Select Committee on Public Accounts Sixth Report


SIXTH REPORT


The Committee of Public Accounts has agreed to the following Report:—

MINISTRY OF DEFENCE: MAJOR PROJECTS REPORT 2000—THE ROLE OF THE EQUIPMENT CAPABILITY CUSTOMER[1]

INTRODUCTION AND SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS

1. Each year since 1984 the Ministry of Defence (the Department) has reported to Parliament on progress in procuring major defence equipments.[2] The Comptroller and Auditor General's Major Projects Report 2000 covers the period to 31 March 2000 and is the first to be produced in a new format reflecting the changes in project accounting and approvals brought about by the introduction of Smart Acquisition and Resource Accounting and Budgeting. It reports progress on the top 30 equipment procurement programmes split, in accordance with Smart Acquisition principles, between the 20 largest projects on which the main investment decision has been taken and the 10 largest projects yet to reach that point. The Report includes data on the cost and time performance of projects against the Department's estimates and, for the first time, data on the technical performance of projects against the Customer's key requirements.[3]

2. Our predecessors held two hearings on the Major Projects Report 2000. At the first session on 15th January 2001 they examined the impact which project slippage had had on the operational capability and costs of four case study projects - the Air-Launched Anti-Armour Weapon (Brimstone); the Type 45 Destroyer; the Medium Range TRIGAT anti-tank weapon system and the BOWMAN communications system.[4] At the second session, on 17th January 2001, they examined the progress of defence projects against the cost, timescale and technical performance parameters set by the Department.

3. At both hearings our predecessors took evidence from the Chief of Defence Procurement and from the Deputy Chief of Defence Staff (Equipment Capability) about the role of the Equipment Capability Customer organisation. The Equipment Capability Customer organisation was set up to help improve the way the Department meets the capability needs of the Armed Forces.[5] It is responsible, in consultation with the Armed Services, for deciding what capability is required and how much funding to allocate. It then asks the Defence Procurement Agency to deliver the required capability.[6]

4. We have decided to produce two separate reports based on the hearings. Our first report[7] considers whether there are signs of improvement in the Department's performance in acquiring projects within approved cost, time and technical parameters, and the Department's progress in implementing Smart Acquisition. Since schedule performance has been worsening, the report also examines the adverse cost and operational impact of slippage. This second report takes an early look at the role of the new Equipment Capability Customer organisation in improving the provision of defence capability, and how it prioritises capability needs and funding.

5. Our main conclusions are as follows:

  • We fully recognise the impressive achievements of our Armed Forces. Despite the considerable sums of money spent on defence equipment, they are, nevertheless, still faced with using out-dated equipment and relying on other nations to provide elements of capability which should by now have been available to them. The establishment of the Equipment Capability Customer organisation, with responsibility for deciding what is required and for controlling the funding to deliver these capabilities, is a potentially significant step towards providing the Armed Forces with the equipments they need at the time they need them.

  • The Equipment Capability Customer organisation should demand high standards of delivery from the Defence Procurement Agency. It should clearly set out its requirements in terms of performance, cost and time and should communicate these to the Agency.

  • The Equipment Capability Customer organisation needs to be rigorous in prioritising its capability needs in order to ensure that available funding is allocated to best effect. In particular, it needs to conduct thorough and timely analyses to support the proper identification, prioritisation and co-ordination of capabilities across all three Services.

6. Our detailed conclusions and recommendations are set out below.

The role of the Capability Customer organisation in improving the provision of defence capability

      (i)  Vice Admiral Blackham, the Deputy Chief of Defence Staff (Equipment Capability), said that, as the Customer of the Defence Procurement Agency, it was a matter of concern that equipment was not being delivered when he needed it and at the cost he specified. The Committee views with serious concern how long the Department can take to meet the Armed Services' needs. For example, the Medium Range TRIGAT programme was initiated around 1979 and, when it was cancelled, the requirement was not expected to be met until at least 2005, 26 years later. This is equivalent to the commissioning of a weapon at the end of World War I but not receiving it until the end of World War II (paragraph 11).

