Select Committee on Defence Minutes of Evidence

Examination of witnesses (Questions 1 - 19)




  1. Mr Hill, gentlemen, welcome.
  (Mr Hill) Thank you, good morning.

  2. I must tell you that I am imposing a £50 fine for the first person who confuses DERA and DARA because we are returning to DERA shortly. Thank you for coming. It was a very helpful meeting that we had with you in St Athan. The genesis of this inquiry, I suppose, was two-fold. One, was the invitation by John Spellar to look at DARA and, secondly, we have an obligation, a self-imposed obligation, to examine the Agencies attached to the Ministry of Defence and your organisation came out of the hat, or a pin alighted on your name, most fortuitously because of your proposed change in status. So our inquiry today, which will be followed by a report, will be looking at moving to a new status. We will be reporting to the House and we will take the opportunity of commenting generally on what we saw and what we have read. We wrote to you, Mr Hill, seeking a number of documents, some of which have arrived. I wonder whether you could tell us if in the second bundle it includes the DLO conducted survey of DARA/St Athan personnel? Do you know if that is coming from the MoD?
  (Mr Hill) We are certainly going to be delivering that to the Committee. I think that is available now.
  (Mr Oughton) Perhaps I could answer that point. We have completed the survey and the results have been made publicly available to our staff so, yes, indeed that information will come to you.

  3. And DARA's Customer Service Agreements?
  (Mr Hill) Yes, we released that yesterday.

  4. Wonderful.
  (Mr Hill) Into the MoD's hands anyway.

  5. So we may see it eventually. You sent us DARA's Terms of Business Agreement, have we got that or is that with the MoD? We have got that. Any interim report of the assessment of options for St Athan's future, including the assessment of the possibility of moving to Cardiff Airport?
  (Mr Hill) There is no report because the study is still ongoing but I am very happy to give you an overview as to where we are now.

  6. There is no interim document?
  (Mr Hill) No, there is no interim document.

  7. We have the report of the conclusions of the Engines Study Group, thank you very much. The other one is the MoD report: Project for endorsement by the Equipment Approvals Committee (Eurofighter Support 14 May 1999) which deals in part with plans for the aircraft's in-service maintenance.
  (Mr Hill) That is not a document that we own in the DARA, that is owned by the Integrated Project Team in the DPA. We have spoken with them and I believe there are reservations about releasing that document.
  (Mr Oughton) Again, Chairman, the position is that the document is with the Minister and he will have to take a view on it.

  8. As I said when we visited St Athan, one copy in the safe, access to the Clerk and maybe, if you permit it, the Chairman on the normal basis of holding classified information. That would be helpful. Then we did say that the Committee would also like a memoranda on (i) Project Whirlwind and (ii) DARA's assessment of the future size of the markets for repair (for engines, airframes, avionics, transmissions etc) and the likely competitors of DARA in those markets[1].

  (Mr Hill) As far as Whirlwind is concerned, that paper is with the Minister. He is considering a public announcement on that but is not ready yet to clear that, so that very much lies with him. As far as the markets are concerned, we have released our assessments of the markets. Clearly that is quite sensitive material—

  9. Of course it is.
  (Mr Hill) We are happy for the Committee to see that as long as it is protected.

  10. You are happy for the Clerk to see it.
  (Mr Hill) As far as our competitors are concerned, we have provided a list of our main competitors. Again, I have a list here which I can take you through if you wish.

  11. Thank you very much, that is really helpful. I have to apologise, half way through the session this morning I have to depart and my colleague, Jimmy Hood, who came down with us, will be taking the Chair. As a result of my other engagement, which I can assure you is unmissable as far as I am concerned,[2] the sequence that we would have unfolded in a fairly logical way will be somewhat disrupted, so we will be moving in a strange way, Mr Hill, if you do not mind. I would like to ask some questions on the rationalisation of your organisation. Can you outline the main features of the rationalisation programme that you have under consideration? What is the sort of time frame involved for any relocations?

