguard activity in the future.

Sir Alan Massey: Yes, and best borne out by the fact that this whole modernisation project started well before the current Government took office and decided to address the fiscal deficit in that way. Again, every coastguard signs up to the notion that they are not as efficient as they might be and that coastguard station closures are needed.

Q69 Gavin Shuker: Just finally, if you did not have to find about £7.5 million each year in savings, what would you spend that money on?

Sir Alan Massey: I am afraid I can’t speculate. I have never been in a position of thinking where I could spend more money. I don’t know. I would have to go back to the book and have a look.

Q70 Kwasi Kwarteng: I would have thought most of the members of this Committee fully understand, given the nature of the fiscal position, that you are going to have to make savings. I think that is something that is selfevident. But if I can just rephrase a question that my colleague made in a slightly different way, if you are making savings, which is what you are doing, what do you think the biggest risks are, going forward? You run this Department. You are obviously having to deal with less money going forward. What are the biggest risks in that situation?

Sir Alan Massey: The biggest risks are to the integrity of service delivery across all of the range of things that the MCA is required to do. So I have got to mitigate against those to the extent possible and try and make the savings in such a way as to have the least impact on our output.

Q71 Kwasi Kwarteng: That is a very general answer. Is there any more specific detail you can give the Committee?

Sir Alan Massey: In terms of the savings that we are seeking to achieve from coastguarding, we are trying to mitigate against the inherent risk there of ending up with a coastguard that is no longer fit for purpose, by designing something that is even more fit for purpose than what we have at the moment.

Q72 Kwasi Kwarteng: You think there is a risk that it will not be fit for purpose as a consequence of these savings.

Sir Alan Massey: I think it is absolutely inevitable that whenever one goes into any sort of change programme there is always risk there, and we are very familiar with it. The key thing is to identify what the risks are, acknowledge them, publicise them if necessary, but certainly then design ways of mitigating it. The point at which I find I cannot mitigate a risk is the point at which I go back to the Department and say, "This just won’t work." But at the moment, on coastguards in particular, I believe that we have a way forward that offers a better service-actually a safer service because of the resilience and the better use of professional skills, a reduced risk of skills fade-than we have at present.

Q73 Kwasi Kwarteng: How do you judge yourself? If after three or four years you have made these savings, how would you know or what sort of benchmarks will you look at to see that you have provided the service that people should expect?

Sir Alan Massey: We have a fairly well worked-up series of service standards against which we measure ourselves every year and that is reported in our annual report and accounts. We also have an intimate knowledge of statistics to do with search and rescue incidents and the provision of search and rescue in amongst a rather wider partners’ group. So it is not as if we are not quite cleverly and carefully audited to know the scene, and I can talk quite a bit about internal audit if you would welcome that. But I am pretty conscious that there are a lot of metrics against which my performance or the Agency’s performance is measured, and of course we will use that extensively as we go forward with the changes.

Q74 Kwasi Kwarteng: After this process of cuts or savings it will be very clear to you if you are actually doing your job well, and it will be clear to the members of the Department as well.

Sir Alan Massey: I think it will, and not just in emergency response. In emergency response, it becomes extremely clear very quickly, because statistics to do with accidents, fatalities and mishandled incidents are very easy to get hold of. But in regard to other areas of what we seek to achieve as well, such as ship surveying, ship inspections, pollution control, the whole gamut of what the agency is up to, we have a pretty sophisticated series of metrics, including customer surveys on which we are very much focused, to tell us how well we are doing. I would just make this point. I would never undertake any sort of change if I felt that it was going to make safety at sea any less sure than it is at the moment.

Q75 Kwasi Kwarteng: You said customer surveys. That is something you do all the time, is it?

Sir Alan Massey: Yes.

Q76 Kwasi Kwarteng: Are you happy with the responses you are getting?

Sir Alan Massey: Yes. I would like to have a 100% satisfaction survey. At the moment most of what we do gives us results of somewhere in the 80s, having started in the 60s and 70s. So we are making progress. That is the important thing for me. You will never please all the people all the time, but if I can see a continued uplift or increase in the levels of satisfaction we are achieving, then I will be satisfied. In one respect, being a regulator sometimes does not necessarily generate the customer response one would always want, but again, we are working at trying to get a better balance there.

Q77 Steve Baker: Sir Alan, having grown up in Cornwall, I am very conscious of the importance of local knowledge, and I think in particular of coastal rescue and smuggling. I am very familiar with Falmouth-I see my hon. Friend the Member for Truro and Falmouth in the room. What would you say to those people in such areas who are most concerned about the loss of local knowledge?

Sir Alan Massey: I would say a number of things. If I may, again I will pass the floor to Philip Naylor here for a little more. Just in strategic terms, local knowledge is important-we acknowledge that as well-but it does not reside only in the coastguards, even though they are very proud of it, quite rightly so, and they are well exercised in it. But it resides in a number of different areas, and we need to be smarter about the way we capture, store, share and assess it, and the way that we draw on other sources for actually using it. But can I hand the floor to Mr Naylor?

Philip Naylor: Local knowledge means many things to many people, and to many people it means the knowledge that they have in their head, which requires them being able to recall that knowledge and apply it in a situation and then put it to good effect. But the type of local knowledge that we see as being of most benefit to our activities is of a very detailed nature which is highly specific to the type of incident that we are trying to deal with.

If I could give you an example, with many of our volunteers in the coastguard rescue service, the level of local knowledge that they have, is very, very proximate to the local communities within which they operate. It will go down to the level of detail, for example, of how to find a particular key to a padlock to get through a particular farmer’s field gate so they can get to a scene of a rescue. Similarly, with the Royal National Lifeboat Institution, the level of knowledge that their crews and their boat coxswains have about the waters within which they operate is very, very detailed. That contrasts with the way that local knowledge is being projected through our coastguard rescue centre organisation, which is in relation to a coastguard officer on watch at the time being the recipient of a call, being in possession of knowledge that helps them then to initiate the tasking of assets and, if you like, in their own mind, I suppose, setting the scene for a particular rescue, based on knowledge either that they have or that they think they have.

I think there are two issues there. The first one is that we train coastguard officers to go through a process of gathering the facts, assessing the factors and working out what the issue is and what the facts are telling them about the type of rescue that they need to go through, without drawing on any particular knowledge that they may have gathered through their own experience. The second thing is-

Q78 Chair: Can I just stop you there, Mr Naylor? What you have just said appears to be entirely at odds with coastguard regulations, which state very clearly that "all grades of coastal officer should acquire a thorough local knowledge", and then it details exactly what that means. It talks about very specific things such as navigational hazards, coastal features, shipping activity, potential problems. That emphasises the importance of very local knowledge as part of regulations, and you are now trying to distance yourself from that a bit. It doesn’t add up.