      (ii)  The Advanced Short Range Air-to-Air Missile (ASRAAM) will be required to take on the most capable systems available to potential opponents. It is 24 months late. Vice-Admiral Blackham regretted this delay, but was not surprised by it, given that the programme utilises leading edge technology. The Department needs to take a more realistic view in future of the maturity of the technology involved in a programme before committing to deliver an equipment to a given timescale (paragraph 12).

Prioritising capability needs and funding

      (iii)  There was confusion between the Capability Customer and the Defence Procurement Agency over the fitting of a sonar to the first three Type 45 destroyers. The Department only recognised the lack of sonar as a fundamental issue when it was highlighted by the C&AG's report. The Committee finds it difficult to understand how the planning for these ships could exclude such vital pieces of kit and views with concern that such a possibility could have been seriously considered. The Committee therefore recommends that the Department should review the arrangements for communication between the Equipment Capability Customer and the Defence Procurement Agency to ensure that those arrangements can be relied on to convey exactly what is required (paragraph 28).

      (iv)  The Chief of Defence Procurement said that the sonar was being procured because of the headroom provided by the lower than expected contract price secured on the prime contract. The statement implies that, if the contract price had been a few per cent higher, there might have been no sonar. Vice Admiral Blackham suggested that, if necessary, he would have looked to make the sonar affordable from elsewhere in his budget. That is not satisfactory and the Customer Capability organisation needs to develop a rigorous approach to planning capability which will ensure that key requirements such as the Type 45 sonar are given the budget priority which Vice Admiral Blackham suggests they warrant (paragraph 29).

      (v)  Several different sources are being considered for the Type 45 Destroyer sonar, including off-the-shelf procurement of an existing sonar or the re-use of sonars from ships which have been withdrawn from service. Vice Admiral Blackham assured our predecessors that, whatever sonar was fitted to the Type 45, it would be cost-effective and capable of deployment in all theatres. The decision to fit the sonar must not delay the entry into service of the badly needed improvement in the anti-air warfare capability of the Royal Navy which the Type 45 Destroyer will provide (paragraph 30).

      (vi)  The Department has not always undertaken the right analyses at the right time. It accepts, for example, that it should have undertaken a study on anti-armour weapons before committing to industrialisation and production of Medium Range TRIGAT, rather than after the subsequent decision to withdraw. For the future, the Equipment Capability Customer organisation needs to specify the appropriate stage for such analyses at the outset, and ensure their more timely completion (paragraph 31).

      (vii)  The Department's strategy for meeting its anti-armour weapon requirements appears to have evolved incoherently over time and with cost penalties. The Department paid a premium of around double the unit cost of an earlier order to upgrade additional BL755 cluster bombs for the Kosovo campaign, reduced the number of Brimstone missiles being procured with no prospect of a proportional saving in price, and purchased Maverick missiles at extra cost. The Equipment Capability Customer should make timely judgements on the number and mix of weapons required to enable cost effective procurement and avoid such cost penalties (paragraph 32).

      (viii)  In the airborne anti-armour role, the Department suggested that three weapons would have a part to play in future, the existing RBL755, and the new procurements of Brimstone and Maverick. Similarly, the new ASRAAM missile and existing Sidewinder missile will be used side-by-side for the next 20 years. In reaching such judgements, the Department should quantify the cost and operational merits and drawbacks of operating such mixed inventories (paragraph 33).

      (ix)  The United Kingdom's Apache helicopters will not be fitted with an air-to-air missile because the Equipment Capability Customer decided that procuring an air-to-air missile would not be the best use of resources given the other air defence assets available. Similarly, the Customer considered when suitable aircraft platforms would become available in deciding to reschedule the Brimstone missile. The Customer should take a similarly holistic view in identifying how best to meet other capability needs, and should adapt its arrangements for evaluating future needs so as to embed this good practice (paragraph 34).

      (x)  Eurofighter will enter service with the Royal Air Force without a gun because the Department has decided to delete the requirement, saving £32 million. The Department put forward persuasive operational arguments to justify the decision not to fit a gun. To remove any doubt about the decision to delete the gun, it would be wise for the Department to cross-check why our Eurofighter partner nations are still fitting the gun and why other countries fit guns to their aircraft (paragraph 35).

