Select Committee on Defence Minutes of Evidence

Examination of Witnesses(Questions 120-131)



  120. You did suggest all navy equipment is being considered.
  (Mr Webb) Well, all armed forces equipment.

  121. I did not think that was very helpful for your marketing on the sales side of the MoD to try and salvage Sheffield. That recommendation from the Secretary of State would not help you and encourage people to seriously consider buying it. Could I ask you what other programmes are seriously being considered now for cutbacks? Are you cutting back on your ability to allow the fleet to exercise properly? Are you terminating any of the planned exercises for the next 18 months that are in the pipeline already as a conscious policy decision within the MoD, Mr Webb?
  (Mr Webb) I think Mr Mann explained we have an annual planning round which this year is absorbing a number of new things which Mr Hoon has already described in his earlier speeches I have been reading out. We need to be very careful that we do not, when the defence budget is increased significantly for the first time in many years, start getting completely bogged down in reducing things. The news is we are expanding things.

  122. We are trying to make sure you are spending it wisely, Mr Webb. We are supportive of you getting more; we are making sure that you are getting real benefits from this extra money and we are not losing capability because you have made other decisions which are not exactly the right ones.
  (Mr Webb) We have a process which we have described a couple of times which is to look at equipment in the round on a long-term planning basis. We have not completed that process for this round. It will be many months before it is completed.

  123. What about HMS Nottingham?
  (Mr Webb) I do not know.

  124. Are you saying a policy decision has not been made about that?
  (Mr Mann) No, we have to look at HMS Nottingham hard and work out what is to be done with her first.

  125. People might be kidding themselves that she is going to be back in the fleet?
  (Mr Mann) No, we have taken no decisions at all. The purpose of the planning round—and this is classic leak season—is to look hard at every element of capability and to make sure we have got it right for the future.

  126. Nottingham is being piggy-backed across the world. Are you bringing her back to refit her, to rebuild her, or are you bringing her back to scrap her?
  (Mr Webb) I am afraid, Chairman, expert as I hope we are on policy (and we have made a stab at the broader equipment programme) we are not experts on individual items of equipment.


  127. I think you should have anticipated that Mr Hancock and Syd Rapson would have asked a question on that.
  (Mr Webb) I feel to my shame that I have not been able to answer it but we will tell you what the position is on Nottingham. 5

Mr Roy

  128. The New Chapter highlights the importance of defence diplomacy and conflict prevention. I know that is going to be a three year programme. However, what I would like to know today is whether the money the MoD spend on this (£448 million per year) has already been accounted for or will the MoD need to go back to the Treasury now for the next three years and ask for this money?
  (Mr Webb) This is a very complicated subject, sir, but let me have a go because both Mr Mann and I were involved in setting up the Conflict Prevention Fund. What the Conflict Prevention Fund was all about was saying that between the MoD, the Foreign Office and DfID we should pool our budgets in the general area of conflict prevention and then try and prioritise them more widely, so we have two pooled budgets for conflict prevention, one for sub-Saharan Africa, which DfID lead on, and one for the rest of the word called Global, which the Foreign Office chair. What happens is that we try to meet together in two groups under Ministers and decide our priorities. Having worked out the priorities, we then transfer the money from the pool back to the departments to spend. The pool is a sort of joint negotiation with the Treasury, but the Treasury, who were very much involved with us in setting this up, as an incentive, because they thought it was a good way of doing business and it really is a good bit of joined-up government, put a bit of extra money into the pool to encourage people and give us a bit of flexibility to make some prioritisation choices. That is how it works and we to some extent are both a decider about how the pool is spent, because our Ministers are on the groups, but we also make proposals. We will say, "We think it will be a good idea to spend money on the Balkans or this bit of Africa as opposed to that bit of the Africa," whatever it is. We then have a discussion with departments on the priorities and come up with something. That is how it works. It also includes minor ops so quite a lot of money goes on covering minor defence operations intended for conflict prevention purposes. That is a quick overview.

  129. Do you have to go back to the Treasury every year and ask for the money?
  (Mr Webb) No, because the size of the pool is settled in the spending round—
  (Mr Mann) We faced a question right at the beginning about whether this was the routine stabilisation activities—good governance and that sort of thing which are relatively predictable and therefore you can predict them in advance—or should we include minor operations like the Balkans and so on. We took the decision to go wide. That means we have got a set of costs (operations) in there which is relatively volatile. If a new operation like Sierra Leone arises clearly you could not predict that into the future. It gives us an element of volatility. What we are required to do is to forecast ahead where we can forecast ahead with the Treasury and reach an agreement on funding elements with the Treasury but also go back routinely to the Treasury and say, "This is the way in which our costs have changed." Those changes are reflected in the ESTIMATES process to Parliament.


  130. Thank you very much. It has been an the interesting session. I shall be watching the Committee of Public Accounts very, very closely to see what they say and if your colleagues there were more forthcoming on equipment issues, Mr Webb, perhaps we can call you back and ask some more questions. I refuse to accept the fact that an issue that we are very very much involved with and where we took the trouble to go to Oman is not properly answered because you are embarrassed about disclosing any information prior to going to the Committee of Public Accounts who, to the best of my knowledge, were not in Oman.
  (Mr Webb) I have not said that, sir. I am simply saying that we brought a broad-based team and next week's team will be more specialist.

  131. We have specialist questions too, and however broad-based your team was, it was sufficiently broad-based to answer many of the questions that we warned you we would be asking. You performed well as always. Mr Mann was rather quiet, rather more quiet than he was in the conference I attended in Southampton—and I asked no questions on that you will note, Mr Mann. On policy, fine, but on equipment I would certainly like to see who you are lining up on Monday and see whether they should have been here to help this Committee which is, after all, the Defence Committee. Despite that, it was a very interesting session.

  (Mr Webb) We got a lot from it too, sir.

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