UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 576-iii

HOUSE OF COMMONS

ORAL EVIDENCE

TAKEN BEFORE THE

DEFENCE COMMITTEE

FUTURE ARMY 2020

RT HON PHILIP HAMMOND MP and GENERAL SIR PETER WALL

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Defence Committee

on Tuesday 5 November 2013

Members present:

Mr James Arbuthnot (Chair)

Mr Julian Brazier

Mr Jeffrey M Donaldson

Mr James Gray

Mr Dai Havard

Mr Adam Holloway

Mrs Madeleine Moon

Sir Bob Russell

Bob Stewart

Ms Gisela Stuart

Derek Twigg

Examination of Witnesses

Witnesses: Rt Hon Philip Hammond MP, Secretary of State for Defence, and General Sir Peter Wall, Chief of the General Staff, gave evidence.

Q270 Chair: Secretary of State and CGS, welcome to the final evidence session of the Future Army 2020 inquiry. I would like to begin by asking a question that was asked to you, Secretary of State, several times during yesterday’s Defence questions: why was the system proposed of a move towards a heavier reliance on reserves? Why wasn’t the draw-down of Regulars made contingent on the recruitment of reserves?

Mr Hammond: First, I am very pleased to be here and to see Mr Gray taking his place on the Committee.

Mr Gray: So far; you might not be later on.

Mr Hammond: I am also pleased to be accompanied by General Sir Peter Wall, who is also very happy to be here, I am sure.

Chair, as you say, I was asked that question yesterday, and I addressed it in my response. We have available to us a fixed envelope of resources, and making the decision to proceed with the draw-down of Regular force numbers to the target of about 82,000 and to build the reserve over a period of five years allows us to take the dividend from the reduced size of the Regular force and invest in the recruitment, training and equipment provision of the reserve forces. Within the Army’s budget-the CGS may have something to add to this-it simply would not have been deliverable or sustainable to propose retaining a larger Regular force and investing in the build-up of reserve forces in the way we are now doing.

Q271 Chair: So you are taking the dividend without any certainty that you will be able to recruit the reserves.

Mr Hammond: We have been over this ground several times before in various forums. The number of trained reserves that we are targeting is significantly smaller than the number we have traditionally held in this country. We will have 30,000 trained Army reservists by 2018, which compares with 72,000 trained Army reservists as recently as 1990. It is a significantly lower proportion of our armed forces than our English-speaking allies typically expect to hold as reservists in their mix, and we are confident that we will be able to deliver it.

I recognise the line of questioning, but I am afraid that I do not see the logic of suggesting that we should hold the Regular forces that we have decided to draw down and restructure in their old configuration at their old numbers, rather than getting on with the job of reconfiguring them for their future role-a contingent posture, post 2014. I am sure the CGS can add more to that.

General Sir Peter Wall: I remember the genesis very clearly. It was a financially driven plan. We had to design a new structure that included the run-down of the 102,000 Regular Army to 82,000, which is pretty well advanced now, to follow a funding line that was driven by the austerity with which everybody is very familiar and that pervaded those times, in particular, perhaps slightly more than it does now, if we bear in mind that the economy seems to be picking up. It triggered the complete redesign of the Army.

In the discussion about Regulars and reserves, the conversation should include the future reliance on contractors for operations that are in steady state, because that is a very significant part of the equation. That is based not on conjecture, but on proven performance. You have seen it yourselves in Afghanistan. There are really three legs to the stool. Inevitably, over the period of the run-down of the Regular army, before the growth of the reserve from 20,000 to 30,000, the reconfiguration of the reserve and the integration of the reserve with the Regular Army and the contractor-based solution-there is an overlap there, so all that needs to be considered in its entirety-there will be a delta where we have fewer forces in the period between 2015 to 2017 than we will from 2018 onwards, but that is by design.

Also, that is set against a revised defence planning assumption for what we are going to be doing with our forces, particularly in terms of the potential for enduring operations, in the period immediately after we come out of Afghanistan and finish combat operation there at the end of next year. So this is all absolutely in accordance with a strategic design that flows through the National Security Strategy. It is certainly no surprise to us that we are doing it this way.

Q272 Ms Stuart: I am quite intrigued, because on the one hand, General Sir Peter Wall, you have confirmed what the Secretary of State had said at some stage-that the Army was now the right size in line with budgetary requirements-as you have just said that you have a financially driven plan, and there is a logic to the plan. I want to put an idea to you: if we now have greater reliance on reservists, there has to be an interest within the existing Army structure in making that plan work. Given human nature, why should the established Army have an interest in making a plan work that makes reservists even more important? It is not in their own institutional interest. To make that very specific, if you look at the organisations that used to do the recruiting when they did a good job, and compare that with the current structure, which does not seem to do quite as good a job, are you not facing a bit of an institutional flaw in your argument?

General Sir Peter Wall: I don’t think so. First of all, while there may well be some individuals who harbour the sentiment that you are describing, that is not how the Army works. We don’t have 82,000 people who just get up every day and decide what to do based on their own personal sentiment. That is really the reason why we have an Army with an ethos that is perhaps slightly different from other parts of society.

There is a leadership challenge, but the fact that these two things are distinctly different in time has made it very clear to the units that will exist in the adaptive force in the future construct that they should get on with it, and many of those units are moving to that posture as we speak and have established their partnership with their reservist counterparts in the adaptive force. Getting on with it is what people do when they are given a clear-cut plan and the right sort of leadership and motivation. Anybody who is malingering out of resentment will be rooted out, as you would expect.

Mr Hammond: It is also quite important that this is not business as usual for the Regular Army while we are doing something different with the reserves; change is going on throughout the Army with the move to an integrated Army, and the restructuring of the Regular Army as well as of the reserves. There is a lot of change going on. The message is that this is, in future, a single, integrated Army. Is it a challenge to get that message across and to get people thinking like that? Of course it is but, as the CGS has said, it is a challenge the Army is delivering on.

General Sir Peter Wall: We should also be open that when we were told what would be the size of the future Regular Army and what would be the size of the reserve, the Houghton commission’s recommendations having been taken into account, it was we, the Army, who decided to integrate this thing the way we have. That was a conscious, internal strategy, because it is the only way we will get the competence at a collective level from the future reserve that we need to deliver the overall capacities and capabilities that we will require in the future. So it is a starkly different model from anything we have done in recent history.

Q273 Ms Stuart: What I am trying to suggest to you-some of my colleagues may want to test this in a little more detail-is that the existing Army has every interest in not making the reservist model work.

General Sir Peter Wall: May I just disagree with that entirely and explain why?

Q274 Ms Stuart: Let me give you a very practical question. What proportion of initial applicants have completed phase 2 training over the last year?

General Sir Peter Wall: There will be, by the end of this calendar year, up to 1,000 people who have completed phase 2 training. It might be just short of that, depending on failure rates over the next two or three months.

Mr Hammond: But they won’t have been applicants within the calendar year as it takes much longer to get through.

Q275 Ms Stuart: A thousand means nothing. If it is 1,000 out of 100,000, that is minimal. I want to know the proportion.

General Sir Peter Wall: There will be very few people who will, in the same year that they applied, complete phase 2 training. There will be some but, for the majority, it is a two-year journey because of the way our training model is structured for the reserve.

Q276 Ms Stuart: Would you like to go back and write to me with more detail?

Mr Hammond: I think you are asking a different question. You are asking a question about conversion rates from initial application to the completion of phase 2 training.

Q277 Ms Stuart: No, what I am trying to get at-again, some of my colleagues may want to come back on this-is that you have an enormously ambitious programme that means you have an Army that can no longer function unless it has the reserve forces as a component.

Mr Hammond: No, I reject that. The situation as I understand it-the CGS can add to this-is that in order to support an enduring operation in future, we will be more dependent on reserves than in the past. This debate has been conducted in terms of the austerity agenda and the need for fiscal discipline. However, for a country that expects to be at peace, it makes sense to me to hold capabilities that you will need only in an extended, enduring operation in a reserve force. It does not make sense fiscally or militarily to hold those capabilities in a Regular force when you do not expect to need to use them on a regular basis. That is simple good discipline.