      (xi)  The Equipment Capability Customer is conducting a Balance of Investment study looking at what mix of air-, land—and sea-based weapons could best meet the Army's long range fire requirement. The Customer will make a final decision on the type of gun to be fitted to the Type 45 Destroyer once this study is completed. The Customer should ensure that the timing of this decision does not adversely affect the timescale for the design and production of the Type 45 Destroyer (paragraph 36).

THE ROLE OF THE CAPABILITY CUSTOMER ORGANISATION IN IMPROVING THE PROVISION OF DEFENCE CAPABILITY

7. The Comptroller and Auditor General's report shows that, whilst the Department may have begun to control costs better during the demonstration and manufacture phase of projects, control of time remains a problem.[8] The average project delay is getting longer and delays have led to capability shortfalls on many projects.[9] As the examples in Figure 1 illustrate, the capability shortfalls, as a consequence of delays on 13 out of the 20 post-Main Gate projects, are alarming.

Figure 1: The operational impact of in-service date delay[10]
Project
In Service Date delay (months)
Excerpt from the operational impact statement (Section 3e of the Project Summary Sheet as agreed with the Customer)
High Velocity Missile
81*
The delay in HVM In Service Date from December 1990 to September 1997 resulted in the 1st (UK) Armoured Division having no specific Very Short-Range Air Defence capability. A lesser capability was provided by Tracked Rapier and the man-portable Javelin systems.
Spearfish
75*
The delay to Spearfish In Service Date from 1987 until 1994 resulted in a significant and extended capability gap in anti-submarine warfare and anti-surface warfare
ASRAAM
24
The RAF plan to continue to use Sidewinder stocks for their short range air to air missile capability. The consequence is continued use of a lesser capability for longer
Nimrod MRA Mk4
20
This slip will delay introduction of the improved Anti-Submarine and Anti-Surface Unit warfare capability.
Merlin Mk 3
6
The delay to the In Service Date has reduced the Joint Helicopter Command's operational capability and flexibility for moving troops and stores. Joint Helicopter Command are currently reviewing their plans to manage this capability gap.


Note: * These equipments are now in service.

8. Asked whether there was a major gap in our capability, which had been going on for many years, Vice Admiral Blackham said that he always regretted the delay of capability but there was nothing he could do about almost all of the incidents listed in Figure 1. His job was to ensure that the situation in the future was much improved, and he was confident that his organisation would be able to do that because the way it approached its business was now quite different.[11] He agreed that it was unsatisfactory for equipment not to be available when it was needed and said that he wanted the capability when he asked for it.[12] But to paint a picture of Forces that were ill-equipped was at odds with the facts. All the campaigns conducted by the United Kingdom in the last decade had been attended with great success and with almost no casualties.[13]

9. Of the four case study projects examined, two were five years late (the type 45 Destroyer[14] and BOWMAN[15]), one was fifteen months late (Brimstone[16]) and one had been cancelled (Medium Range TRIGAT[17]). Of the two projects past Main Gate, Brimstone was predicted to underspend by two per cent and the cancelled Medium Range TRIGAT had been predicted to overspend by two per cent.[18] On the two projects in the assessment phase, the Type 45 Destroyer was forecast to overspend by 10 percent and BOWMAN by 159 per cent.[19] Vice Admiral Blackham was asked how he saw these figures as the Customer for the equipment. He said it was a matter of concern if equipment arrived late and if the consequence was that the Armed Forces were stuck with weaponry which did not meet the threat.[20]

10. The 24-month delay to the Advanced Short Range Air-to-Air Missile (ASRAAM) meant that the Royal Air Force has continued to use the less capable Sidewinder missile for its short range air-to-air missile needs.[21] Asked what the implications of that situation were,[22] Vice Admiral Blackham said that Sidewinder could not do what ASRAAM would be able to do and that there was certainly a loss of capability.[23] The delay to ASRAAM was regrettable but not wholly surprising because the Department had set demanding standards to enable them to take on the world's best systems. The ASRAAM project was operating at the cutting edge of technology particularly in the area of systems integration.[24] Vice Admiral Blackham added that he wanted the missile to work properly when it arrived and he was confident that the work being undertaken would achieve a high degree of compliance with the Key User Requirements, although he was not sure that there would be full compliance.[25]

Conclusions

11. Vice Admiral Blackham, the Deputy Chief of Defence Staff (Equipment Capability), said that, as the Customer of the Defence Procurement Agency, it was a matter of concern that equipment was not being delivered when he needed it and at the cost he specified. The Committee views with serious concern how long the Department can take to meet the Armed Services' needs. For example, the Medium Range TRIGAT programme was initiated around 1979 and, when it was cancelled, the requirement was not expected to be met until at least 2005, 26 years later. This is equivalent to the commissioning of a weapon at the end of World War I but not receiving it until the end of World War II.