  (Mr Hill) Yes, Chairman, I would be delighted to. When we formed the DARA on 1 April 1999 we welded together two completely separate Agencies into one. Invariably there was duplication and under-utilisation of facilities in both. Our aim, with our rationalisation programme, is to eliminate unnecessary duplication, to reduce our overheads, and then if we do that we will make the DARA much more competitive in what is becoming increasingly an aggressive marketplace. Our plan is to create centres of excellence and so far we have successfully migrated all avionics work to our Sealand site, so that now is the single site for all avionics repair and overhaul. A few weeks ago we gained ministerial endorsement to co-location of our engine repair and overhaul at Fleetlands. That will take between 18 months and two years to implement. We now have two current studies that are under way that are being carried out jointly by management and trade unions and they are looking into mechanical component repair and overhaul and machine shops and also looking at the future of the Aircraft Business Unit at St Athan. The problem that we are faced with at St Athan is a very large site, 1,000 acres, over 900 buildings, most of them are 1938/1940 vintage, and for various reasons over the years they have become in quite a dilapidated state and there is a huge cost associated with refurbishment. We are carrying out a study that is going to use as a benchmark doing absolutely nothing. We are going to look at an option to refurbish a smaller number of buildings at St Athan and then, alternatively, to look at a greenfield site at Cardiff Airport. That study is ongoing but it will be several weeks before we get a first cut investment appraisal together.

  12. The impression I had, and it could be absolutely erroneous, was that the option that might be favourable is clearing out of the site altogether. Could you say if this is an objective either of the Ministry of Defence or the Royal Air Force or your own organisation?
  (Mr Hill) The Minister has given us clear direction that in our study we have to engage all stakeholders that are affected at St Athan. The site is currently owned by the Royal Air Force Personnel and Training Command and we are the largest lodger unit. We are leasing facilities from them and that is the way we plan to go into trading fund on 1 April. There are other major users on the site. There is 4 School of Technical Training, there are parts of the Technical Director (Air) of the DLO, the Repair and Salvage Squadron, Aircraft Recovery and Transportation Flights. Currently we have the Hawk detachment from Valley that does bombing practice on the Pembrey Range and we also have the University of Wales' Air Squadron. There are a number of people who have interests in St Athan. Our study has to take into account all their particular interests and that is why the study is probably taking longer than we had expected, because we do have to consult widely with the stakeholders.

  13. If you decide to leave then this will make the position of those remaining almost untenable I would have thought.
  (Mr Hill) It could do but, to counter that, we have had discussions with the Chief Executive of our Defence Estates, Ian Andrews, and he has nominated a project officer to work with us and to look at possibilities of alternative defence interests if a decision was made to vacate St Athan by the DARA.

  14. The consultation process involved representatives from the trade unions and the professional associations.
  (Mr Hill) Yes, indeed.

  15. Is there any representation from the trade unions on the various sites or would you assume that the national spokesperson has had consultations with the local workforce whose views may not be entirely congruent with those of the national organisation?
  (Mr Hill) As you are probably aware, we have got trade union representatives at the national level on our main management board for the Agency. In addition, the local trade union representatives at St Athan represent all interests, not just the DARA, they represent the support unit interests, so they are looking after everybody's interests on the particular site.

  16. So you would say, Mr Hill, that very certainly the local views are going to be very strongly taken into account?
  (Mr Hill) Yes, indeed.

  17. Because no-one likes change.
  (Mr Hill) No, but we have to manage change and it is very important for us to bite the bullet on these difficult issues for DARA as a trading fund if we are going to shape it up to make it successful in the future.

  18. You are going to leg it to Bristol, I understand?
  (Mr Hill) Not necessarily. Siting the head office at DARA St Athan was always an interim arrangement and we will be looking at alternative options for the future when we become a trading fund. The problem we are facing at the moment is we just do not have the staff effort available to look at this particular issue, but we do have particular problems at DARA St Athan recruiting specialists, in particular qualified accountants and also IT experts. We have carried out a number of competitions for those people and we just cannot get the quality that we require. That is why we may have to consider siting the head office in a larger conurbation so that we can trawl in the wider area.

  19. When I looked at some of the earlier literature and press reports about the new organisation and moving the headquarters, I cannot recall seeing any indication early on that the headquarters was a temporary move, that seemed to come in much later. Was it always intended to be temporary?
  (Mr Hill) Yes indeed, that is on the record in the minutes of the DARA Implementation Team Steering Committee going back to before the Agency was formed and it was always agreed that it would be an interim solution. Another problem that we are faced with—

1   p.20 Back

2   The Chairman had been summoned by HM the Queen to be sworn as a Member of the Privy Council. Back

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