Ms Stuart: I am not challenging that at the moment; I am challenging whether the structure you have put in place will make it practically capable.

Q278 Sir Bob Russell: Secretary of State, General Sir Peter Wall could not have been clearer: this is a financially driven plan, and the military have to work out a military answer to a financially driven agenda. We are here as a three-legged stool-Regulars, reservists and contractors. If it is correct that the recruitment of reservists is a very ambitious target and is not going according to plan, would it not be in the national defence interest to be prudent and to retain at least some of the battalions with which you wish to dispense? Wouldn’t it be prudent just to hold those numbers in real reserve?

Mr Hammond: No, I don’t think so. I don’t think it would ever be prudent to proceed on an unsustainable budgetary basis. What you would be suggesting is to proceed with a model that could not be financed; I don’t think that would be sensible. Critical to understanding this argument is the fact that we are not simply replacing Regulars with reservists. It is not about getting rid of Regular infantrymen and replacing them with reserve infantrymen; it is about changing the shape of the force so that more of the supporting capabilities are held in the reserves. Because of the nature of the Army’s structure in the future, we will have different types of capability in the reserve and Regulars. It is not as simple as you suggest.

Q279 Sir Bob Russell: It may be that the Prime Minister is not on the same wavelength as you, because if you check Hansard, when I put a question to him, he explained that by reducing the number of Regulars and replacing them with reservists, the Army would be basically the same size as now. I think that the Prime Minister needs to be briefed around the Cabinet table.

Mr Hammond: Not at all. There is a difference between saying that the Army will be the same size and that it will have the same structure. The capabilities held in the reserves will change.

General Sir Peter Wall: I come back to my point on the balancing piece being how we will use contractors for logistic support in an enduring context. That is a proven concept and one on which we are probably behind other armies in an expeditionary context, particularly the Americans. Frankly, I would rather we continued with our plan in which, as the Secretary of State says, we have a balance between what we spend on manpower and improving equipment position, the amount we can train the force of the size it is designed to be, and then all the sustainability that is vital to making this instrument useful-whether in a short-term intervention context, or an enduring operation, no matter how unlikely that might be in the future. Just to hang on to more manpower when you have not got the balance across the rest of the equation does not help us.

Q280 Sir Bob Russell: Secretary of State, should the recruitment of reservists not meet the target, is there a contingency plan? Is there a point when you will need to review your strategy?

Mr Hammond: Whatever we do in the future, we will have to operate within the budgetary constraints we face. We are confident that we will meet the reserve recruiting targets, but if we found that we were not building the reserve force at the rate that was required, the Army would clearly have to review how it utilised the components of force that it had available in a way that delivered the military effect we require.

Chair: That was an interesting answer.

Mr Hammond: It is self-evidently true, isn’t it?

Q281 Chair: So the Army would not set out to take steps to rebuild the Regulars if the reserves-

Mr Hammond: Chairman, I do not understand what is so challenging about the proposition that there is a finite budget. It is not about setting out to take steps to employ more people and buy more stuff. We have a limited budget and we have to work within it. We do not have an option of going back to a construct that we have moved away from to build a sustainable force for the future within the budget envelope that we have.

Q282 Chair: Okay. CGS, in relation to an answer you just gave, when you were told what would be the size of the Regular Army and what would be the size of the reserves, who told you what the size of the Regular Army would be, and who told you what the size of the reserves would be?

General Sir Peter Wall: I was told the size of the Regular Army by the permanent secretary. The size of the reserve came out of the findings of the Houghton commission.

Q283 Mr Brazier: CGS, nobody could possibly doubt the extent to which you are personally committed to making this work. The fact that, within a week or two of embracing it, you had appointed a two star to ensure that the reserves had a voice in the process, as well as getting things moving on the employer front, is just a small part of the evidence.

Talking to people across a range of units, one hears a lot about bits of the process that are going well, but the feedback on recruiting is all negative-not for reasons that have anything to do with application numbers. May I bounce a few specifics off you? First, why is it that recruiting offices, which are not just places for footfall, but some of the key portals to access the system, are open 9 to 5 on Monday to Friday, rather than, say, doing three days from 9 to 9 so that people with civilian jobs can come in? That is one example-let me give you two more.

Secondly, security checks. You might have a guy all excited who has done the initial aptitude weekend, with a bunch of mates, but if you say to him, "It’s going to take six or maybe eight weeks to do a security check on you, and then come back," does that not break it up? Thirdly, there is the wider point that the RFCA ran the process very well until seven years ago. Is the Army Recruiting Group really the right body to do this? Nobody I speak to thinks that it really gets the reserve bit.

General Sir Peter Wall: I am not sure how up to date you are with the new system, or whether you have had a chance to visit the apparatus that is now set up-

Mr Brazier: I would love to do so.

General Sir Peter Wall: -because I think you will find that trying to hark back to a bygone era is not the way to go forward in this regard. The people we want to encourage to join the reserve are not people who are going to learn about it by walking down the high street and into a shop, whether it is open during or after working hours. They are going to do all of it on digital media. That is why we have embraced a partnership with Capita and it is why we are going down that track for recruiting both Regulars and reserves. In so doing, we have been able to reduce the number of soldiers doing back-office functions. Soldiers are still doing front-office functions in terms of contact with these people, which is of course very important to develop their enthusiasm once they have made initial contact.

I am not suggesting for one minute that our attract, enlist and feed in to initial training pipeline is working nearly as smoothly as I would like, but if you came down-perhaps the Committee would like to visit-you would get a sense of just how much momentum there is behind this and how determined people are, in concert with our commercial partners, to make it work, and I am confident that it will.

Q284 Mr Brazier: But the comment that constantly comes back about online recruiting is that you have a batch of recruits who you would like to start training together, because you then get all the ties that follow through the weekend process and so on, but you find that one guy has been lost because he did not fill in one of the 50 fields correctly and the machine did not tell him, that the next guy got stuck on the security check, and that somebody else has had a problem with the medical-not failing it, but because something has gone wrong with the paperwork. It goes on and on.

General Sir Peter Wall: You will no doubt have lots of stories of that ilk, which are in stark contrast to the experience the majority are having. I do not believe that we would have a hope of getting to the numbers we need in the fullness of time if we were to go back to the retrograde systems that we had hitherto. That required far too much time and effort for people we need to be involved in more productive outcomes. This is a business of raw numbers in one sense, but it is also about producing collective capability. That is the really significant delta between the past and the future. We have to ensure that we do not devote nearly all our effort to existing by having a cumbersome recruiting system. We must streamline it so that the military talent can be used to enhance its capability. We are in the foothills of that plan.

Mr Hammond: I acknowledged during yesterday’s Defence questions that there were some IT teething troubles at the start of this programme. A lot of attention is going into this issue, and where there are things that we can do to ameliorate problems being created by IT start-up problems, we will do them. I went to the Army recruiting centre last Wednesday and heard of a range of initiatives and pilots that are being tried out right now to overcome some of the specific problems that you have mentioned and that other people have mentioned to me over the past few weeks.

Q285 Mr Brazier: A last point: there is still one organisation left-admittedly it has huge advantages-that does a one-stop weekend, and that is the OTC. It works brilliantly there. We could get back to a one-stop shop, with the other things being picked up in slow time-whether security checks or whatever.

General Sir Peter Wall: We have a plan to import some of that experience with a modified initial joining standard, such that we are not putting people at risk. That idea is a good one and it is being embraced.

Q286 Mr Holloway: General, I will not bore you with anecdotes, but there really does seem to have been a problem, certainly hitherto. A godchild of mine was delayed by six weeks, I think, because she could not take some attested papers to a recruiting office on a Saturday. I had a guy in my office yesterday-a captain who is being made redundant by the Army as we speak-who said that he and his mates who were leaving were not going to bother going to the TA because it was being made so difficult for them. I do not know what was behind his comment, but I think there is a problem.

General Sir Peter Wall: We are actually exceeding by some margin our initial expectation of conversions from the regular Army into the reserve, which is an important part of delivering this uplift in competence in the short term.