Philip Naylor: I don’t think that’s what I am doing at all, with respect, Madam Chairman, because the types of local knowledge you have just outlined are more general to a stretch of coastline, more in relation to the topography of a stretch of coastline, more in relation to the features that would appertain to a stretch of coastline, than to some of the very detailed aspects of local knowledge that are being projected as being relevant.

If I could just go on to make the point I was going to make, it is that there have been occasions over the last year or two where an individual, upon receipt of the call from the first responder, has made a very hasty assessment upon what they thought their local knowledge told them about the way an incident should be initiated, without going back to the training that we have given them about assessing the facts and the factors and assimilating an overall picture. They have rushed in and they have gone to the wrong place. They have made the wrong assumption about what they thought they knew.

In relation to the information which is contained in our instructions, clearly there needs to be a level of availability of information and knowledge of a stretch of coast that a coastguard officer will be working on. At the moment, with the way we are currently organised, with some regionally dispersed rescue centres, that tends to be through the history of the organisation gathered through an individual acquiring local knowledge through inspection of charts and maps, and going out and looking at sites as a way of getting that local knowledge. That will continue to have a part to play in the future, but it won’t be the only way that an individual will get their local knowledge, because I think we are all aware of the way that there are now many ways of getting knowledge about topography, landmarks and significant features, whether by studying information that is out there on the web or by looking at charts and maps. I think it is one of those things that will change with the way individuals and generations gather and assimilate information that they can use.

Q79 Steve Baker: I am most grateful for your answer, which is very detailed. One of the things that strikes me-and I say this as a software engineer-is that it seems we are perhaps going to overuse technology and aggregate away or hide or obfuscate some of the rich knowledge that people have of areas.

I hear what you say about going back to training around facts and factors, but if I can put a concrete example to you, what about the yacht that comes in at an unusual time in an unusual place and launches a boat, and somebody needs to go down and see if smuggling is happening? How are you going to capture the sort of knowledge such as, "Where should they go? Where’s a good landing place on this coastline at this state of the tide?" Is that all going to be available in a computer system, or will someone know?

Philip Naylor: The particular example you give, of course, is not related to the work of the Maritime and Coastguard Agency. That is not the type of work in which our coastguard rescue centres are engaged. Whilst there is a degree of surveillance that we perform, it tends to be, because of the nature of the systems that we use, through AIS, with the much larger ships. What we are really looking for and the thing we are much more interested in is a ship which is in difficulty and at risk of jeopardising the lives of those on board, or indeed of the ship itself getting into difficulty and presenting a risk of pollution. But in terms of the very detailed and surveillance type activity, looking at, for example, some illegal act, that is not the business of the Maritime and Coastguard Agency.

Q80 Steve Baker: I perhaps remember my youth when I saw coastguards turning up in Land Rovers to look out over the sea at what was going on. I take it that doesn’t happen now.

Philip Naylor: Our rescue volunteers, which is by and large where our public face of the coastguard is projected, are certainly out there in their vehicles. They don’t use Land Rovers any more, but they are out there in their vehicles and they will continue to do so. The proposals that we have put forward work on the basis that we will continue to maintain and indeed develop our coastguard rescue service, but whether they are out there looking for one thing or another is a separate question.

Q81 Steve Baker: If I may, without dwelling on the particular example, do you think that you can use that voluntary force to develop and maintain the local knowledge which people are concerned might be lost?

Philip Naylor: Not only do I think we can maintain it, but we already have it, and it is used to extremely good effect on every occasion when a coastguard rescue team is deployed to effect a rescue.

Q82 Chair: Are you going to concentrate on using volunteers for local knowledge rather than other parts of the service? Is that the plan?

Philip Naylor: No more to the extent than we do already, because at the moment our coastguard rescue organisation is very heavily reliant on the people who effect the rescue, whether that is the coastguard rescue service effecting a coastal rescue, the RNLI or a lifeboat effecting a rescue at sea. The rescue, the business of saving the life, relies upon the knowledge that is in the heads of those individuals. The local knowledge that has been projected as being very important in relation to our coastguard rescue centre officers is to do with the initial assessment of the rescue and the decisions that are taken to task it at the outset.

Q83 Chair: Yes, but it is all about local knowledge. We will leave the question on that for the moment.

Philip Naylor: As I say, the most effective local knowledge is very local.

Q84 Paul Maynard: Forgive me for dwelling on local knowledge but, correct me if I am wrong, as I understand it, staff at the 18 existing coordination centres currently have to sit an exam every two years in local knowledge, and they have to pass that and get a pass of at least 80%. So local knowledge in the coastguard context has a very specific term and meaning. Are you able to confirm to me that staff at the two proposed coordination sites will also have to sit that exam every two years with a similar pass threshold, and that their level and detail of knowledge will thereby have to extend to a much greater range of coastline? How will that system be transferred under your new proposals?

Philip Naylor: The arrangements that we have for local knowledge at the moment are, I think it is fair to say, drawn from the past when our coastguard organisation was very widely distributed around a large number of very small stations, which essentially were look-out posts with a coastguard looking out to sea with a telephone and a bell. Many of the procedures that we have still relate to the way we did business in those days. What happened was radio came along and that allowed us to concentrate our coastguards into a smaller number of larger centres. The work that they now do in those rescue centres is not to look out to sea. They are not actually surveying the coastline in any meaningful sense. They tend to be waiting for calls to come in by 999 or by radio.

To the extent that many of the procedures that we now have are, if you like, drawn from the way we were organised in the past probably gives an example of the extent to which modernisation of the coastguard service is now required to take us forward into the future. So, from looking out to sea and watching, we moved to radio, and we now are able to move to a much more networked system.

Q85 Chair: Could you answer the question that Mr Maynard has put to you?

Philip Naylor: Yes.

Chair: With a yes or a no.

Philip Naylor: There will be a requirement for coastguard officers to have a degree of coastal knowledge and knowledge of the maritime domain. I think it is unlikely that it will extend to the level of detail that you have explained, and it certainly won’t be as currently set out.

Q86 Paul Maynard: So we are losing the local knowledge test, to all intents and purposes. You are ceasing the 24-hour dedicated listening to a VHF line. We are also losing that crux of local knowledge that allows someone to know the difference between Blackpool in Lancashire and Blackpool in Devon, yet you are also trying to persuade me that you can still maintain the maximum five-minute call-out limit for getting to someone who has called in in distress. How can you rationalise those two points? It strikes me that you are making it much much harder for that five-minute limit to still be maintained. Can you confirm the five-minute limit will still apply despite all these changes?

Philip Naylor: Yes, I can.

