Examination of Witnesses (Questions 140
WEDNESDAY 17 JANUARY 2001
TEBBIT CMG, MR
140. Forgive me, an example of using peacetime
criteria for a situation it does not match is an extraordinary
statement, if I can say so. You may not use material at all if
it is only going to be needed in war. You may have no movement
at all, however you may need vast quantities of it when you go
141. I am sure Mr Gould is aware of that. As
your first sentence excited several of us perhaps you would like
to explain in detail the criteria you take into account?
(Mr Gould) First of all, there is applicability criteria,
if the equipment is no longer in service or is coming out of service
or it is reducing in numbers. Stock movement is important, but
you need to apply judgment to it. Clearly you would not apply
that to weaponry. It is not munitions.
142. None are munitions.
(Mr Gould) You will find items in stock where, you
are right, it does not move, but you better have one just in case.
I can give you a very good example of that, but I will not bore
you with that. We had something for about 17 years and it had
not moved and then suddenly we needed it. It was to do with a
ship, I will not tell you which ship because it will only make
things worse. Finally, of course, there is the speeding up of
supplies from industry. If you have gone into a contractual arrangement
with industry and have date of order pricing and you have delivery
schedules contracted into the arrangements you have with the supplier,
you can look at how much you are holding and probably reduce that
in accordance with the contracts.
143. I do not want to impose additional burdens
on your successor, if you can give us what the official view is
on the criteria, it would be quite helpful to have some information
on the stuff you have got rid of, whether it goes to a scrap yard
or is given to our allies.
(Mr Tebbit) I would be happy to do so. One of the
benefits of the SDR is for the first time we have tried to specify
readiness levels for the Armed Forces in a much more precise way
than we had before. That helps you in the exercise because you
know how quickly you need to put them into the field.
(Mr Gould) The rate at which the disposal industry
can dispose of the stuff is a constraint.
144. When we were exercised about Bishopton
we were told there was a review of war stockpile requirements
that was underway. We do not expect this to be in the public domain,
would you have a look through the promises that were given to
see whether we could be given information on this or a look on
a classified basis of this context? I would not expect you to
give an answer now.
(Mr Balmer) Those studies are still in train. We have
not yet reached final conclusions on them. We can look to see
what we can release to you.
145. Thank you. We took evidence last week on
the Six Nation Framework Agreement which covered, amongst other
things, security of supplies. Is the MoD planning to be able to
make further stock reductions on the basis of assurances assumed
in the Framework Agreement? We trust our allies, basically, to
deliver stuff to us.
(Mr Gould) Not as a result of the Framework Agreement.
It is as a result of the assurance we get from our contracts with
industry. What the Framework Agreements may do is make it more
likely that some of those contracts will be placed overseas. It
is the contracts with industry that is the driver there.
Chairman: Thank you.
146. May I follow the point about war stocks.
I am not as well briefed as my Chairman on the study which you
are about to carry out. The Committee has heard occasional random
stories of the danger of war stocks running out, of shortages
which nearly occurred during the Kosovo War. If I may report,
without naming the item in question, I was asking about the stocks
of a particular kind of missile and asked where the reserve stocks
were and I was told that they would need to be procured from the
supplier. I asked who the supplier was to check the availability
of supplies and I was told that the supplier had stopped making
this particular type of missile. Will your study follow through
that kind of issue and will you be making it available to the
Committee, if necessary on a secure basis?
(Mr Tebbit) Are you talking about a particularly big
147. A large missile.
(Mr Tebbit) I think I know what you mean. We will
make available as much information as we can. Can I just make
two general comments? We do have, as you know, spares equipment
shortfalls within the organisation. I am satisfied that the stock
reduction programme we have does not affect that issue at all.
What we are doing to reduce stocks does not touch on spares equipment
shortages we have in the department. What we are doing there,
having exposed the problem, and this is partly as a result of
the Strategic Defence Review, is we now have a premium on making
sure we have what we need. That is a major challenge for us, because
what the defence logistic organisation has been created to do
is integration for organisations. Some of the most immediate problems
are ones which we are addressing right now with the immediate
money we got this year as part payment of settlement. It was for
this year, before the settlement period began, for things like
secure to air communications, missiles, GPS facilities for freefall
bombs, an intimate, intermediate solution for our freefall bombs
before we have a planned replacement in 2007. I would like you
to know that the need to act on lessons from Kosovo is a high
priority, particularly in this field.
148. In calculating the need for war stocks
of all kinds do you make assumptions about the lead period that
you will be given before it will be necessary to press the button
and go to war?
(Mr Balmer) The study we are conducting and the reason
it is taking a long time is that there are about ten different
parameters that one has to feed into these calculations. You have
to make an assumption about consumption on the battlefield; about
having the right munitions in the right place to be available
on the battlefield; the lead time for getting them there; the
shelf life for some of the items; there might be a need for training
and a variety of other factors which all contribute to the total
holding. Having established the total holding we then need to
apply the factors you are alluding to, of do we need to buy the
entire stock in one go? Does it make more sense to buy it over
a period? Does it make more sense to rely on supplies? When do
we perceive the need? Do we think there will be enough warning
time? All of those factors are at play in this study, that is
why it is taking a long time to reach clear conclusions on the
right guidelines to give.
149. The stockpile study was due at the end
of last year, I know we are just beyond the end of last year,
can you tell us when it is likely to be published? What progress
are the Defence Logistics Organisation making in cutting their
(Mr Tebbit) That was the output cost reduction or
increased output with the same cost target, which is the 20% reduction
by 2005. That comes, essentially, from integrating these three
big separate organisations with a sort of small headquarters with
a much more devolved management system. Like a lot of things,
this is an area where it is spend to save. We need a lot of investment
in IT systems necessary to reduce the size of the organisation.
2005 is the date for doing this, Mr Chairman. We have now started
putting pressure on the organisation with progressive cuts in
budget to make sure those things happen, but not so big at this
stage as to offer a sledgehammer blow. Brigadier Sam Cowen and
his organisation need a lot of capital investment to deliver that.
150. Thank you. Thank you very much. Your individual
command of your brief is, as always, most impressive. I am delighted
you decided to become bureaucrats and not politicians.
(Mr Tebbit) I have to send you the details of our
balanced score card.
151. After we publish your response to the Kosovo
Report we expect the balance will be even wider.
(Mr Tebbit) If only to show that military operation
and military capability are the first two highest priorities in
Chairman: Thank you very much.