Mr Holloway: I am not criticising; I am just saying that there are plenty of anecdotes out there and they seem to be believable.

Q287 Ms Stuart: In a previous evidence session, Secretary of State, I asked you to complete a sentence. Having listened to the evidence about the right size, the budget, and who told you what, I said to you, "What do you think the Army is for?" I thought that the Army was primarily for defence of the realm. At what stage would the needs of the defence of the realm make you think that you ought to look at the budgetary requirements again?

Mr Hammond: If you are asking in what circumstances I would be arguing for an increase in the defence budget, that is really a question for a Strategic Defence and Security Review, of which there will be one in 2015 looking at the overall picture of what we require our armed forces to do and what resource envelope the taxpayer is prepared to commit to doing that. For the time being, based on the 2010 SDSR, we have a very clear remit. We know what the role and the requirement is and we know what capabilities we have to deliver in Future Force 2020, and the CGS and the other Service Chiefs are constructing a force structure that will allow them to deliver that capability on a sustainable basis within the budget envelopes that they have been given. That is absolutely the right way to go about it.

If I may say so, I think the experience of the recent past is that there is no mileage in dreaming of a force structure that cannot be properly supported by the available budgets. That has created only chaos and dislocation. We have to operate on a sustainable basis so that people have confidence about the future and confidence that they will be properly equipped and trained to carry out the task that they are being asked to do.

Ms Stuart: I will not push this, but I leave you with one thought. I do not dream of anything, but I occasionally fear that the enemy of the realm may not be working to the same timetable as you do. Let us hope that I am wrong and you are right.

Q288 Derek Twigg: CGS, when the permanent secretary told you what the size of the Army would be, how did you feel?

General Sir Peter Wall: Well, I have moved on from there now.

Q289 Derek Twigg: That was not the question. I asked you a specific question. How did you feel?

General Sir Peter Wall: I thought it was going to be a bit of a challenge to galvanise the Army into getting on with the job of shrinking and rebuilding, so I was not thrilled to bits, to start with, but we set up a design team, basically. We got approval from the permanent secretary to bow out of the detail of the programming round because we did not know what structure we were trying to do our financial calculus against-

Derek Twigg: Sorry, could you repeat that? I did not understand.

General Sir Peter Wall: We bowed out of the detail of the programming round in the ensuing year because we were essentially engaged in a design-to-cost exercise.

Q290 Derek Twigg: So you lost a year.

General Sir Peter Wall: No, we did not lose a year; we just did not do the unnecessary work of trying to programme in financial detail a structure that we had not yet designed. We were allowed to take a reasonably long-term, systematic view of how to interpret the National Security Strategy and pull together the two components-the Regular and the reserve-into what we decided should be an integrated structure. We did that in the context of the three distinct roles for the Army that came out of the National Security Strategy: a contingent capability to deliver conventional deterrence and defence; the defence engagement proposition with upstream capacity building and building bilateral relationships with regional partners; and UK resilience operations in the homeland.

What I am really saying is that after a bit of a shock, we were afforded the time to do a really thorough and systematic job, taking account of a lot of campaign lessons from Afghanistan, and experimentation and modelling, and with DSTL support to ensure that what we were doing was consistent with defence planning assumptions. What we put to the Secretary of State the following June, for announcement in July, was the product of a year’s work. It was not, as tended to be the case in the previous couple of years, a series of three or four-month exercises conducted in haste.

Q291 Derek Twigg: After being told by the permanent secretary, did you make any representations to the Secretary of State to ask him to review that decision?

General Sir Peter Wall: No, I was keen to ensure that what I was going to be telling the Army-the implications of those big bits of news-was consistent with what the Secretary of State and the Prime Minister thought would be the news to the country. That is to say that there should be a single version of the actuality, in terms of how many Regular units and cap badges might be affected, and the extent to which we could or could not, subject to further work, offset some of the implications of reducing the Regular structure with a more tutored use of a competent reserve-all that sort of stuff.

Q292 Derek Twigg: That was not the question. I asked whether you made any representations to the Secretary of State in opposition to what you had been told by the permanent secretary. Given that you said you were in shock, are you saying you made no representations to the Secretary of State?

Mr Hammond: Just to be clear, I was not Secretary of State at that time.

Derek Twigg: No, but you are Secretary of State at the moment. Don’t worry; I will blame you only for the things you are responsible for.

General Sir Peter Wall: This was not an utter surprise. The proposition had been floating around-

Q293 Derek Twigg: You were in shock, General.

General Sir Peter Wall: How do you want to do this?

Q294 Derek Twigg: I would like you to answer the question.

General Sir Peter Wall: Okay. Starting now?

Derek Twigg: Yes.

General Sir Peter Wall: Okay-

Derek Twigg: Try again; yes, that would be good.

General Sir Peter Wall: All right. Shall we just go through the question again?

Q295 Derek Twigg: You want me to ask the question again: what representations did you make to the then Secretary of State after you got over the shock about the cuts to the Army?

General Sir Peter Wall: I didn’t make a representation.

Q296 Derek Twigg: You made no representations whatsoever.

General Sir Peter Wall: No.

Q297 Derek Twigg: Not a single word.

General Sir Peter Wall: No.

Derek Twigg: Okay. Can I come to you, Secretary of State-

General Sir Peter Wall: And what was the point of that question?

Q298 Derek Twigg: I am asking the questions, General.

Secretary of State, could you tell me, please, in terms of the comments you made about living within the financial envelope, what the gap was between what the senior officers said they required in the representations they must have made to you and what you gave them?

Mr Hammond: Sorry, when you say-

Derek Twigg: They must have put to you what they required as part of the discussions on the future defence needs of this country, and you gave them an envelope to work within.

Mr Hammond: I think the situation that I inherited was that the 82,000 Army had already been agreed, and the Army was in the process of putting together a restructuring plan to deliver within that 82,000. The 82,000 was already a planning assumption within the Department and the Army by the time I arrived.

Q299 Derek Twigg: We just heard from the CGS that he was in shock when he was told the size of the Army by the permanent secretary, so the Army must have made some representations to you or your predecessor about what resources it would like.

Mr Hammond: I cannot comment about what representations may have been made to my predecessor.

General Sir Peter Wall: I had better fill in the gaps. The idea of an Army that was to be reduced to 82,000 Regulars had been floating around in the Department all the way through the defence review process. We thought we had marshalled sufficiently strong arguments to explain why, as an extrapolation of the way we were doing business then, that was not something we thought was going to be very easy to cope with. The shock was that those arguments did not carry. We have, of course, been through all this in my previous evidence, when I sat here for two hours going through these points, to which no doubt you can refer.

Mr Hammond: May I make another point, Chairman? I am not trying to change the subject, but this is important for context, and I have said it a couple of times recently in speeches. The number of people in the Army is essentially an input measure. What we really need to focus on is delivering the military effect that is required. Wages in any normal functioning economy rise faster than the GDP deflator at which we can expect our budget to increase. Roughly 30% of our budget goes on military wages. We have to improve our productivity. In other words, we have to improve the amount of military capability that we can deliver with a given set of inputs. One of the things that has been done in restructuring the Army is to look at using contractors, reservists-when they can be used to support enduring operations and we do not need to have the standing capability in the Regular Army-and civilians, when they can do jobs that have hitherto been done by military personnel. Civilians, contractors and reservists are all cheaper than Regular Army personnel, and if we are to deliver military effect within a constrained budget, it is absolutely incumbent on all of us to do it in the most productive way possible and to get the maximum military effect out of the budgets that are available to us. The challenge is not whether the Regular Army has to reduce in size in response to fiscal circumstances, but how we can then intelligently restructure the Army in a way that allows us to deliver a smaller cut in military output than the cut we have seen in resource inputs. Credit to the Army; that is exactly what it has done.

Q300 Chair: That is a point well made, but one of the concerns that has been expressed on the Army Rumour Service website is that 82,000 is not the end of it and it could go to 60,000. If the permanent secretary had come to you, CGS, and said, "It is not going to be 82,000; it’s going to be 60,000," would you have reacted in exactly the same way?

General Sir Peter Wall: That would not have been a feasible way of achieving the defence planning assumptions that underpin the work we had done.