Q87 Paul Maynard: Furthermore, Sarah Newton, in her Westminster Hall debate, made it very clear that Falmouth had a particular international role, as the Chair mentioned earlier. I am struggling to understand why you are proposing to close Falmouth and move services and provision to an as yet unconstructed, unspecified location in either Southampton or Portsmouth when you already have somewhere that, as I understand it, is fit for purpose in Falmouth. What is the logic of that when you are facing 22% savings?

Philip Naylor: To begin to answer that question, following on from the explanation that Sir Alan gave in relation to the decision about the number of maritime operation centres we require, to handle our normal workload-

Q88 Chair: Mr Naylor, you have been asked a specific question about Falmouth. Can you give us an answer on that?

Philip Naylor: Well, the answer about-

Q89 Chair: We know about the big picture, we know the rationale and the way you are looking at it, but we want answers to specific points. What is the answer in relation to Falmouth?

Philip Naylor: The answer to the specific point about Falmouth, I think, again goes back into the seeds of time for two reasons-

Q90 Chair: What is the answer to what you intend to do now, not the seeds of time?

Philip Naylor: Perhaps if I can just explain why Falmouth is the centre that has been tasked with the international rescue coordination activity, it might go some way to explain how we now feel we are able to move it.

Q91 Chair: Can you keep your answer to the point, please?

Philip Naylor: I will keep to the point, Madam Chair. The reason Falmouth does the international rescue coordination is because it was always the centre which was located close to Goonhilly-the radio aerials that were able to look out internationally. With the way modern telecommunications have gone and the way we are able now to network and digitise communication, the activity of doing that rescue work that comes in from the aerials that are looking out internationally can be located anywhere.

Chair: That’s it. Mr Leech?

Q92 Mr Leech: Would it be fair to say that the intention is to bring this new system into the 21st century in terms of being a proper 21st century call centre style operation?

Sir Alan Massey: Could I resist using the term "call centre"? The intention is to do exactly as I have outlined before, which is to give us a network national system that goes with our national search and rescue responsibility, to increase the resilience of the system and to make better use of the people within it.

Q93 Mr Leech: Am I not correct in thinking that these will be two major centres which calls will be sent into?

Sir Alan Massey: Yes.

Q94 Mr Leech: So it is effectively a call centre style operation.

Sir Alan Massey: Yes, but I simply sound a note of caution, because my coastguards are very sensitive about being equated with people who just work in call centres, and I don’t mean to denigrate anybody here at all. They are very highly trained. It is a very complex, hugely demanding and stressful job they do when the call comes, so it is more than a call centre per se.

Q95 Mr Leech: As someone who used to work for the RAC in a call centre, I think I do know a little bit about call centre operations. Could you give me any figures on the existing centres in terms of how many calls that come in that don’t get answered?

Sir Alan Massey: I think the answer to that is zero, but I will check.

Q96 Mr Leech: I am not aware of any 21st century call centre operation that has a zero call failure. Certainly, when I worked for the RAC in a pretty good call centre operation, dealing with emergency situations, there were still calls that failed. So the current system, you are telling me, has a zero call failure rate-

Sir Alan Massey: To my knowledge, yes.

Q97 Mr Leech: Let me just finish. You are proposing to bring forward a 21st century style operation that will bring everything up to date. What is the danger that we will have a situation where, as with all other 21st century call operations, some calls don’t get answered?

Sir Alan Massey: I don’t know.

Q98 Mr Leech: Has no assessment been done of this?

Sir Alan Massey: I have personally not been aware of the failed call issue being a factor at all. But if I may, Madam Chair, can I take that one away and do some investigations with my team?

Q99 Mr Leech: I think, clearly, there is an issue where it could be life or death situations where calls may go unanswered, as they do in every other call centre operation of which I am certainly aware.

Sir Alan Massey: It must be a factor, because of course, unless I can demonstrate 100% reliability of all of my telecommunications and radio infrastructure, I can’t guarantee that everything would be heard. But frankly, it is not an area that I have been made aware of, so I will go away and get some data.

Q100 Mr Harris: Mr Naylor, I am guessing you are not a fluent Gaelic speaker.

Philip Naylor: That is correct.

Q101 Mr Harris: Neither am I. Don’t worry about it; it happens to a lot of us. But, going back to local knowledge, there are a lot of places, for example, in the Western Isles, that have colloquial and Gaelic place names. Gaelic is the first language of most people living in Stornoway, for example. I won’t even try to pronounce these names, but if a call comes in for an emergency at a particular location, which also happens to sound incredibly similar to an English-speaking ear, as it were, unless you have native Gaelic speakers based at your Aberdeen call centre, how can you guarantee that a confusion at that very early stage will not arise, with lives lost simply because the local knowledge of local place names has been lost?

Philip Naylor: I think we probably go back to the way that coastguards are trained at the outset because, of course, it is not just this idea of dealing with a very specific locality or language. Coastguards are dealing with international traffic on ships and all kinds of nationalities of crews on those ships. They are taught to gather the information at the outset from the caller, gather in the information that they require in order to pinpoint where the issue is, and, indeed, to look at some of the other issues such as being able to gather from systems in relation to the location of the vessel, whether it is from the vessel’s AIS or an individual, for example, who might have a mobile phone with a GPS signal. There are many ways rather than just relying on a thorough or intimate understanding of a particular accent or a particular language that allow a coastguard to do their job.

Q102 Mr Harris: I think you may be muddying the waters when you talk about the nationality of a particular ship that might be in trouble somewhere in The Minch, for instance. Whatever their nationality, they will be in trouble in a bit of British territorial waters where the local colloquial name will be well known to local people. I am picking on Gaelic particularly because for most people it is quite a difficult language to understand. Is it possible that someone in Aberdeen might pick up a call from a native Gaelic speaker talking about a particular location and not translate accurately that information? Is that possible? If it is possible, are you telling me that you are going to have native Gaelic speakers guaranteed to be employed 24 hours a day at Aberdeen?

Sir Alan Massey: None of our recruiting or appointing procedures or regulations provide for any sort of specific language skills or a particular local background. In principle, the entire population of the Stornoway and Shetland coordination centres could be Londoners. When we closed Tyne Tees in 2000, there was no evidence to suggest that any of the dialect or local topography issues became issues per se-

Q103 Mr Harris: Excuse me, Sir Alan, Gaelic is not a dialect. Gaelic is a language.

Sir Alan Massey: I accept that.

Mr Harris: It is a lot more difficult to understand than Geordie.

Chair: I think you had better concede that, Sir Alan.

Sir Alan Massey: I will concede that point and, clearly, no offence meant. The point is that we are a polyglot organisation. At the moment we do not have specific processes that say we need to have Gaelic speakers in Stornoway or we need to have Gaelic speakers in Shetland.

Q104 Mr Harris: But that is because you already have Gaelic speakers in Stornoway.

Sir Alan Massey: But that is only by chance, in truth. It’s only by chance.