12. The Advanced Short Range Air-to-Air Missile (ASRAAM) will be required to take on the most capable systems available to potential opponents. It is 24 months late. Vice-Admiral Blackham regretted this delay, but was not surprised by it, given that the programme utilises leading edge technology. The Department needs to take a more realistic view in future of the maturity of the technology involved in a programme before committing to deliver an equipment to a given timescale.

PRIORITISING CAPABILITY NEEDS AND FUNDING

13. The purpose of the Type 45 Destroyer is to provide air defence to the fleet, for which it will deploy the Principal Anti-Air Missile System (PAAMS).[26] The Comptroller and Auditor General's report stated that the first three Type 45 Destroyers would enter service with some capability shortfalls because they had been traded-off to make the ships affordable and to enable them to be brought into service sooner.[27] In consequence, they would not have a sonar. In evidence, Vice Admiral Blackham said that he believed that a ship should not go to sea without a sonar.[28] Since the Department first started working on the Type 45 Destroyer, he had always been quite clear that a vessel which did not have a sonar was a non-deployable vessel in any but the most benign circumstances.[29] Figure 2 sets out the chronology of the decision to fit a sonar on the first three Type 45 Destroyers.

Figure 2: Chronology of developments on fitting a sonar on the first three Type 45 Destroyers when they are first built
DatePosition on fitting the sonar
22 November 2000:
The Comptroller and Auditor General's report on the Major Projects Report 2000 reported that for the first three Type 45 Destroyers the sonar capability had been omitted.
The report states that the lack of sonar could impose operational and ship scheduling constraints on the initial ships until it was fitted. For example, without sonar it was unlikely that the Type 45 Destroyers would be deployed alone to theatres where a significant submarine threat was perceived.[30]
20 December 2000:
The Department places an order for the first three ships, 'fit to receive' a sonar.
The order is in line with the specification which did not call for a sonar but called for the ships to be 'fit to receive' a sonar.[31]
Early 2001 (unspecified date before 15 January)
The Department decides fitting a sonar to the first three ships is affordable within the budget.[32]
The overall budget for the Type 45 Destroyer included provision for the fitting of a sonar under an Incremental Acquisition Plan. Until the Demonstration and First of Class Manufacture contract was placed the Chief of Defence Procurement did not know whether funding headroom would be available early enough to allow the sonar to be fitted on build to the First of Class vessel.[33]
15 January 2001
Vice Admiral Blackham confirms that it was the plan that the first Type 45 Destroyers would enter service with an Anti-Submarine Warfare sonar fitted.[34]
Vice Admiral Blackham states that he had never been prepared to send any ship to sea without a sonar,[35]and agrees that the sonar is a vital part of a ship, without which a ship should not be accepted at all.[36]
The Chief of Defence Procurement admitted that the words in the Comptroller and Auditor General's report concerning the fitting of a sonar to the Type 45 Destroyer had hit home inside the Department and had caused the Department to have a rethink.[37] He said that the horrific reality of the report helped all of them in the Department to reconsider their view.[38] The Department did not need to take a final view on fitting a sonar at the stage he placed the order but he needed to get the prime contract rolling because that started design of the ship and otherwise the ships would be late.[39]
The Chief of Defence Procurement confirmed that the sonar would cost about one and a half per cent of the ship price[40] and assured us that it had been affordable within the budget and there had been no cuts elsewhere in order to make the sonar affordable.[41]