Q301 Chair: Whereas you thought that 82,000 was.

General Sir Peter Wall: I wasn’t happy with it but, going back to the Secretary of State’s point-I wouldn’t want you to take too much long-term comfort from this-in the situation that we have been in the last two or three years, necessity has been the mother of invention. We have come up with a way of integrating this force-Regular, reserve, contractors, civil servants and so on-in a way that I think is going to give us a way of minimising the delta, in capability terms, at probably 10% rather than the 20% that is implied in the manpower reduction from 100,000 to 80,000. There are some places where, of course, we would like a little more resilience, but everybody would say that, no matter what their force structure is.

Q302 Mr Holloway: To take the Secretary of State’s point further, would it be fair to say that the generals realised that with these astronomical levels of debt, you have to cut your cloth to go with it? We are already doubling the national debt in this Parliament.

Mr Hammond: I think two things. First, however much all the senior military officers that I have dealt with since I have been in this job wish to discuss-or protest about, even-a specific issue, they do get the context in which we have to deal with this. They absolutely understand it. They also have a specific focus on this. They have seen the consequence of defence living in a budgetary hiatus, where nothing had any meaning any more because the numbers didn’t add up. Nobody had any expectation that the budgets or the programmes would be delivered. We have all seen over the past couple of years that, by operating in an environment where budgets mean something and are adhered to, and programmes are by and large delivered as they are meant to be delivered, there is actually a much more sensible planning environment and you can get much more out for the resource that goes in. An awful lot of waste was generated by the uncertainty and inefficiency in the old system of over-programming and under-budgeting.

Q303 Mrs Moon: Secretary of State, may I take you back to the issue of national security? That is what drives all our questions, along with the fact that we do not perhaps have your confidence that national security will be protected while these changes are being implemented.

You said that what would not be happening was one infantryman out and one reservist in, as that was not what you were looking for, and that instead you were looking for support capability that could be held in reserve, which would often be specialists. Have the recruiting agencies looking for reservists been given specific targets-perhaps for medical staff or the cyber-warriors, as I think you called them? Have the agencies been told what specialist capability to look for, or are they looking for general overall infantry? What are we actually looking to recruit?

Mr Hammond: I am going to ask the CGS to answer the detailed question, but you mentioned the two areas of medical and cyber. In medical, of course, we already have an excellent relationship with the NHS and our medical reservists play a hugely important role in our deployable capability. I can also tell the Committee that the response to the call for cyber-reservists has been very substantial. We have had more than 800 applications to join the cyber-reserve in the couple of weeks since that call was made.

In terms of specialisms, the Army, of course, expects to provide training. It is not necessarily looking for recruits who have these skills already. It is a big trainer in trade skills-in fact, I think that the Army is the largest provider of apprenticeships in the country.

General Sir Peter Wall: That’s true.

Mr Hammond: I will ask the CGS to answer the specific questions around specialisms and trade skills.

General Sir Peter Wall: We are absolutely trying to recruit to a force structure that covers the range of disciplines that the reserve force as a whole is required to produce. Those disciplines are done geographically around the country in reserve regiments and battalions that may have two or three outposts-company-level drill halls, those sorts of things-so the real trick here is to match the trades with the reservists who are interested in joining, in proximity to the unit in the area where they are living. Some of the organisations-particularly cyber, and some of the communications capabilities, and perhaps the intelligence capability-are organised on a national basis, but most of the 70-plus regiments in the reserve have a geographical locus, and the particular trade skills that go with that cap badge or function are the people they are trying to recruit.

Within each of those, there will be a miscellany of trades. That could be driving or being a sapper, an IED expert or a communicator in the case of the Royal Engineers; if you are in the Royal Artillery there will be another range of skills associated with that pastime. We have a bit of mosaic to populate, but people are absolutely going out to do it in a specific way rather than saying, "Let’s get 30,000 people and then work out what we are going to do with them." I know no one had suggested that; it is just the other extreme.

When you look at this in the abstract at the national level, it can feel a bit complicated and daunting. When it is delegated down and enacted at the local level-and after all, the Territorial Army is a localised phenomenon, and the reserve is an extrapolation of that-you will be down in a particular district of the country, where they will know what the employer base is and which units they have to populate. They will also be paired with a Regular unit with the same professional functions and trades in a reasonably localised context-it is not as geographically close as we might like, but it is the best that we can make it. Then it starts to become a much more personalised, localised and specific proposition to link the individual reservist with the unit and the employer.

I recognise that a lot of people join the reserve in order to do something different from the skill that they use in their workplace. Of course, in some of the areas where the reserve can contribute the most, we will be very interested in getting people who sustain their proficiency in their day job, and can extrapolate that into the reserve space. When you start applying those skills in a military context, where there might be a bit of pressure or the conditions are adverse, that of course adds to the feedback benefit in terms of the experience which that individual then takes back to his or her company. That is where the benefit starts to accrue for the employer. In addition, as these people move through the ranks, they will get command and leadership training, which must be of general benefit, first to an employer and secondly across society.

Mr Hammond: Chair, may I just correct the record? I said that I thought that there had been 800 applications to serve in the reserves in the first month. There were actually 800 expressions of interest in the first month.

Q304 Mrs Moon: So we still potentially need over 29,000 reservists. Could I have an assurance from the Secretary of State that he will constantly review the impact on the defence of the realm and not wait for the next SDSR? Will he constantly review the impact on the defence of the realm of our draw-down and our reduction in standing capability, while we are still not recruiting their replacement as reservists? I would like an assurance that that will not be something that you put off until the next review, but something that you look at constantly.

Mr Hammond: It will be looked at constantly, and it will take this form. There are a number of tasks and capabilities which the military is required to deliver. If at any point any of the service commanders was in a position where they felt that they could not deliver those outputs, they would flag that to the Defence Board through the Armed Forces Committee, so we have a mechanism for doing that.

Q305 Mrs Moon: And are you confident that people would feel capable of doing so; that they would not be in so much shock that they would not actually come forward?

Mr Hammond: Perhaps you should ask the CGS to speak on behalf of the military commanders. How would they react to such a situation?

General Sir Peter Wall: We have a set menu of potential tasks at a projected scale, and of course they are not just about numbers of people. It is about capability, the ability to train effectively and to have the right sorts of logistic support structures, and so on. This includes-where we need it-the ability to draw contractors into the plan. We report quarterly to the Defence Board on our ability to meet those tasks, so this is under continual review.

Q306 Mr Gray: Linked to that, yesterday in Defence questions, Secretary of State, you indicated that you would issue a series of targets for the recruitment of the reserves. When will those targets be produced?

Mr Hammond: I originally said in the autumn. I said today that I hoped it would be very soon. I do not want to pre-empt what the numbers will be, but they will be accompanied by a narrative explaining why they are set in the way they are.

Q307 Mr Gray: So will we set numbers: by February 2014, we will aim to have recruited x number? Is that the scheme?

Mr Hammond: We are going to look at recruiting, as well as numbers in the trained reserve, because of course the two are not the same but one is a leading indicator of the other. I think both numbers will be of interest to the House.

Q308 Mr Gray: Is the achievement or non-achievement of those targets scrutinised by the House, by an independent organisation or by whom?

Mr Hammond: They will be published quarterly by the Defence Analytical Services Agency. This is a new data series; we have not previously published recruiting data. It will be published on 14 November for the first three quarters of 2013, and thereafter it will be published quarterly. So it will be available for scrutiny by the House and external commentators.

Q309 Mr Gray: What happens if the actuality completely differs from the figure in the target?

Mr Hammond: If there is a persistent significant discrepancy, clearly the plan will have to be revised. The plan will not be delivering. However, I would not like the Committee to get the impression that there is a single set of possibilities for delivering this target output. There are many strands to the recruiting programme. The CGS and I have discussed with each other and with many other people the things that we might introduce if we find that elements of the current plan are not delivering what we expect them to deliver.