Q105 Mr Harris: It is not by chance. It is because they were born there, they work there and they understand the local area.

Sir Alan Massey: Yes, but what I am saying is, the HR principles which underpin the way that we run the coastguard are blind to those sorts of issues. I come back to the point that Mr Naylor makes, which is a good one, in that we do train people to tune their ears to whatever it may be.

Q106 Mr Harris: I am sure that people in Stornoway have been reassured by those words, Sir Alan. I just need to go on to one very quick point. After the Braer disaster, Lord Donaldson recommended that the Government provide emergency towing vessels.

Sir Alan Massey : Yes.

Mr Harris: From 1994 they have been operating very successfully and very effectively in that area. Was he wrong to make that recommendation?

Sir Alan Massey: No.

Q107 Mr Harris: But you are withdrawing them now, and it is not part of your consultation.

Sir Alan Massey: No, it is not part of our consultation. The Government has decided that it is an incorrect use of taxpayers’ money to provide for those tugs. That is not to say that the tugs should not be provided, and indeed the risk analysis that we have done of the requirement for towage and salvage capabilities around the coast of the UK shows that there is still a risk and there needs to be some sort of capability. The issue is how we now consult with those interested parties to come to arrangements that will provide for exactly this sort of capability.

Q108 Mr Harris: How are discussions with the private sector going?

Sir Alan Massey: Mr Naylor has been doing those on my behalf.

Q109 Chair: Can I just ask you, where can we read the risk assessment that has been done?

Sir Alan Massey: That will be posted this week as well.

Q110 Chair: And, coincidentally, it is announced today. That is going to be posted next week. It has not been previously, has it?

Sir Alan Massey: No. Again, we have not been under any explicit remit to post risk assessments, but we have done a risk assessment, because the contract for the ETVs was up for renewal, as you are aware, this September. So, as the normal process of rolling over contracts, one takes a look and says, "Is there a need for this?"

Q111 Chair: It will be published?

Sir Alan Massey: We will publish a risk assessment.

Q112 Mr Harris: Can I go back to my original question, which concerned the fact that Lord Donaldson recommended that the Government provide emergency towing vehicles? Do you think that Lord Donaldson was wrong to recommend that the Government provide those emergency tow vehicles?

Sir Alan Massey: No, I don’t think so at all. In 1994 that was a very good call.

Q113 Mr Harris: They were recommended long before 1994. It was only in 1994 that they finally got around to providing it. You are in discussions, then, with the commercial sector, to provide replacements for these. Is that right?

Sir Alan Massey: We are currently engaged in a series of discussions and negotiations, I suppose, with the maritime sector: that is the ship owners, the tug owners-

Q114 Mr Harris: If the commercial sector does not come forward with replacements for these vehicles, what happens then? Will the Government change its mind and keep these vehicles-

Sir Alan Massey: We don’t know yet, because we haven’t yet gone all the way through the consultations that we are having.

Chair: We moved on to the towing vessels, and there are other issues. A number of Committee members have indicated they want to speak. Does any member want to pursue the coastguard issue at this point?

Q115 Mr Harris: Sir Alan, you are aware of concerns that many people have, including your own employees, regardless of what you said at the beginning that most people think that it is an inefficient service. If something were to happen in the future after this reorganisation, if someone were to die, if a vessel were to go down, with needless lives lost, and a subsequent investigation concluded that those lives would have been saved without your reforms going ahead, would you be prepared to resign?

Sir Alan Massey: Yes. Can I qualify that? I would be prepared to take the responsibility, absolutely, with no compunction whatsoever. The question of whether I resign or not is an issue between my employer and me, but I would have no hesitation in saying-

Q116 Mr Harris: Actually it is not a question between your employer and you. It is a question for you. You don’t have to stay in your job if you don’t want to.

Sir Alan Massey: This is a hypothetical scenario. I would assume total responsibility. I have no issue with that at all. The question of what happens then I don’t know.

Chair: I just want to ask my Committee members. There are other issues we do need to get on to. I know there are a lot more issues to do with the coastguard matter. Does anyone want to ask about coastguards?

Q117 Julie Hilling: You said a little while ago that one in five people were dissatisfied with the service that they were receiving. I am just wondering if you could tell us what the issues are currently with that.

Sir Alan Massey: Yes. Around 80% plus of people responding to our customer surveys demonstrate satisfaction with what we do. The examples tend to be in seafarer certification, medicals, the quality of work that we do in terms of surveys for British shipping and what have you. We don’t actually have a satisfaction survey that goes to people whom we’ve rescued as a coastguard service of which I am aware. But I would imagine that the customer satisfaction response from those we have rescued would be relatively high. We don’t cover absolutely every area, but we do try our best with online surveys.

Q118 Julie Hilling: Forgive me for being sceptical, but I always struggle when people say we are going to have a better service when we make a massive cut in it, and you are talking about losing nearly half of the staff in the service. You said that currently it lacks resilience. How is that resilience going to be improved? I know we talked about this, but you still haven’t given me any faith that you are going to improve the system.

Sir Alan Massey: Again, Mr Naylor might want to fill in the detail but, fundamentally, we have a system now. Let me take an example. If Falmouth and Brixham had a massive lightning storm, which is possible, and they both went down, then we have completely lost the south-west sector. There is no way of connecting with the VHF aerials there that would pick up a distress message. The 999 calls we could reroute, unless there was a total disaster underground as well. But the VHF aerials, which mariners rely on, would go. I couldn’t connect with them. The future system will link all of those 154 aerials around the coast of the UK to both MOCs. The most significant of those aerials, 60 or so which receive digital selective calling services, would be routed into any station you wanted. We just don’t have that at the moment. If I lose a sector at the moment, then mariners are at peril.

Q119 Julie Hilling: This IT system, though, is not yet in place.

Sir Alan Massey: The system that we are proposing to link together is largely in place. We are currently in a radio equipment replacement programme that will refurbish our key ICT systems, including radios. So we have the wherewithal now to build a more resilient system. It is now a question of procuring and fitting the linkages that will pull the MOCs to the centre piece and establish the day centres around them.

Q120 Julie Hilling: Are you then going to have a period of trial before you actually close the other places?

Sir Alan Massey: Yes.

Q121 Julie Hilling: But how long is that trial going to be?

Sir Alan Massey: The overall transition period provides for almost four years. Four years, up until 31 March 2015, is the time we have to establish the MOCs, trial them, bench test and then reality test the communication systems and the concepts of operation, the way that people work. Only at that point will we feel confident to start to collapse gradually, in a graceful degradation, the systems around them.

Q122 Julie Hilling: So these jobs will not go until that period.

Sir Alan Massey: The consultation document, assuming that this is what the model will be, sets out our estimation of when stations will either revert to day only operations or will close. You will see that it is stepped, with the majority happening in year three/four.