14. Vice Admiral Blackham was asked what sort of sonar the Type 45 Destroyers would have when they entered service.[42] He said that the Department had been giving thought to the possibilities and had a range of choices including various off-the-shelf sonars and sonars in the Royal Navy's own ships which were becoming redundant as the ships were paid off. Our predecessors asked whether it was going to be effective in every theatre against every perceived threat,[43] and were assured that whichever sonar the Department chose would be effective and value for money. As the Customer, he was not interested in having a sonar which was unable to cope with the sorts of submarine threats that the Royal Navy might face. Off-the shelf sonars were widely fitted in the ships of a large number of nations and sonars from ships that were being paid off were not necessarily redundant and were widely fitted in ships which would continue in service.[44]

15. Following the United Kingdom's withdrawal from Medium Range TRIGAT, the Army is conducting an Anti-Armour Balance of Investment study to establish the capability its mechanised and armoured battlegroups required from short, medium and long-range anti-armour systems. The Department considered the possibility of conducting the study before approval was given to join the industrialisation and production phase of Medium Range TRIGAT in June 1999 but, at the time, decided that this was unnecessary.[45] Since there had been doubts about the suitability of Medium Range TRIGAT for some time, the Department was asked why it had not conducted the Balance of Investment study earlier, which might have pointed to an earlier and cheaper withdrawal. The Department said that in 1999 it had only 12 months previously completed the strategic defence review which confirmed the place of Medium Range TRIGAT, but agreed that it should have conducted the study earlier.[46]

16. Asked what advantage there was to the Armed Services in delaying Brimstone in order to align its deployment with the Tornado GR4 Package 2 update, the Chief of Defence Procurement said that the Department started the Brimstone programme on the basis that the Harrier GR7 would be the lead aircraft in terms of introducing its capability. Brimstone required a digital databus and the Department had had some difficulty in sorting out how to fit the equivalent of a digital databus in the Harrier GR7. Delays to the Harrier modification programme became such that it was clear that the Tornado was going to be the first aircraft capable of introducing Brimstone into Royal Air Force service. The Chief of Defence Procurement said that the advantage to the frontline forces lay in reducing the delay for Brimstone's introduction into service by choosing the Tornado rather than the Harrier. [47]

17. The Chief of Defence Procurement agreed that Brimstone could potentially be deployed and used on the Tornado without the Package 2 update, but the weapon's effectiveness would be much reduced and the pilot's workload much increased.[48] The decision that it was not a sensible proposition to put Brimstone on Tornado before the Package 2 update was taken by the Customer organisation in consultation with the user.[49]

18. Delays to Brimstone will cost the Department around £48 million in total.[50] The additional costs reflect the fact that, while the Department was procuring a new weapon (Brimstone) which should have come into service earlier, it was upgrading equipment (BL755) and buying a weapon off the shelf (Maverick) to plug a capability gap. Asked why the upgrade to BL755 for Kosovo was twice as costly as it would otherwise have been, the Chief of Defence Procurement replied that there was a proportionately higher cost to upgrading a smaller proportion of BL755s,[51] and the original contractor who produced the fuse sensors had stopped manufacturing them.

19. In summer 2000, the Department decided to reduce the number of Brimstone missiles it required by 25 per cent.[52] The Chief of Defence Procurement confirmed that the contract was effectively a fixed price contract for a fixed number of missiles.[53] Pressed on whether this meant that the Department would not get any saving, he said that the Department was in discussion with industry over the level of savings that might be realised from the reduction in missile numbers. It was a package deal contract rolling up both development and production and he told the Committee that there would be no saving in the research and development component of the contract which was something approaching 50 per cent of the total contract price. This meant that on a pro rata basis the Department would at best save about half the price.[54] The Department hoped to conclude its discussions with industry shortly.[55]

20. In September 2000, the Department placed an order for Maverick G missiles.[56] Asked why it did not decide to buy Maverick earlier to fill the capability gap caused by the delay of Brimstone instead of upgrading BL755,[57] the Chief of Defence Procurement said that at the time the Department decided to upgrade BL755 Brimstone's in-service date would have been closer, but the Brimstone in-service date (currently October 2002) had slipped.[58]

21. Asked whether it had wasted money upgrading BL755 because it had less than 5 per cent of the capability of Brimstone against modern tanks,[59] the Department said that it was extremely useful against soft skinned targets, such as patrol cars and missile launching vehicles.[60] The Chief of Defence Procurement said that the Department was now beginning to think that BL755 would not be phased out when Brimstone came into service because its usefulness against such targets meant there was a long term prospect for it.[61]