There will be pilots of different approaches to see what works and what does not work. The introduction of Capita as our recruiting partner will deliver us far more analysis of the process. Because of the commercial environment in which it operates, it is used to analysing the results delivered by different approaches. We do not have, in the Department at the moment, what I would call "proper data" showing what the response to difference types of marketing approach and pitch to potential recruits is. We do not know what we are good at doing, or what we are not good at doing.

Q310 Mr Gray: I accept those complexities, but leaving aside the management complexities of the kind you describe, which could be used to disguise the reality, if you are not achieving the targets that you set out, will you undertake to be straightforward about that and lay out what the change in plan will be as a result of that? The risk is that you will come back in February or March next year, or next autumn-whenever it might be-and say, "Well, if you look at it this way, we can argue" and you can spin it, fiddle around with it and produce a management-speak answer that seems to demonstrate that all is okay.

Mr Hammond: I do not see how I can be more straightforward than committing to publish the raw data on recruitment numbers on a quarterly basis, something that has never been done before. I assure you that from the Secretary of State, Ministers, Chief of the General Staff, Chief of the Defence Staff and all the way down, there is a huge amount of focus on this issue. We will publish quarterly data, but I assure you that we scrutinise weekly reports of recruiting numbers.

Q311 Chair: And when you say that you would have to revise the plan if it were not achieving the recruitment that you need, might that include a change to the incentives for reservists and/or employers?

Mr Hammond: It could certainly do that.

General Sir Peter Wall: We are three months into a five-year campaign, so the pessimism that pervades this line of questioning is a bit difficult to relate to. We are taking a campaign approach to this. For reasons that we could go into in detail, we are aware that we have not got off to the best start in terms of our IT solution-this is very much a digitally-based approach-but that is being remedied as fast as we can sort it out.

There are plenty of hardish financial levers and, on the other hand, engagement-type levers with the community and employers that we are working our way through. We do not have the bandwidth-I do not think that any organisation would-to do all this in one go, starting everything on day nought. Essentially, we are rolling out a succession of ideas. Having got the big idea out there, we are now looking at a number of niche approaches where we think we can enhance our prospects of growing this fairly rapidly, and that is what we are doing.

Q312 Chair: CGS, when you talk about the pessimism that pervades these questions, that is based on the experience to date, which I think you will accept; the fact that we are doing something that this country has never done before, which I think you will also accept, and reducing the Regular Army to a size that it has not been probably since Cromwellian times, and I think you will accept that, too. It is, I think, the role of the Committee to ask, "What happens if these rather extraordinary things go wrong?" is it not?

General Sir Peter Wall: I understand that, but, as the Secretary of State pointed out earlier, in recent memory we have had a much more significant reserve force than we aspire to grow in this period. I accept that there are some other differences: levels of competence expected of an individual and collective basis for discretionary operations, which is a rather different phenomenon from a war of national survival like the cold war. So the risk equation is slightly different. I am not suggesting it is like for like. In terms of the sheer size of it, we have been there before-for most of the lives of the people in this room.

Chair: Yes, and it is also very reassuring to hear the Secretary of State say that we are a country that expects to be at peace. Expectations can sometimes be dashed.

Q313 Bob Stewart: Secretary of State and CGS, we visited Afghanistan last week. The soldiers I spoke to had high morale-I think everyone would agree with that-even in my old regiment when they saw me. However the Army Rumour Service says there is low morale in various pockets of the Army, principally, I suspect, those people who are not in combat because combat automatically raises morale. May I ask both of you how you assess the state of morale at the moment in the Army, perhaps in various patches of it? We know the answer in Afghanistan. It is high. But for the rest of the people contemplating the future, how do you assess morale at the moment? We all know it is crucial.

General Sir Peter Wall: I think there are some people who are fearful of uncertainty. If they have not left the Army they might have seen some of their close pals doing so either voluntarily or through enforced redundancy; they are seeing changes to their regimental structure and that generates more uncertainty, and they have had their pay and allowances marking time if not diminishing in real terms. All organisations find uncertainty coupled with complex change a bit of a challenge. But if we look at morale, not through the lens of whether people are happy but whether they are committed to carrying on serving, our outflow rate suggests that the situation is about normal. If you then judge morale in operational terms by the extent to which people are prepared to turn to and do what is asked of them in a crisis, I can guarantee that we have absolutely no problem. What your saw in Afghanistan would be a clear and present manifestation.

The gradual progression of the announcement of our Army 2020 plan and the underpinning detail that goes with it is allowing that uncertainty to be progressively shaded out and for people to understand more clearly what the nature of future service in the Army 2020 structure, primarily back here in the UK by 2018 or 2019, will entail. A number of aspects of that are enhancing morale. There is certainty about where people will be based, given that they know what regiment they are serving in and the implications for their families of where they might want to live, send their children to school and so on and so forth. Against the uncertainty and the morale impact of that, we have clarity rolling out slowly, which gives me the confidence that we will end up in a good place.

There are, inevitably, some people who would rather the change happened faster. We need to take particular care of the diminishing rump of forces left in Germany, who have tended to be very well provided for in the past, to make sure that we sustain that quality of life for them until such time as their units move back in the 2017-2018 time frame. The things that will have a big impact there are obviously the extent to which the soldiers can engage in challenging, meaningful and relevant training that points to the future use of the Army. Just as important are things like the health care and education systems, which, obviously, we have to sustain right up to the last person.

Q314 Mr Havard: Some people would say that the model you have now established is not unfamiliar to the British Army. It depends where you start from when you want to have a look, particularly in terms of involvement of contractors. I have two sets of questions. One is about scrutiny, both independent scrutiny and general scrutiny of what is going to go on over time. This is a plan to 2020, which will cross Parliaments, SDSRs and so on. I also want to test this whole idea about integration, which is a central feature of the success of the structural changes that you are making. We seem to have the structures, the numbers, the assumptions and the tasks that will have to be carried out, so the numbers will get bigger or smaller-there will be flexibility and change, all against budget. How is all that being tested and what independent challenge is there? You talked, General, about some modelling and evidential stuff at the very start of creating the structure. That is one thing, but the other questions are about how the structure is going to be populated and what its utility is. What is going to happen in terms of independent scrutiny and independent challenge? Mr Hammond: I do not know that there is a model that can test the readiness of the military. We exercise, obviously, but only when you deploy at scale to deliver the output you are mandated to deliver do you demonstrate that capability in total.

I should say something on the point you made about Future Force 2020 being a cross-Parliament target. That is of course right, but the SDSR 2015 will certainly want to look at the Future Force 2020 construct and decide whether it needs to evolve further to 2025 in response to a changing environment. We do not expect the position to be static, and I am afraid anybody who hankers for a world in which we reset the structure once and then freeze it for ever is going to be disappointed. The likely future is one of scanning the horizon, monitoring changing threats, changing technologies and changing resource envelopes, and constantly evolving how we respond to challenges. I do not know the outcome of SDSR 2015, but it is perfectly possible that it will set a new set of parameters for Future Force 2025 that develop the force from what we have set out for Future Force 2020.

Q315 Mr Havard: That is the very reason I asked the question. It will be about pacing, phasing and flexibility. How are you going to understand, and let other people contribute to an understanding of, the best thing to do at any given time?

Mr Hammond: On the SDSR?

Q316 Mr Havard: That and the ongoing implementation of Army 2020 and another report on Future Force 2020.

Mr Hammond: On the SDSR, as I said when we talked about it when I was before the Committee previously, it is our clear intention that Parliament, this Committee and, indeed, external commentators should have an opportunity to participate in shaping the debate in the run-up to SDSR 2015. The Prime Minister will announce in due course how we intend to do that.

General Sir Peter Wall: There is no design manual for how to produce an army. There are a lot of subjective judgments here that are a mixture of art and science. I described the work we were doing when we essentially took a year to engage in what was primarily a blank sheet of paper exercise to work out the extent to which we could use consultation and focus groups within the Army. That was particularly about their use within the more junior ranks, who I call the warrior generation-the ones you met in Afghanistan, who have done multiple tours both there and in Iraq-to get their sense of the way we should go.

