Select Committee on Defence Minutes of Evidence

Examination of witnesses (Questions 120 - 139)




  120. If DERA are going to do quite well out of research maybe you should look again at DARA which is guaranteed 6% of Eurofighter work. Maybe you should have a look, Baroness, at whether DERA are getting a better deal than DARA or whether DARA are getting as good a deal as DERA in guaranteed work.
  (Baroness Symons of Vernham Dean) I shall report your remarks to Mr Spellar, who I am sure will take a very healthy interest in the differences.

Mr Brazier

  121. We have already had some questions on staff morale and questionnaires. Have you actually finished the split between the two organisations?
  (Sir John Chisholm) Yes.

  122. How many people wanted to go one way and have ended up going the other way?
  (Sir John Chisholm) I am glad, Mr Brazier, you asked that question because Bill and I informed ourselves of that yesterday. The maximum number that we have been able to run to earth of people who have raised an issue at this moment is less than half a dozen, of which only one who is currently in DSTL and wants back into New DERA has actually raised it in any way informally, actually not yet a formal complaint but it might well become a formal complaint.

  123. Right. How does your staff turnover over the last 12 months compare with the previous 12 months? Has it gone up or gone down?
  (Sir John Chisholm) Our staff turnover over the last three years has been pretty much solid. When I talk about staff turnover, just to define my terms, I am talking about voluntary staff turnover. Also we have people leaving through retirement and all sorts of other things but the voluntary staff turnover, people resigning, has stayed pretty much solid between 5 and 6%.

  124. While we are on personnel issues, I would like to come back to what seems to me to be a very central one here. There are obviously one or two retained areas where you are keeping the whole of it and, in fact, Lady Symons mentioned two earlier on, the defence analysis and the NBC side. Looking at the vast majority of areas within the retained area you are inevitably dealing with relatively small numbers of people in each group as the bulk of the research side has been taken away and you are more involved with the management side of providing scientific advice to the Government in the retained areas. The question I have for Mr Clifford is how many of the remaining areas of the company are close to critical mass, in other words you have got one or two people in a particular area providing the necessary scientific advice and where perhaps one resignation or retirement or move or whatever could leave you without a capability? How large and how viable? I see we have a figure of 130 technologies and scientific areas mentioned earlier on in the whole investigation process.
  (Mr Clifford) Personally I have been involved in the split, the choice of staff for many months, and in the more sensitive areas, as Sir John said, have had to operate as Chairman of the Committee which made final decisions. I take the view that there are no areas which are currently critical in the way you define them. One of the issues we have which any technological organisation has is the maintenance of critical mass and that is something we are giving a good deal of thought to, both internally in DERA, DSTL and with our MoD colleagues. I am quite satisfied that on 1 July when DSTL, as it were, launches separate from mother DERA it will not be critical in the sense you defined in any area.

  125. Right. If I understood Sir John's earlier answer you have only got one person who is actively campaigning to go back to mother DERA and be part of the brave new world?
  (Mr Clifford) Indeed, and I am due to talk to that person myself in the next week. I do not currently know why he is so campaigning.

Laura Moffatt

  126. On our travels and speaking to governments and companies involved in defence, Baroness, some shared with us some concerns about the Chinese walls and how effective and how robust and sturdy the Chinese walls would be between the two new organisations. Could you tell us what the process was to facilitate that, where shared facilities are?
  (Baroness Symons of Vernham Dean) I was very concerned about this when we began to discuss the way in which we would undertake the separation. From the beginning I was very keen that the premises should be as separate as we could possibly make them. We had a great deal of discussion about this over the course of last year and we decided that it was indeed very important that the two organisations where they currently share a site in so far as we can are in separate buildings and over the course of time actually go to separate sites. It was also very important to disentangle the information technology systems and a good deal of time and effort has gone into that, and also of course to disentangle intellectual property in order to ensure the integrity of both the organisations. I think we have done a very thorough job on this. I am conscious of the fact that people will always argue about costs involved but I did think it was very important indeed for the confidence of both sides. I am going to ask Sir John to talk about fire walls now within New DERA because I think that has been another point of interest, and of course he is the expert on the fire walls within the new organisation.
  (Sir John Chisholm) The fire walls can use various levels of defence. The first and most important level of defence is that we create in all our key projects compartments in which all the data associated with that compartment sits and people outside the Department have no access to it. Now in making fire walls work, it is crucial that no layer of management is in both those compartments so there is no opportunity for any influencing from a management point of view of what is going on on both sides of the fire wall. That is the crucial and fundamental separation that you have got to have in making fire walls work. On top of that, you can add other means which actually address more the apparency of the fire wall rather than the actuality of it because once you have done the first, you have actually separated the two organisations in a fire wall sense. You can separate them to make other people more comfortable by separating them geographically, having them in two buildings or in two sites. You can separate their information systems, you can separate all sorts of other things just to make people feel more comfortable about it, but the key thing is the first one where you create compartments where all the information associated with that project sits and no level of management has access to both of them.
  (Baroness Symons of Vernham Dean) Can I just make it clear that ultimately, of course, this is the responsibility of MoD and we will audit what is being undertaken.