Q123 Julie Hilling: So in terms of any financial savings in this financial year you are saying that you won’t be making any financial savings.

Sir Alan Massey: No. We have declared that, and that is accepted. The first year in which we anticipate making savings is year four of the spending review.

Q124 Julie Hilling: But will you not have an increased spend during this period then?

Sir Alan Massey: That is all catered for within our overall budget. There will be investment but it is relatively modest, in truth. The amount of investment in ICT- communications infrastructure-is less than £10 million and that can be absorbed against all sorts of other offsets. So, effectively, we have a zero line for the first three years against this coastguard modernisation and then we start to make savings of about £7.5 million per year.

Q125 Paul Maynard: Forgive me for returning to the issue of local knowledge but the more I hear the more worried I become. My constituency is Blackpool North and Cleveleys. The bulk of people who get into difficulty off the Falmouth coast are pleasure craft, swimmers and people on lilos who float out to sea. When a distress call comes in, they are often not able to describe specifically their location; they have no GPS signal. Their location is established, as I understand it, by the coastguard asking them to describe what they can see. Therefore, local knowledge is essential to identify where that individual is. Are you seriously telling me that, by removing the local knowledge requirement, as you have just explained, somebody in an office in either Aberdeen or Southampton will have sufficient local knowledge that, if that individual were to describe what they could see, they will be able to locate that person within your 10-minute limit? Are you seriously telling me that that is still the case?

Sir Alan Massey: Could I perhaps put that in the context of the 1,000 miles of coastline that Stornoway looks after or the 300-odd-

Chair: No. We want an answer to Mr Maynard’s question, which relates to this area.

Sir Alan Massey: Can I guarantee? The answer is no. If I could guarantee, that would be fantastic. But let me just put it into a more relative context: at the moment, Stornoway coastguard looks after over 1,000 miles of coastline, and I defy anybody to say that somebody coming ashore in a kayak in some very remote place would be able to describe his position. So local knowledge is not absolute-

Q126 Paul Maynard: Sorry, just hang on. Stornoway does not have 10 million visitors a year; Blackpool does. Are you seriously telling me that Aberdeen will have greater local knowledge than Liverpool will on that stretch that they have been catering for?

Sir Alan Massey: I am not pretending that that is the case at all. I come back to Mr Naylor’s explanation that this is a combination of issues and we set it all in a relative context. I cannot guarantee it today.

Q127 Chair: Sir Alan, we have got all of those things, and the purpose of this meeting is to focus our questions on the points that concern us.

Sir Alan Massey: Yes, I understand.

Chair: We have read what you have got to say about the whole thing and we have certain concerns that we are putting to you. I think, Mr Maynard, we will move on from that for the moment, but clearly you have registered your concern there. We do have other issues as well to raise with you. The question of emergency towing vessels was raised by Mr Harris. Mr Baker, did you want to ask something on that?

Q128 Steve Baker: I will ask the question very quickly. What effect will the loss of Nimrod have on your operations, please?

Sir Alan Massey: Currently the Nimrod gives us extended air cover out to the very westerly extremity of our search and rescue region, which is about mid-Atlantic. I have nothing in my own inventory that can go that far, although I use Cessnas that are used for other purposes to do that. We can call at the moment on the oncall Ministry of Defence asset, which is currently a C-130, when it is available. But it is fair to say that with the demise of Nimrod we do not have the extent of search and rescue top cover that we had before.

Q129 Steve Baker: I am just conscious that Nimrod has search water radar; Hercules does not. Is that important to the coastguard or not?

Sir Alan Massey: It depends entirely on the scenario.

Q130 Steve Baker: How often do you get a scenario that needs surface radar?

Sir Alan Massey: I would have to check. I don’t know.

Q131 Mr Leech: Currently, the emergency towing vehicles go and help all kinds of ships.

Sir Alan Massey: Yes.

Mr Leech: I presume the majority of those will be insured; some of those perhaps are not insured. How much money is actually claimed back from the insurance companies of the vessels that are supported?

Sir Alan Massey: I would not limit it to insurance companies, but I understand the thrust of the question.

Mr Leech: Well, insurance companies or the shipping companies themselves.

Sir Alan Massey: Yes. Again, Mr Naylor has the detail, but in principle, if one of our tugs goes to provide a towage or salvage service to a ship, then it will inevitably result in an agreement between the tug and the ship owner and the setting up of a contract which will then result in a payment for that service. On the current contract, the Department for Transport or the MCA gets a small percentage of the net value of that contract at the end of the rendering of assistance.

Q132 Mr Leech: I can’t quite understand then why this service actually costs. With the costs that are got back, why does it not pay for itself?

Sir Alan Massey: Because, historically, we have never recovered, by that means, the full cost of providing the service in the first place. If I can give you an example, it is roughly a £10 million net annual cost of running the ETVs, against which, recently in one year, we received £80,000 back from this percentage of the net value of a towage contract. So there is quite a gap still.

Q133 Mr Leech: With respect, that is absolutely bonkers. Surely we should be ensuring that the work that is done by the emergency towing vehicles is being reimbursed from the shipping companies or their insurance companies. Why isn’t that happening?

Sir Alan Massey: I imagine it is rooted in the terms of the contract, which was clearly written some years ago. But the Government has taken us a step further now in the judgment that it is an incorrect use of taxpayers’ money to actually fund these ETVs in the first place. What we are seeking to establish now is some sort of arrangement or protocol whereby there will be commercial benefit for tug owners, for example, in stationing tugs in the sort of places that they are needed, on the basis that, yes, when they are called forward for a towage or salvage contract they are duly recompensed and it becomes commercially worth their while to do so.

Q134 Mr Leech: Why would it not have been possible just to ensure that the contract does make sure that it pays for itself?

Sir Alan Massey: Because, of course, in a perfect world you have no accidents at all-that could happen-and then we would never get recompense for the money that we have set forward as taxpayers.

Q135 Mr Leech: How many years in the last 100 years have there been no accidents and no requirement for any vehicles?

Sir Alan Massey: It is often not a question of there being no accidents. It is a question of whether your tug is in the right place at the right time. It is very interesting to note how very few times in the last few years the ETVs have been called forward for a real incident.

Q136 Mr Leech: If they had been called to incidents and they had been properly recompensed for the charges that they have incurred in doing their job, surely this could be done for no cost to MCA?

Sir Alan Massey: There are many dimensions to that question. I think Mrs Ketteridge can answer on the charging.