We wanted to ensure that we drew in the lessons from Iraq and Afghanistan in the round-there is a raft of them going on a rapid cycle to shape the next deployment, but there are also some bigger stand-back lessons about force structure, force generation, and dependence on contractors and reserves. Those sorts of things. There has also been some experimentation under the Agile Warrior programme that started three or four years ago and had matured sufficiently to inform some of this work, particularly about the nature of operations in complex environments such as urban areas, which is where we expect to be drawn to primarily in future.

We test those things in a more conceptual sense against what are known as the SAG-strategic assumptions group-scenarios, a menu of situations that represent what various joint forces-

Q317 Mr Havard: Operational scenarios?

General Sir Peter Wall: Yes, operational scenarios-joint force packages. It is not an Army phenomenon; it is a VCDS joint phenomenon that takes account of wider Government agencies as well. We have pressed to test empirically and conceptually in as many ways as we can. A lot of the equipment that we are bringing into this force structure is stuff that we have day-to-day experience of using in a hostile and threatening environment in Afghanistan, as you know; although we will obviously make much broader use of those systems in a less specific situation and will get back into a much more manoeuvrist use of our broader core equipment fleet: tanks, Warriors and so on.

Inevitably there is a bit of trial and error about this. Until we have actually lived the structure and lived the force generation and training system, we are not going to know whether we have optimised this or not. It all goes back to the business of how we get the optimum capability out of the resources we have. Of course, the optimum capability needs to take account of the fact that the question may keep changing. We may absolutely get optimised balance for a supposition about the type of campaign and the nature of conflict and suddenly find that actually the question has moved on, which inevitably happens.

We are by no means complacent that we have this right. In terms of independent scrutiny, there is no one providing that service, sadly. We do compare notes with other nations in Europe, and with our close allies in the United States-Army and Marine Corps, giving us two comparators-and all of that has been factored into the mix.

Q318 Mr Havard: Thank you. I would like to come back to integration in a second, but another aspect is the political decision making, if you like- the democratic deficit. I will come clean, it is Julian Brazier’s fault; I have just signed an amendment to the Defence Reform Bill about annual reporting to Parliament about cadets. It is amendment that will be discussed in that context.

There are lots of other things where Parliament needs to understand. What strikes us is that you are on a journey and you have to take a lot of people with you, especially if the Reserve thing is going to work. The better the understanding, the more informed the decision making, I hope. That is why we are asking the questions about how you are going to inform people and, more importantly, not just Parliament but generally, about how you test these things and see their evolution, as to whether they are really working or whether they are rhetorically working.

General Sir Peter Wall: There are two aspects I would like to pick up. First, with informing people and then leading everybody through the change programme, to be honest, I think we have got off to a pretty good start. We were able to explain that fully in terms of the challenge that had been set, going back to the conversation I had with the previous Secretary of State when we were told the parameters.

We were not able to consult inside the Army as much as we would have liked because of the sensitivity over regimental structures. We did not want it to get out piecemeal and end up with all sorts of lobby groups. We did it the way we did it, and I think we have compensated for that in the way that we have involved people subsequently in the detailed implementation.

I would not want to give you the impression that we have picked a point in space to which we are trying to march and we can’t modify that. What we have got is a generic direction of travel that takes account of rebasing the Army from Germany; changing our training model and equipment programme that inevitably we can veer and haul; new contractual practices to make sustainment more affordable; and the way we are going to integrate the regular reserve. All of those are parts of the big idea that would endure in a slightly different interpretation of future conflict or a slightly different resource envelope and so on. I see those as being constants with a bit of wiggle room.

Because of that, as we keep turning these stones over and saying, "Okay, we are coming to the next bit of detailed work on implementation," we can change it. We can take account of ideas from the younger cohort, and we can feed in at any stage lessons from operations, including what the French did in Mali or wherever it might be.

Chair: We are going to come back to some of these questions about integration. Madeleine Moon would like to come in now.

Q319 Mrs Moon: I am a little confused because I feel as if I am getting mixed messages. We are going into a new period of peace where we can safely draw down and we can look at reservists. Yet we are told we are going to play a bigger part in Somalia, in Africa, the Gulf, the Far East. We will be offering training missions. We will be having pre-emptive intervention preventing conflicts before they start. Which is it that we are going to be doing? Have we discussed how our apparent aspirations, which were spelled out in yesterday’s Times, sit alongside our new structure? Have we discussed it with our NATO allies, given that we are quite clear that we will always be taking forward operations in coalition in the future? How much discussion took place with NATO before the new structure was set in place?

Mr Hammond: Perhaps the word "peace" is causing the confusion. Let me treat "peace" as a proxy for not conducting an enduring operation at scale, which is what we have been doing for the past decade. Our planning assumption is that we will not expect to be continuously conducting enduring operations at scale. All the things that you talked about, including upstream engagement activities in particular and small-scale intervention, will absolutely form part of our future planning scenario.

The armed forces retain the capability to operate at scale and on an enduring basis, but increasingly with the support of reservists and contractors. That is part of the construct that the CGS has described. I do not find that confusing, to be perfectly honest. It is very clear that, as we come out of these enduring operations, the Strategic Defence and Security Review has identified some different roles that the military will be taking on, particularly in conflict prevention and capacity building around the world in seeking to prevent conflict.

On the NATO question, at the political level we routinely discuss in NATO ministerial meetings and in the NATO international staff how NATO can support conflict prevention and capacity building and how we can operate forward of the NATO homeland area to deliver the territorial security that was the basis of NATO’s original creation, recognising that many of the threats to the NATO nations now originate in the area immediately to our south and south-east. Often, the most effective way to address those threats will be early intervention in those areas.

Q320 Mrs Moon: Secretary of State, you are much more positive about sticking your finger in the hornets’ nest that all of these areas of operation represent than I would be. The question was in terms of our planned reconfiguration of our armed forces and the reduction to 82,000. What has been the response of our NATO allies?

Mr Hammond: It is fair to say that there is nobody in NATO who welcomes any reduction in force levels by any of the NATO partners. Equally, this is happening across NATO. With the exception of Norway, which has the good fortune to be sitting on a seemingly bottomless pit of gas, and Poland, which has its defence budget fixed in the constitution as a percentage of GDP, every other NATO country has been feeling the consequences of fiscal constraint. The US has its very large sequestration programme. The French, our closest allies and partners in Europe, have had to address a significant fiscal challenge in their White Paper published earlier this year.

This is something that all of us are having to deal with and the clear agenda across NATO is to make this work through collaborating more and through the joint forces initiative, which is about ensuring that we retain the benefits of working together that we have developed during the Afghan campaign operating as ISAF at 50%. We should ensure that we do not allow the benefits of intra-operability to be lost in the post-Afghanistan period. There needs to be more focus on joint equipment procurement and joint equipment operation and support as a way of delivering more within the limited budgets that we have available.

Q321 Mr Havard: May I go back to the question of integration? We now seem to have a given in terms of structure, on the current basic budget: we have got that on our planning assumptions. One part of that is the integration of Regulars with reservists-a lot of the discussion has been about that integration-but you said, Sir Peter, that that involves both them and contractors. This matter has not been fully understood or very well talked about, but there are effectively three elements, not two, within the Army. If you extrapolate that for whole force structures or the whole force, it becomes another argument, and then you have DFID and so on. On this question of integrating: who are you integrating, how you are integrating and what is the planning for the integration? It is more than just training Regulars together with reservists, if you are going to introduce contractors and all these other elements. Can you speak to that?

General Sir Peter Wall: Yes, I can. Let us just deal with the uniform piece first, if we could. In the higher-readiness part of our force, the Reaction Force, there is a dependency on individual reservists to the tune of about 10%, which is about what we are doing on a day-to-day basis in Afghanistan now. That is from combat arms and going through the force.

The Adaptable Force, which is the organisation that will be doing more of this defence engagement stuff on a day-to-day basis, but is capable of being tuned to produce a combined arms brigade-what was known as a multi-role brigade in old parlance-has a complement of about 30% to 35% reservists, most of whom are in what we call sub-units: companies, squadrons or batteries. The Adaptable Force Regular units have had their size reduced on the assumption that that proportion of their force-basically, the fourth sub-unit-will come from their paired reserve cousins.