  127. Obviously that was going to be my next question. You must be satisfied naturally.
  (Baroness Symons of Vernham Dean) Yes.

  128. Have you any feedback from industry? Are they satisfied? Has any work been done to put their fears at rest?
  (Baroness Symons of Vernham Dean) I have not had any indication to the contrary.
  (Mr Jagger) The fire wall between New DERA and DSTL will be exactly the same as the relationship between the MoD and British Aerospace, for example, and we can demonstrate that to anyone who chooses to ask. Fire walls within New DERA will only happen at the discretion of the MoD customer. The MoD customer will, exactly as he does now, have complete freedom to withhold his agreement, and to audit those fire walls and, indeed, normally he has to seek the agreement of other industries involved. DERA has, if I may say so, a very good history of running fire walls, where necessary, with excellent external audit results and industry contentment.

  129. I was interested to hear what you were saying, Baroness, about the computer systems, that it is difficult to separate them. Will they be two completely separate systems or are they able to speak to each other in any way? How has that been set up?
  (Mr Jagger) They will be able to speak to each other, I think, in the sense that my MoD central system at the moment can speak to any other system through a fire wall and an e-mail service or something like that, but in principle they will be as separate as your domestic or the House of Commons' system and the British Aerospace system.

  130. They are entirely different.
  (Mr Jagger) I confess to not being a technical expert. I know Bill is actually extremely knowledgeable in this area.

  131. Come on, Bill.
  (Mr Jagger) He made my e-mail work.
  (Mr Clifford) Yes. Terence, however, is as knowledgeable as he needs to be in this subject.

  132. Excellent.
  (Mr Clifford) We have already separate servers, separate computer banks which hold the information. There comes a point when one uses British Telecom lines to go from site to site and, in fact, then we are talking about encrypted data being passed so it matters not that they are shared facilities. Yes, totally separate physically, physically separate boxes you can go and touch.


  133. On this British Aerospace and MoD, British Aerospace do not occupy three floors of the main building in Farnborough I presume. Will they be using the same canteen facilities in Farnborough?
  (Sir John Chisholm) As of now we do but we have a programme of progressive physical separation into entirely self-sufficient sites.

  134. How about security? Will it be the MoD police for the whole site, one head of security for the Farnborough site, or will you be employing block security on your site and cutting down costs and MoD using more expensive but more professional MoD police? In Farnborough what are the security arrangements or what are they likely to be?
  (Sir John Chisholm) Obviously we will have on separate sites separate security arrangements.

  135. In Farnborough?
  (Sir John Chisholm) In Farnborough when the separate DSTL site is established the separate DSTL site will have its own security arrangements.

Mr Brazier

  136. I would like to follow that with a question on computers before coming on to my questions on intellectual property rights. As I understand it the reason why MoD has avoided the kinds of horrors over the internet which have afflicted the Pentagon is the physical gap, the air gap, the fact you are not plugged in. How will that work when you are on the outside?
  (Sir John Chisholm) I would very much like to answer that question, if I can, Mr Brazier, because actually we feel quite proud of the fact that we have our fire walls, DERA's fire walls, which actually also protect the Ministry of Defence survived the "I Love You" bug whereas many other people, who I would not want to mention here, were not able to.
  (Baroness Symons of Vernham Dean)—were incapacitated.

  137. When your organisation is owned by an outside company it will presumably be directly on e-mail to that outside company, it will become part of that.
  (Sir John Chisholm) I think you have a different model of what we are about to the one that I have but when our organisation is a private company then it will clearly have, as it does now, its own networks. It will protect its own networks through the kinds of mechanisms which we know well how to protect.

Mr Viggers

  138. Just a mop up question on the last series of questions about fire walls. Sir John, you twice used the expression "no level of management has access to information", is that a work of art? Does it mean people other than management do have access beyond fire walls?
  (Sir John Chisholm) I was just relating to management because management might be thought of as having a commercial interest but actually it is no-one.

  139. Right. What has been the cost of separating the two components of DERA?
  (Baroness Symons of Vernham Dean) I would like you to treat the figures with a certain amount of caution because we have not bottomed out all the figures at the moment. It is likely to be of the order of 70 to 80 million.

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