22. Asked how much less effective Sidewinder was compared to the Advanced Short Range Air-to-Air Missile (ASRAAM). Vice Admiral Blackham responded that ASRAAM was a short-range missile designed to be very agile against other high performance fighters. Sidewinder was predominantly an infrared-seeking weapon[62] but it was not out of date[63] and the Department did not plan to dispense with the AIM 9 Sidewinder.[64] Rather, the United Kingdom planned to go on using it in a range of roles for which it was suitable for another 20 years, as did the United States.[65] Thus the Department would have a combination of Sidewinder missiles and ASRAAM missiles.[66]

23. The Department was asked to explain why a generic air-to-air missile was no longer deemed to be a necessary part of the Apache Attack Helicopter requirement. In reply, Vice Admiral Blackham said that the Apache was part of an integrated Air Defence Programme aimed at defending the airspace within which United Kingdom Forces were going to operate, and it would fly within an overall air defence umbrella. As a result of studies the Department had done it had concluded that the air-to-air missile was not needed and that the money that might have been spent on the missile was better invested in other parts of the United Kingdom's overall air defence capability.[67]

24. The cost of the Eurofighter programme has been reduced by £32 million after the military Customer decided that the gun was no longer required.[68] The reasons for deleting the requirement for a gun on Eurofighter are set out in Figure 3. Summarising the arguments, Vice Admiral Blackham said that the Department had concluded, in consultation with the Royal Air Force that, in the future operational roles for which Eurofighter was required, the minimal value of a gun was more than outweighed by its considerable disadvantages and associated costs.[69] He said that the Department never judged something against not having it, but against what other things it could do with the money.[70] In this case, the Department could spend its money better elsewhere.[71]

Figure 3: Reasons for the deletion of the requirement for a gun on Eurofighter
ReasonSupporting evidence
Eurofighter's long range capability should be emphasised To perform its role effectively, Eurofighter's armaments should emphasise not the very short-range capability that gun would offer, but the long-range capability to be offered initially by the Advanced Medium-Range Air-to-Air Missile (AMRAAM) and later by the Meteor beyond visual range air-to-air missile.[72]
In short-range engagements, the minimum range capability and agility of the missiles that Eurofighter would carry, together with its planned helmet-mounted sight targeting system, offered the pilot a shot with a high probability of success in almost every conceivable situation. ASRAAM had already proved itself against typical countermeasure and was designed to overcome extreme levels of countermeasures.[73]
There is not a satisfactory use for a cannon.[74] The Department looked very hard at what the benefits of the gun were, using real scenarios, and had not found very many.[75] A gun could be seen as a defence of last resort when all the aircraft's missiles had been fired or should advanced hostile aircraft have decoyed Eurofighter's air-to-air missiles successfully. However, even in these scenarios the gun's usefulness would be severely limited because of the possibility of engagement by missile armed aircraft from well outside the gun's range. If a United Kingdom pilot closed on a hostile target to within the range of a gun, he would be placing the aircraft and himself at unnecessarily high risk of being shot down by the hostile aircraft's missiles.
Guns have not been used very much in recent operations To the best of the Equipment Capability Customer's knowledge a gun had been used by a fighter aircraft on only two occasions in the last 10 to 15 years, during the Gulf War when an A10 used a gun against a helicopter.[76]
Guns cause additional stress and wear for the aircraft and require additional training[77] Using its normal techniques for analysing scenarios, the Department had found a number of disadvantages caused by the gun including recoil shock effects on the aircraft's electronics, corrosive effects from the gun's exhaust gases, additional fatigue in the airframe and added substantial training requirements.[78]

25. Given what the Department had said about the cannon on the Eurofighter, our predecessors asked for a list of other air forces which were buying fighters without a cannon.[79] The Department responded that our partner nations intended to retain the gun on Eurofighter. The American F-14, F-15, F/A-18 all had internal guns and the F-22 was planned to have one, though the F-117 did not have a gun. The Russian MiG-29 and the Su-27/31 also had guns as did Gripen and Rafale. The Department noted that some of these aircraft entered many years ago when missile technology was far less advanced and it was not currently planned to fit an internal gun to the Short Take-Off and Vertical Landing variant of Joint Strike Fighter. This variant of the Joint Strike Fighter would be able to carry an externally mounted gun which could be put on and removed from the aircraft for particular missions.[80]