If you and I were commanding officers of 2nd Battalion and 3rd Battalion the Blankshire Regiment, for the sake of argument, and you were the Regular and I was the reservist-that would be a fine arrangement-we would know that for a particular year in the readiness cycle, it was our job to make sure that we could collectively produce that force. We are in that partnership throughout the whole cycle and over time, so when you are going off on a defence engagement task with a small short-term training team in your specific part of the defence engagement landscape-each brigade has a specific zone of the globe where it has primacy for liaison and is engaged in these tasks-you would probably expect to take some reservists, so that we are all clutched together.

I think that this is a particularly pertinent relationship. It means that the training of operational staff in the Regular force can add weight to the training of reservists. That is all about getting competence to the right level to withstand all the rigours of coroners’ inquests-heaven forbid-in the context of discretionary operations. We are setting the bar quite high here, but the integration should give us the right DNA to get there.

In terms of contractors, this is about volume provision of service, but it obviously has to plug into the back of our force somewhere. I say "the back", but you know what I mean-the logistic echelon of our force. At the margin, there will be some contractors who, at a peacetime tick-over scale, provide those functions for us in our day-to-day peacetime business, who could transition to have people in uniform when we go into the battlespace-the so-called sponsored reserves. We already have some of those-in things like our tank transporter contracts, for example-but not all that many. There is tremendous scope to increase that population, so that you have much more surety of understanding as a contractor goes from the peacetime tick-over mode to something in a forward area.

We are not assuming that the contractor will take up those roles in the heat of battle in the first couple of iterations of an intervention operation, but once things stabilise into a framework context, where the geography is not shifting and we can create the right sort of force-protected areas à la camp Bastion, for example, then all the evidence from Afghanistan tells us-particularly if we are doing it in a premeditative way, rather than picking up contractors in theatre in the heat of the campaign, as we did in 2008-09-that we should be able to do this in a pretty structured and cost-effective way, with a very high assurance of delivery.

Q322 Mr Brazier: Before asking my question, may I ingratiate myself by saying that in strongly supporting the vision you have just outlined, Sir Peter, there was still one sergeant-major left from the London Rifle Brigade defence of Calais? That is exactly how that battalion was used by its two regular battalions in that heroic defence relatively early on in the war. It is not a new concept; it is a bloody good concept, which we are resuscitating.

However, I want to come back to the point on integration. The area where we are deficient compared with our English-speaking counterparts is in the commanding officer slots in units of very small proportion now. I believe it is down to less than a third held by reservists. I know you have taken a close personal interest in this, but the particular concern that keeps getting fed back to me is not that the process is hugely unfair for selection or anything like that, but that in exaggerating the amount of time needed by a commanding officer, the template has been written in a way that rules out people very often with good quality civilian jobs.

Abroad, the lesson again and again is that you get good COs by having people with good civilian jobs who give a modest amount of time with good full-time support. May I put that thought to you?

General Sir Peter Wall: We have been round this point. I know you take a close personal interest in our boarding process. The statistics are not a secret, but obviously the detailed discussions are confidential. I keep a pretty close eye on those who are eligible and who are actually making themselves available in a given timeframe-probably 30% fewer-and then how they match against their Regular counterparts. At the moment, we have got the balance about right, bearing in mind all the complex things we are trying to do, which are more than a part-time command function when we are trying to change this model so dramatically and we have got such a significant recruiting challenge. I would not want to do anything that was going to reduce the emphasis on that, for all the reasons that the Committee understands.

When we have got more people who have been through this cycle in company command tours, for example, earning their spurs alongside their Regular counterparts in these paired organisations, then I hope that that will stimulate a slight re-balancing in the direction you would like to see.

Q323 Mr Brazier: With your other hat on, CGS, are you happy with the way in which army medicals-Regular and reserve-are becoming more and more politically correct? So many of my friends’ sons have failed their army medicals because of rugby injuries. It seems it is becoming harder and harder.

General Sir Peter Wall: I am not sure it is anything to do with political correctness. I have certainly heard stories where old injuries are being treated too sensitively, and the director general of the Army Medical Services is currently doing a study-it reports in the next couple of months; we want him to do a thorough job-to work out how we take this forward.

Mr Hammond: We discussed this only the other day. It is worth saying that part of the reconstruction of the reserves is a raising of the fitness standards required, because we are talking about people who have to be capable of deploying alongside their regular counterparts having comparable levels of fitness. One of the things that we have been very open about-the CDS in his article in The Times this week made direct reference to this-is that we might lose some people from the Army reserve in the short term, as a consequence of requiring higher standards of fitness. Not all the people who are in now may be capable of meeting those standards. If we are going to get the reserve right and make it an effective and functioning part of this integrated Army, we have to bite that bullet.

General Sir Peter Wall: That is a very important point. If you were expecting just to achieve straight-line growth to where we need to be without some slight turbulence in the existing trained strength of the reserve-by dint of, first, medical standards, secondly, the slightly different habits that this force will have to adopt and, thirdly, the geographical adjustments we are making to get to the new force structure-I think that it would be optimistic to think that we would not see a little bit of natural wastage inspired by that, which was above the average. We should see that as an essential element of this transition.

Chair: We need short questions and short answers, please, in order to get through what we need to.

Q324 Bob Stewart: Chair, I take your direction. Could I ask, Secretary of State and CGS-one of you can answer-what is the top strength of Army 2020 and what is its biggest weakness? Just one, please.

General Sir Peter Wall: I think the top strength is operational capability for the resources allocated.

Q325 Bob Stewart: And the weakness?

General Sir Peter Wall: I think the weakness is that there will be some areas where resilience turns out to be less than we will need, and we will have to take remedial action.

Bob Stewart: Thank you. Was that short enough, Chairman?

Q326 Chair: That was very good-both of them: a good question and a good answer. You clearly nodded, Secretary of State, to say that you agree with that.

Mr Hammond: Absolutely. I defer to the CGS on this.

Q327 Ms Stuart: Secretary of State, despite the fact that you do not quite like our definition of being left alone in peace, I wanted to get back to that phrase. You said, "Left alone, in peace, with the budget that we have assumed, we will manage to deliver the output". Being left in peace also means you have no access to urgent operational requirements, doesn’t it?

Mr Hammond: Sorry, I would have to go back to the context. It sounds to me as though I was saying that, left alone to get on with this, with the budgets that we had-

Q328 Ms Stuart: My key question is that if we are now into planned operation, that also means that we will no longer have access to UORs. We are talking about the core budget.

Mr Hammond: Yes, that is correct.

Q329 Ms Stuart: Have you got enough budget without UORs to deliver what you want to deliver?

Mr Hammond: Yes. UORs provide support for equipment that is delivered for a specific operation. They do not provide us funding to hold that equipment in core, so where we are bringing equipment that was delivered as a UOR into Afghanistan back into core at the end of the campaign, we have to provide from within our core budget a funding line to support that equipment once it is returned to core. Our planning assumptions absolutely do not include provision of UOR equipment for our standing capability in the future.

Q330 Ms Stuart: So your answer to the Committee is that you can operate without the UORs on your budget with Army 2020 plans. You have got the budget.

Mr Hammond: Yes.

Q331 Ms Stuart: Okay. The next thing I want to do is to take you back to a rather interesting article in The Times in which the CDS describes Malcolm Rifkind and Liam Fox as "salivating defeatists" because they cast doubt on the Army 2020 plans. Do you share that view or would you choose a different set of words?

Mr Hammond: First, I do not think that the CDS did say that. I think that is a journalistic interpretation. Secondly, I was very pleased to see the CDS’s-

Q332 Ms Stuart: "Salivating defeatists", reported in quotation marks, is a rather ingenious phrase to come up with, don’t you think?

Mr Hammond: The CDS used that term, absolutely, but the names that it has been coupled with I do not believe were the CDS’s words.

Q333 Ms Stuart: So who are the salivating defeatists, then?