Sue Ketteridge: If I may. As has been discussed, the contract is about 10 years old. It is coming to the end. The contract provides that, if there is a commercial arrangement between the vessel being rescued and the ETV provider, then we do get a small percentage of that, but it is a commercial contract between those two parties, and I think it is about £300,000 to £400,000. It varies obviously because of the nature or the number of incidents where that applies. So it is about 15% that we would get back in that circumstance. In future-I think Sir Alan is absolutely right. It is about £10 million a year to provide that service. If you had maybe half a dozen or a dozen incidents where we provided a service and that arrangement were in place, you would be recovering at a hell of a rate-£1 million an incident if there were 10 incidents. It is clearly not plausible that we would be able to negotiate a contract that would enable that to take place. So, in future, as Sir Alan has mentioned, it has been decided by Government that it is more properly a strictly commercial arrangement between the insurer of the vessel or the owner of the vessel and a commercial provider. What we are looking to do, through the intervention that Mr Naylor has been leading, is to make sure that that capacity stays there in the market rather than being provided for by Government, therefore delivering a saving to Government.

Q137 Mr Leech: Can I just get this clear in my head? We pay private companies to be emergency towing vehicles, and to be oncall to be emergency towing vehicles, and then when they go out to jobs they get paid by the shipping company or the insurance company and only a small proportion of that money comes back to us.

Sue Ketteridge: In the event-

Chair: Is that right?

Sue Ketteridge: If I can confirm-

Chair: Is that correct?

Sue Ketteridge: I am just about to answer, Madam Chair. In the event that a separate commercial arrangement is entered into, because there will be any number of vessels that may be on the scene, then what you have outlined is absolutely correct. If, however, the ETV is there on our behalf carrying out our activity, there is no transactional arrangement that takes place.

Q138 Mr Leech: Can you just clarify what you mean by "if it’s there"? I was talking about in the event of the emergency towing vehicle being sent out by yourselves to a ship in trouble. In those circumstances they would just do what they needed to do.

Sue Ketteridge: They would do what they needed to do for our purposes, and if at the end of that-and I am afraid I will have to defer to Mr Naylor, obviously, as Director of Maritime-in the event, they have done whatever it is we need them to do, if there is a separate arrangement that is entered into, then that is very much a separate arrangement. But that does not take place until we have risk assessed whether or not that ETV can be released from our tasking.

Q139 Mr Leech: Would you accept that this is not a very good contract?

Sue Ketteridge: I think Government has accepted it is not a very good contract, which is why they are not renewing it.

Q140 Mr Leech: But would you also accept that if the contract was worded in a different way this could pay for itself through the insurance and shipping-

Sue Ketteridge: I think you are asking me to speculate, to be perfectly honest. I can’t speculate about a decision that hasn’t been taken.

Q141 Chair: Sir Alan, would you agree that this matter could be dealt with by a different contract?

Sir Alan Massey: I think we need to conclude the discussions with tug owners, ship owners and local communities to see what the best way ahead is, because your points are entirely cogent. At the nub of it is a system here that, if it could pay for itself, then why wouldn’t commercial tugs be interested in doing it? That would be a perfect solution for us because thereby we look around and see that the commercial interests are sorting out these sorts of issues, in the same way that we don’t have many Government recovery vehicles around the M25-it is a commercial arrangement.

Q142 Mr Leech: What happens, hypothetically, if there is a vessel in distress and there is no means of getting anyone from this vessel, there is no insurance or it is just a single vessel? There is no means of getting any money from the ship owner or anyone involved with the ship. Under a commercial arrangement, surely that would just sit there at the bottom of the sea or-

Sir Alan Massey: I don’t know. Could I perhaps ask Mr Naylor, with his experience?

Philip Naylor: Yes. I think your question is in relation to two parts. With regard to the first one, the vessel in distress, the first concern we would have as the Maritime and Coastguard Agency there is to save lives, to make sure that there was no loss of life on board.

The second question that then emerges of concern to us is to ensure that we prevent pollution from any oil on the vessel being spilled. To that extent, the emergency towage vessels have one purpose and one purpose alone, which is what was described by Captain Belton in his report, which is of the ETV principle, and that is that the only real purpose of an emergency towing vessel is to be able to get to a vessel which is at risk of being driven ashore by the wind, before it gets driven ashore-a disabled vessel. To that extent the ETV has a role to play, although, as has been described in other ways, it does rely upon that tug being in the right place at the right time to get to a disabled vessel.

From that point onwards the issue is one of preserving property or a salvage of property. Our concern is saving lives and preventing pollution, which is encapsulated in the strapline of the agency-"Safer Lives, Safer Ships, Cleaner Seas". But, for the purposes of salvage, salvage is a commercial matter between the owner, the insurers and cargo owners.

Q143 Mr Leech: But if there is nobody to pay for it, potentially it might not receive any assistance in a completely commercial environment?

Philip Naylor: For a vessel which is disabled at sea, it is inconceivable with the international regulations to do with port state control and certification that a vessel would not be insured, but in your hypothetical case then it is conceivable that there would be no assistance rendered to that vessel, yes.

Q144 Chair: What has the reaction been of the French authorities to the decision to withdraw the Dover emergency towing vehicle?

Sir Alan Massey: I have not been party to their specific responses. We have received-

Q145 Chair: Have they responded?

Sir Alan Massey: There was a response to the Department for Transport. I saw a copy of a letter.

Q146 Chair: Wouldn’t you expect to know what their response was, if this is under your responsibility?

Sir Alan Massey: The arrangement that we have with the French is that they share the cost of one of the tugs and we station it then for alternate weeks.

Q147 Chair: But wouldn’t you expect to know what the response of the French has been to this issue, because this is your responsibility?

Sir Alan Massey: The French have sought further clarification of what we are seeking to achieve.

Chair: So you do know something then.

Sir Alan Massey: Yes, but that’s not-

Q148 Chair: Would you like to tell us properly then what it says, not that you don’t know? Now you are saying they are seeking further clarification. What is it they are saying?

Sir Alan Massey: The one letter that I have seen requested further clarification of what the Government’s intentions are. It was a letter in French. I haven’t actually seen the translation. I don’t know if Mr Naylor has seen more on that.

Q149 Chair: I just want to know how the French have reacted. You said you didn’t know, then there is a letter, now you know something in it, now it is all in French and you might not know. What are the French saying beyond that they want further clarification? Is that all you actually know?

Sir Alan Massey: To my knowledge it is seeking further clarification. Mr Naylor may know more.

Q150 Chair: To your knowledge, okay. That is all right. I think that tells us enough. We have also been told that a risk assessment carried out in 2008 showed that the Dover emergency towing vehicle cannot be easily replaced by a private sector provision. Is that correct?

Sir Alan Massey: I have not seen that risk assessment.

Chair: You have not seen it?

Sir Alan Massey: I have not seen that risk assessment.

Q151 Chair: I find that most surprising, if you are planning to make a change and you have not seen it. Can you tell us then why you want to wind up the Maritime Incident Response Group?