26. The Type 45 Destroyer's main gun armament will meet some, but not all, of the Navy's requirements and was not seen as a long-term solution.[81] Asked why this was so, Vice Admiral Blackham said that the main purpose of a gun on a ship of this sort was to provide naval gunfire support to troops ashore. This was an Army requirement, not a naval requirement,[82] and it lay within the battlefield engagement part of his organisation to decide how this was best met. One of the things his Equipment Capability Customer organisation had been established to do was to take a view across the whole of defence activity and to conduct balance of investment exercises. These were being conducted to look at the range of weapons, shipborne, airborne and landborne which could contribute to fire support for the troops. Vice Admiral Blackham said that the reason they had not been started earlier was because his organisation was only set up in October 1999.[83]

27. Whilst the Navy would like to be able to provide gunfire support with long-range guns and heavier, more precise ammunition, Vice Admiral Blackham was not yet convinced that that was the best answer. It would only be when the full balance of investment into the ways in which support was applied to troops had been completed that he would be sure about the best mix of weapons to meet the task.[84] The intention was that there would be a gun on the Type 45 Destroyer, but whether it would be the same gun which would be installed in all the ships for their entire life, until about 2040, he could not say. It would be extraordinary if the Type 45 Destroyer had not had a large number of changes to its weapons systems in that time.[85]

Conclusions

28. There was confusion between the Capability Customer and the Defence Procurement Agency over the fitting of a sonar to the first three Type 45 destroyers. The Department only recognised the lack of sonar as a fundamental issue when it was highlighted by the C&AG's report. The Committee finds it difficult to understand how the planning for these ships could exclude such vital pieces of kit and views with concern that such a possibility could have been seriously considered. The Committee therefore recommends that the Department should review the arrangements for communication between the Equipment Capability Customer and the Defence Procurement Agency to ensure that those arrangements can be relied on to convey exactly what is required.

29. The Chief of Defence Procurement said that the sonar was being procured because of the headroom provided by the lower than expected contract price secured on the prime contract. The statement implies that, if the contract price had been a few per cent higher, there might have been no sonar. Vice Admiral Blackham suggested that, if necessary, he would have looked to make the sonar affordable from elsewhere in his budget. That is not satisfactory and the Customer Capability organisation needs to develop a rigorous approach to planning capability which will ensure that key requirements such as the Type 45 sonar are given the budget priority which Vice Admiral Blackham suggests they warrant.

30. Several different sources are being considered for the Type 45 Destroyer sonar, including off-the-shelf procurement of an existing sonar or the re-use of sonars from ships which have been withdrawn from service. Vice Admiral Blackham assured our predecessors that, whatever sonar was fitted to the Type 45, it would be cost-effective and capable of deployment in all theatres. The decision to fit the sonar must not delay the entry into service of the badly needed improvement in the anti-air warfare capability of the Royal Navy which the Type 45 Destroyer will provide.

31. The Department has not always undertaken the right analyses at the right time. It accepts, for example, that it should have undertaken a study on anti-armour weapons before committing to industrialisation and production of Medium Range TRIGAT, rather than after the subsequent decision to withdraw. For the future, the Equipment Capability Customer organisation needs to specify the appropriate stage for such analyses at the outset, and ensure their more timely completion.

32. The Department's strategy for meeting its anti-armour weapon requirements appears to have evolved incoherently over time and with cost penalties. The Department paid a premium of around double the unit cost of an earlier order to upgrade additional BL755 cluster bombs for the Kosovo campaign, reduced the number of Brimstone missiles being procured with no prospect of a proportional saving in price, and purchased Maverick missiles at extra cost. The Equipment Capability Customer should make timely judgements on the number and mix of weapons required to enable cost effective procurement and avoid such cost penalties.

33. In the airborne anti-armour role, the Department suggested that three weapons would have a part to play in future, the existing RBL755, and the new procurements of Brimstone and Maverick. Similarly, the new ASRAAM missile and existing Sidewinder missile will be used side-by-side for the next 20 years. In reaching such judgements, the Department should quantify the cost and operational merits and drawbacks of operating such mixed inventories.