Mr Hammond: Sir Bob Russell makes an interesting suggestion, on which I could not possibly comment. There are a lot of people out there who are telling us, a few weeks into this five-year campaign, that we will fail. I take comfort from the fact that people in the Army tell me that they are quite used to people telling them at the early stages of campaigns that it is not possible, and they routinely demonstrate that it is. I am very confident-and you have heard the CGS’s confidence-that we will be able to deliver this agenda. It will be challenging, but nobody ever suggested that the things we are trying to do are not challenging. We know what we have to do and we will deliver it.

Q334 Ms Stuart: So who do you think he might have had in mind? It is such a strong term, "salivating defeatist". He must have had someone in mind.

Mr Hammond: He is a Yorkshireman; you tend to get strong terms. There are a large number of people out there who routinely comment that we are not going to deliver the numbers or be able to deliver the reserve force. There are people who have sought to stimulate doubt about our delivery of the reserve force in order to advance an argument about particular units in the Regular Army that are to be disbanded.

Q335 Ms Stuart: So what phrase would you use for Liam Fox and Sir Malcolm Rifkind, if they are not "salivating defeatists"?

Mr Hammond: I have not talked to either of them-

Q336 Ms Stuart: But they have doubts.

Mr Hammond: I have not talked to either of them in the context of the creation of the reserve force, although my predecessor did note in a newspaper article that it had been his intention to build the reserve before drawing down the Regular force. My comment to that would be the one that I have already made here today and I made in the House yesterday: that it would be an unfunded strategy.

Q337 Ms Stuart: Because we have limited time, I will not press this further, but may I leave you with a thought? Mrs Madeleine Moon raised the question in relation to NATO. I find it difficult to reconcile in my own mind an Army 2020 that wants to be left in peace and wants to be planned; yet at the same time we are planning action in places like Africa, which we hadn’t done before. You tried to explain that contradiction, but it still doesn’t make sense.

General Sir Peter Wall: I think the discussion misses the key factor, which is scale-that is to say, the size of the force. An 82,000 standing Army is a large organisation and it needs to be continuously engaged in interesting, challenging and relevant tasks to sustain the enthusiasm that allows us to retain the talent we need for all the sorts of uncertainties we will face in the future. So these defence engagement tasks and partner support tasks-such as what is going on in the context of support to AMISOM in Somalia, training the Malian army under the new training mission, and putatively, when it gets going, training the Libyan militias-are all well within the scope of the Army in its future size, let alone where it is slightly larger on the run-down to that.

That is even when we still have 7,000 or 8,000 people in Afghanistan, which is admittedly coming down quite fast at the end of this year, and the next brigade training. We do not need these tasks-but we are much better off with them-to exist, but to sustain our optimum efficiency and competence, they are extremely stimulating things for people to do, and obviously they need to be seen in the context of national strategy to be justified.

Q338 Chair: Talking about that, CGS, what changes will be needed to the training regime as a result of this?

General Sir Peter Wall: We have just completed a detailed study, essentially for both the reaction force and the adaptable force, as to what their training cycle ought to be. Of course, in the case of the adaptables, that has to take account of the implications for reservists and so on. As for what the tempo of that training should be, historically, the Army was on a 30-month training cycle; we are going on to a 36-month training cycle, which is to take some of the steam out of it and it is also more cost-effective.

The top-end training and combined arms manoeuvre training will still be done in Canada, subject to us being able to negotiate a suitable package with the Canadian Government and military. The Secretary of State has just kicked that ball off in discussions at ministerial level. We will work with them to map out a new arrangement that will come into being at the beginning of the 2015 training season. In parallel with that, we have significantly expanded the number of small exercises that we do for both Regulars and reserves in a number of training areas around the world, which gives a mixture of environments-from cold through to desert and jungle, and so on-going back to where we were a few years ago, when the pressure of training for Iraq and Afghanistan prevented us from having the time to go and do those sorts of training engagements.

In the case of quite a lot of those dispersed small exercises at company and squadron level, they also offer very significant partnering arrangements in the defence engagement context. The defence engagement piece is getting fused into our training regime where appropriate. It is a new-look approach. It is being driven by the way in which we get the best out of smaller training fleets and contractorised training support, with a heavy emphasis on investment in state-of-the-art simulation, which has been such an important part in preparing people for Afghanistan.

Q339 Chair: Will there be differences between the reserves’ training for the adapted forces, as opposed to the reaction force?

General Sir Peter Wall: Yes, there will. If I am really honest we have not quite worked out how, in a given unit, we will juggle individuals going off with a reaction force versus the people who are going to be part of the company that is required to be produced for Mr Havard’s battalion when he goes out of the door-to use the analogy I was using earlier. We have enough man training days-training days for each individual-in the sump to make that a pretty rich proposition.

Mr Hammond: Chair, can I just say something in case somebody reads the record and has a heart attack. We are not actually planning to train Libyan militia; we are planning to train members of the Libyan armed forces, which may of course include reintegrated members of the militia.

Q340 Bob Stewart: I will be quick, because I know that time is against us. I take it that the withdrawal from Germany is on schedule.

Mr Hammond: Yes.

Q341 Bob Stewart: Fine. Let us leave that. Secondly, are we likely to retain any training rights in Germany, because we have a fairly substantial and decent set-up there?

General Sir Peter Wall: We are looking at it. They are not so much rights as privileges.

Bob Stewart: Sorry, wrong word.

General Sir Peter Wall: And we have to make sure that we do that in concert with the Bundeswehr, with whom we are having a very active dialogue. We do of course have access to NATO ranges in Bergen, with which you will be well familiar, so should we wish to, I think the opportunity will be there. It comes down to need, cost, fleet sizes and all those sorts of things. In terms of our ability to co-operate with the German army, particularly in the armoured space, it is very attractive, but we have to see whether it will be part of the plot.

Q342 Bob Stewart: A throwaway remark, and it is my last one. I was speaking to a Russian officer, who suggested that we might like to train in Russia. It might be cheap. I do not know whether that is out of the question.

Mr Hammond: The Kazakh Defence Minister, when he was here last week, invited us to use training areas in Kazakhstan. There are plenty of offers around. It is about finding what is most cost-effective and delivers the most appropriate training.

Q343 Derek Twigg: You mentioned in one of your answers a few minutes ago that obviously this is putting pressure on certain areas in terms of resilience, but you have to find contingency for that. Could you expand on where those pressure points will be on resilience, and are you absolutely confident that they can be dealt with?

General Sir Peter Wall: Yes, I think that in our force structure we are conscious that we have made certain assumptions about the balance between Regular, reserve and contractor logistics, and if those assumptions turn out to be incorrect, then we may find that the dependence on Regulars-because of the threat situation or the tempo of operations, or some other unforeseen sort of delta-is greater than we would like. In that situation, we might have to enrol people from other parts of the Army to do transport functions and things like that.

We can see increasing pressure on the demand for communications bandwidth in the tactical space. We have taken account of that in our design by pro rata reducing the Royal Signals by considerably less than the 20% average, but even so, I can see that demand growing as a consequence of the changing nature of the way that business is done in the future, which is not so much a function of size, but of the changing character of the way we do things, with an increasing dependence on high-resolution imagery for targeting and things like that. I can see that happening. I think in the gunners and the sappers we also might find that they are running a little bit faster than we would like and some of their other cap badge counterparts, but that has often been the case in the previous structures of the Army, depending on the nature of the specific operation and where the emphasis lies.

Q344 Derek Twigg: Do you think you will be able to retain the quality and number of special forces with this much-reduced Army? Are you confident about that?

General Sir Peter Wall: That is a really key point, because there is inevitably a gene pool issue here. We have done some work on it and we think that the types of people who will join the smaller Army are going to be more at that end of the spectrum than just a sort of "squad" average person, if you like. So, with the right sort of incentives and the right sort of stimulus, particularly as we come off operations in Afghanistan and special forces operations look a little bit more unique than they have for the last 10 years, we are pretty confident we will get there.

Chair: That is a really interesting answer and the best answer to that question, which we have been putting now for a number of years, that I have heard, so thank you.

That is the end of this evidence session. You may regard us, CGS, as hopeless pessimists, but actually our role is to question everything that you do and we will now consider what you have said. We may ask further questions in writing, or something like that, if something comes up that we need further elucidation on. But Secretary of State, CGS, thank you very much indeed for very interesting evidence.