Sir Alan Massey: What the Government have said with regard to the Maritime Incident Response Group-

Q152 Chair: The Government or you? Have the Government directed you to wind that up?

Sir Alan Massey: It was part of the spending review settlement and so it was announced by Ministers.

Q153 Chair: Have the Government directed you to wind that group up?

Sir Alan Massey: Yes. It was part of the spending review settlement.

Q154 Chair: But have the Government directed you to do that?

Sir Alan Massey: The Government have directed us to review the arrangements for the MIRG to see how it could be provided in the future at no cost to Government.

Q155 Chair: Are you satisfied that winding it up won’t pose a risk to life?

Sir Alan Massey: We are rather hoping that we won’t necessarily end up with the position where the capability is wound up. We are currently negotiating with the chief fire officers and the fire authorities to discover where there is room now for just changing the way things are done in order to preserve some measure of capability but within the overall remit that was set by the spending review.

Q156 Chair: Have you undertaken a risk assessment?

Sir Alan Massey: Could I pass that to Mr Naylor, who has been leading this?

Chair: Mr Naylor, has a risk assessment been undertaken on winding up the Maritime Incident Response Group where the fire service work with you?

Philip Naylor: No risk assessment has been conducted on winding up the MIRG.

Q157 Chair: From what Sir Alan says, I gather you are looking now not at winding it up but possibly at changing it.

Sir Alan Massey: We are currently at a stage where we now want to negotiate and consult directly with our partners and the partners of the 15 fire and rescue services that are committed to the MIRG at the moment. We haven’t yet gone directly to them, although we have been engaging with their spokesman for some time now. We are just at the cusp of beginning to discover what is the art of the possible here.

Q158 Chair: So that means you are actually discussing the situation with the parties involved.

Sir Alan Massey: We will be as soon as we have clearance to negotiate directly with all of them, bearing in mind-

Q159 Chair: Who do you need clearance from?

Sir Alan Massey: We have asked Ministers to agree that we can now engage with the local authorities who are responsible for the 15 fire and rescue services, because since some of them sit in devolved administrations we just have to be absolutely clear about doing it in the proper way.

Q160 Chair: So you are waiting for Ministers to give you approval to talk to the people who are running the service.

Sir Alan Massey: Yes, we have asked Ministers to simply approve that we now go from the position we have been at the moment, which is to speak with their spokesman, and to directly negotiate, because we have to be careful to get that process right.

Q161 Julie Hilling: I think it is very interesting you say "rather hoping". It seems to me that we are talking about emergency services here. So you are rather hoping that something will come out at the end of this. Would you like to talk a bit more about that, because that seems to me as not really very adequate?

Sir Alan Massey: Yes. Provision of fire fighting capability at sea is not a statutory requirement and we are unique, actually, among all of our labour nations in having something called the MIRG. The position we are in now is that there is no money available for MIRG on the basis that it has been set up at the moment. The money has been taken in spending review savings. What we need to do now is to see, based on what has already been invested in it in terms of equipment, techniques, procedures, concepts and training, whether there is some residual capability there that would be adequate for the purposes of saving life at sea. It is a moving target. We don’t quite know what the art of the possible might be, which is why I had to couch it in a word like "hope".

Q162 Julie Hilling: And if there isn’t, because we know there are cuts for land-based services and everything else, are you saying this is then just abandoned?

Sir Alan Massey: I can’t make that judgment. Ministers will have to make that judgment. At the moment we are exploring what the options might be.

Q163 Julie Hilling: But the Government have said, "This has got to go"?

Sir Alan Massey: No, the Government have actually said that there is no more money and we are now to review arrangements to see in what form some sort of provision could be sustained.

Q164 Julie Hilling: There is no more money so therefore the service has got to go.

Sir Alan Massey: It might not necessarily. That is exactly what we are trying to seek to understand.

Q165 Chair: Will you be approaching the chief fire officers before the end of this financial year?

Sir Alan Massey: Provided we get ministerial clearance to go forward, I would hope to be engaging with them-in fact we have a draft letter to send to them on the stocks now. So we are at a fairly advantaged stage of this, Madam Chair.

Q166 Mr Harris: Would it be fair to categorise your organisation as being fairly relaxed about the necessity to carry out risk assessments before you make radical changes to your services?

Sir Alan Massey: No.

Q167 Mr Harris: Yet on the coastguard reforms you did not see the need for a risk assessment. On the Maritime Incident Response Group it has been confirmed that there has been no risk assessment. Are there any circumstances you can foresee where you might carry out a risk assessment for any part of your service?

Sir Alan Massey: I go back to an earlier statement that I made-that risk assessing is what we do day by day. As an emergency responder, with safety as my number one priority, it is inconceivable that I would not be undergoing risk assessments about everything. A helicopter goes down here; the coastguard rescue team can’t muster because of illness there; there is a watch level manning where it shouldn’t be. We do it all the time, sir.

Q168 Mr Harris: But you don’t think a major change to the structure of your service warrants a risk assessment?

Sir Alan Massey: Explicit formal risk assessments that you would perhaps recognise as such from an HSE format is not something that we routinely do, but it is embedded into absolutely everything-

Q169 Mr Harris: No, not routinely. But then you don’t do this kind of thing routinely either?

Sir Alan Massey: No.

Q170 Mr Harris: But when you do a nonroutine radical reorganisation of your services that is not routine, that is not something you have to do every single day, the next time you come forward with proposals that people instinctively feel uneasy about, need to be convinced about and worry that people might die as a result of, do you not think that it might be worthwhile thinking about doing a risk assessment so that you can reassure those people?

Sir Alan Massey: Yes, and that is exactly what we did for the ETVs. We did a formal risk assessment and it is there.

Q171 Mr Harris: You did it for the ETVs, but you didn’t do it for the coastguards and you are not doing it for the Maritime Incident Response Group. Is that right?

Sir Alan Massey: On the coastguards, I think we explained that we did risk assessments at every stage. We looked at each potential evolution from the current state to the future. We looked at the current risks and we saw how the migration to the new system would mitigate those risks. So we have done that.

Q172 Mr Harris: You have done it but you haven’t actually published anything.

Sir Alan Massey: No, because publication of an explicit risk assessment is not something that I have been mandated to do, but I can understand there is an appetite for it, which is why we are publishing those two risk assessments this week.

Q173 Mr Harris: Why did you do the risk assessment on the emergency vehicles but not on the Maritime Incident Response Group?

Sir Alan Massey: Because we are not at that stage, I don’t think, yet.

Q174 Mr Harris: So you will be doing one then?

Sir Alan Massey: It depends what happens with our future negotiations. We will sit down with the fire and rescue service partners and they will undoubtedly come up with their view of how things are and what they perceive the risks to be. We will come up with ours and we will come to some sort of sense that when we formulate the options for Ministers to take their judgments on this will be embedded in it. It is the stage we always go through.