34. The United Kingdom's Apache helicopters will not be fitted with an air-to-air missile because the Equipment Capability Customer decided that procuring an air-to-air missile would not be the best use of resources given the other air defence assets available. Similarly, the Customer considered when suitable aircraft platforms would become available in deciding to reschedule the Brimstone missile. The Customer should take a similarly holistic view in identifying how best to meet other capability needs, and should adapt its arrangements for evaluating future needs so as to embed this good practice.

35. Eurofighter will enter service with the Royal Air Force without a gun because the Department has decided to delete the requirement, saving £32 million. The Department put forward persuasive operational arguments to justify the decision not to fit a gun. To remove any doubt about the decision to delete the gun, it would be wise for the Department to cross-check why our Eurofighter partner nations are still fitting the gun and why other countries fit guns to their aircraft.

36. The Equipment Capability Customer is conducting a Balance of Investment study looking at what mix of air-, land—and sea-based weapons could best meet the Army's long range fire requirement. The Customer will make a final decision on the type of gun to be fitted to the Type 45 Destroyer once this study is completed. The Customer should ensure that the timing of this decision does not adversely affect the timescale for the design and production of the Type 45 Destroyer.


1  This report is based on two days of evidence and is complemented by another (5th Report of the Committee of Public Accounts - MOD Major Projects Report 2000 (HC 368 (2001-02)) Back

2  C&AG's Report (HC 970 Session 1999-2000), Executive Summary para. 1 Back

3  ibid, Executive Summary para. 2 Back

4  At this session we also drew on evidence on the four case studies from the C&AG's Report on the Major Projects Report 1999 (HC 613 Session 1998-1999)  Back

5  Q260 Back

6  Q123 Back

7  5th Report from the Committee of Public Accounts (HC 368 (2001-02)) Back

8  C&AG's Report (HC 970 Session 1999-2000), Executive Summary para. 6 Back

9  C&AG's Report, Executive Summary, para.7 points (ii) and (iv) Back

10  C&AG's Report, page 12 Figure 10 Back

11  Q269 Back

12  Q257 Back

13  Q261 Back

14  Q95 Back

15  Q97 Back

16  Q94 Back

17  Q96 Back

18  C&AG's Report, Figure 1 Back

19  ibid, Figure 12 Back

20  Q107 Back

21  C&AG's Report, Figure 10 Back

22  Q215 Back

23  Q216 Back

24  Q217 Back

25  Q215 Back

26  Q18 Back

27  C&AG's Report, para 3.14 Back

28  Q125 Back

29  Q20 Back

30  C&AG's Report, para 3.14 Back

31  Qs 121, 122 Back

32  Qs 147, 155 Back

33  Q152 Back

34  Q21 Back

35  Q31 Back

36  Q161 Back

37  Q26 Back

38  Q122 Back

39  Q151 Back

40  Q44 Back

41  Q119 Back

42  Q20 Back

43  Q22 Back

44  Q23 Back

45  C&AG's Report, para 3.18 Back

46  Q16 Back

47  Q173 Back

48  Q174 Back

49  Q175 Back

50  C&AG's Report, para 3.9 Back

51  Q143 Back

52  C&AG's Report, para 3.8 Back

53  Q176 Back

54  Q177 Back

55  Q178 Back

56  C&AG's Report, para 3.5 Back

57  Q12 Back

58  Q14 Back

59  C&AG's Report, para 3.3 Back

60  Q55 Back

61  Q61 Back

62  Q274 Back

63  Q276 Back

64  Q217 Back

65  Q276 Back

66  Q215 Back

67  Q213 Back

68  C&AG's Report, para 1.12 Back

69  Evidence, Appendix 2, pp 37-38 Back

70  Q304 Back

71  Q306 Back

72  Evidence, Appendix 2, pp 37-38 Back

73  ibid Back

74  Q254 Back

75  Q304 Back

76  Q214 Back

77  Q214 Back

78  Q214 Back

79  Q264 Back

80  Evidence, Appendix 2, p38 Back

81  C&AG's Report, para 3.15 Back

82  Q127 Back

83  Q75 Back

84  Q127 Back

85  Q131 Back


 
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