Mr Harris: Thank you.

Q175 Chair: I want to turn to search and rescue helicopters. A statement on the current position in relation to a private bidder was issued at 7 o’clock this morning and has been followed by a ministerial statement. What can you tell us about that situation and, specifically, what can you tell us about the state of search and rescue at the moment? Are you satisfied with the way it is operating currently and what can you tell us about the statement that was issued earlier this morning?

Sir Alan Massey: Madam Chairman, in regard to the former, this news has only just broken and it is far too early for us to state any sort of position. This is under review by Ministers and I have no position. On the second point, I am entirely satisfied with the quality of service that our search and rescue helicopters provide at the moment.

Q176 Paul Maynard: Are you satisfied therefore with the availability of figures for Sea King, which I gather are only 61% available, which seems rather low for such important equipment?

Sir Alan Massey: On the first point I am very satisfied with our own coastguard helicopters, which meet the service standards in every respect. In terms of the performance of the other aircraft, they are search and rescue partners with us, but that is really a matter for the UK Strategic Search and Rescue Committee.

Q177 Paul Maynard: So you have no views on the matter?

Sir Alan Massey: I am not entitled to a view.

Q178 Chair: But you might have one?

Sir Alan Massey: My view would be that I have yet to see, in my term of office, any indication or evidence of any failure to rescue people out of the sea by helicopters.

Q179 Chair: So you are fully satisfied with the way the service operates?

Sir Alan Massey: I am satisfied with where we are at the moment, Madam Chairman, yes, but I clearly listen to what the UK SAR Strategic Committee will be telling me. From my perspective and the operation that I use and the tasking of helicopters that falls to me and my staff, we are satisfied with the service that we have.

Q180 Chair: You don’t have any concerns about it?

Sir Alan Massey: I have no concerns today, but if you ask me a question that said how will things look in 2016 it might differ. We have to look at different factors.

Q181 Kwasi Kwarteng: I just wanted to see your position on what the general feeling is in terms of the Committee and the public at large. It seems to me that you are going into a position of unusual savings in terms of the financial situation. We have heard that you have, I would say, a haphazard approach to risk assessment. There are issues about concentrating or diminishing the number of outposts. Do you understand, with all of this, the kinds of concerns that people might have? Do you appreciate that?

Sir Alan Massey: I think I do, sir. I appreciate it slightly more acutely as a result of the sorts of messages that we have been receiving as a result of launching the consultation into coastguards. But if that means am I concerned and do I feel that we have gone down the wrong route, the answer to that is no, at the moment.

Q182 Chair: Have you had any confirmation of your capital budget?

Sir Alan Massey: No we haven’t, Madam Chair.

Q183 Chair: Do you know when you are going to be getting it?

Sir Alan Massey: I don’t know. Mrs Ketteridge may.

Q184 Chair: What particular concerns do you have?

Sue Ketteridge: First, I have absolutely no concerns over the level of capital budget. The fact that in the memorandum we submitted to the Committee had "TBC" for future years simply meant that the discussions with the Department over their internal allocation process had not concluded.

Q185 Chair: But what are the particular things you would be concerned about being cut back?

Sue Ketteridge: If I did not have a capital budget to meet the requirements for the Agency then I would be concerned, but that is not the case at the moment so I am not concerned.

Q186 Chair: You have not had any indications of what could happen?

Sue Ketteridge: No. The discussions I have had with the Department to date do not give me any cause for concern about whether or not we would be properly resourced in our capital budget to deliver the obligations upon us. Clearly the outcome of the consultation document may mean that we need a different profile or a different spread of capital investment, depending on what the outcome is, but I am absolutely satisfied and content that, once we know the answer to that and can articulate exactly what our requirements are, I will be in a position to have those discussions with the Department and I would trust they don’t put me in a position where I am trying to deliver that for that. But at the moment that is not the case.

Q187 Gavin Shuker: We have touched on a lot of different issues and areas today, but the clear thing that has come through is there have been significant cuts in what you can deliver. To what extent would you say that the work that you are doing and the reforms that you are doing are driven by cost pressures rather than restructuring?

Sir Alan Massey: That is an extraordinarily difficult question to answer. I would look at it in a slightly different way, alluding back to this business about the coastguard and modernisation. It has been in gestation for a while but it has taken the impetus of a requirement to find savings that has probably pushed us across the start line in a way that has not happened in previous administrations. So in that sense, and without being in any sense cynical, it is an opportunity. It is an opportunity to modernise.

Just on the point of savings, a really important additional observation is that we are not saving everything that we could save from doing this. In fact, part of the package that I have put forward is deliberately configured to allow for a recycling of cash into where it needs to be, which is the remuneration of our coastguards, who, in certain contexts, I think, have been underpaid for a long time for the job that they do. So it is not as if this is driven entirely by savings. This is driven by betterment.

Q188 Gavin Shuker: Isn’t the reality, though, that the Government have cut the amount of money coming to you by 22% and, as a result, regardless of whatever consultation goes on, you will be cutting back service?

Sir Alan Massey: We will but we are not unique in that sort of sense. This is right across Government.

Q189 Gavin Shuker: But, Sir Alan, you are unique in the sense that you are a safety agency in a sector where you are facing growing challenges, growing numbers of callouts, for example?

Sir Alan Massey: Yes, but I think that is the case for other Departments as well.

Q190 Gavin Shuker: You are comfortable with that position. You think you got a good settlement at 22%.

Sir Alan Massey: I have got a settlement which I think I can live with, I think I can deliver, and at the end of it, because of the way that we have been able to approach this, it will result in a better, safer, service.

Q191 Chair: Is there a tension between your role of attracting more ships to the UK flag at the same time as maintaining high standards? Is there any contradiction there?

Sir Alan Massey: No, on the contrary. Again, Mr Naylor is better placed to answer this, but from a strategic perspective it is a good thing for the UK to have a large, healthy ship register, because we do it on the basis of high-quality shipping. The higher the quality of shipping that we have and others have, the safer the seas are. But Mr Naylor perhaps knows a little more detail.

Philip Naylor: We do not see a tension, and this Government’s policy is one of encouraging a strong and sustainable maritime sector. One of the parts we play in that is to provide a high-quality flag for ships that want to register themselves in the UK. To that extent, we have a flag which has attracted growth over the last 10 years but has not attracted growth, certainly in recent years, at the expense of accepting substandard or inferior-quality ships on to the flag. We now have a very clear focus on attracting high-quality young ships from quality owners on to our flag.

Q192 Chair: Do you have any views on light dues?

Sir Alan Massey: Actually, no, I do not, Madam Chair. That is way outside my competence. It is a Department issue.

Chair: Thank you very much for coming and answering our questions.