Examination of Witnesses (Questions 260
WEDNESDAY 17 JANUARY 2001
WALMSLEY, KCB AND
260. If I gave that impression I did not intend
(Vice Admiral Sir Jeremy Blackham) As I said, of course
I regret it. My organisation stood up a year ago as part of a
process to improve the way we are doing this. I am confident that
we are doing that. I cannot defend mistakes that were made in
the early 1990s. It is always a matter for concern when the necessary
capability does not appear on time.
261. It seems to me we are always in the situation
where if we were confronted with a really serious military situation
at this point in time, and it still applies if you look at this
list, there are enormous areas where we lack the capability of
giving support to our troops, the assistance to our troops and
our servicemen that they are entitled to require.
(Vice Admiral Sir Jeremy Blackham) I am not sure I
accept that. You already mentioned the most likely operations
we are conducting. The fact is they have all been conducted with
great success and an extraordinary small casualty rate.
262. They have all been conducted under the
umbrella of massive American air support and systems support and
intelligence support. It would be ludricous for us to pretend
that we are in any wayyou are not doing thisadequate
in our own rights. In the situations we have been involved in
it has not been because of our technical ability that we have
come out with as few casualties as we have.
(Vice Admiral Sir Jeremy Blackham) We always planned
to fight with the highest range of allies, and most frequently
with the United States. Certainly I am clear from my own contacts
they greatly value the contribution we make.
263. They are always on about burden sharing.
They are glad to see us spending more. They are pressing the Europeans
to spend more, they just do not want us to spend in a way they
feel might be independent of themselves. As you know, within the
NATO context there are ludricous propositions, anyhow, and we
would still be dependent on the Americans there. The fact they
are glad of what they get does not mean to say they do not want
a heck of a lot more and better quality.
(Vice Admiral Sir Jeremy Blackham) We all want better
quality and, indeed, we are trying to get it. I am quite confident
that the arrangements we put in place will ensure we have much
better results in the future.
264. Given what you said about the cannon and
the Eurofighter, given the Americans have been through this with
their fighter system, could you let us have a list of any other
air forces who are buying fighters without cannon, Sir Robert?
(Sir Robert Walmsley) Within our capability.
(Vice Admiral Sir Jeremy Blackham) I
do not think we can give you the reasons for it.
Chairman: Leave the deductions to us.
265. Looking at the Report and looking at the
conclusions on page 2 it is not very impressive, is it, it is
not very inspiring, is it, for the National Audit Office to come
up with these conclusions. If we look at paragraph 7, for example,
it says that the average project delay is getting longer, slippage
will increase, the risk that the department allowed for improval
will materialise. In (iii) it says, "Most projects are expected
to meet the military requirement". What is the point if they
(Sir Robert Walmsley) Mr Steinberg, I am entirely
satisfied that it is your right to take your view of this paragraph,
but for me a paragraph which says there are signs we are getting
costs under better control, that is based on an actual cost reduction
this year in the cost of our projects. That does go on, as I readily
acknowledge, to talk about delays getting longer. I can go into
the detail of the six projects that slipped this year in as much
detail as you like, and then go on to say that projects are expected
to meet the military requirement. To me this is getting a little
bit close to two out of three is not too bad but the third one
is no good. I accept that we have to do better on time.
266. Answer the question regarding the projects
expected to meet military requirements? As I say, what is the
point? It should say, "Every project should meet military
requirements", not "expected to". What is the point
in having something if it does not have a military requirement?
(Sir Robert Walmsley) Each project has ten key user
requirements attributed to it. As part of the audit that went
about preparing this report, for the first time ever, actually,
the NAO looked at the justification for whether these ten key
user requirements would be satisfied. That has not been done before.
Is there evidence sufficiently available to predict that. They
found on all 20 of the major projects, bar three exceptions, the
projects are expected to meet their key user requirements. By
expecting it is not as it is required to be, it means they are
predicted to be
267. I am not convinced. It seems to me every
project should meet the military requirement, otherwise there
is no point in having it and you are wasting your money if they
(Sir Robert Walmsley) We have had a whole hearing
on the importance of the acceptance process. I think we know from
the statistics in that report that quite often projects do not
meet all their key military requirements. Indeed, that may be
quite sensible if, in fact, one turns out to be simply unachievable
within the state of technology at the time. I do not think it
is self-evident that every requirementand there are 14,000
requirements associated with an Astute Class Submarinehas
to be met, which is why we drilled it down to ten key user requirements.
268. Looking at (vi), again it is not very inspiring,
is it? "On some projects there are substantial cost and time
variations from approval, which leaves scope for improvement."
If I was a head teacher reading that I would have written, "Four
out of ten, see me". Then we go back to (iv) "Delays
have led to capability shortfalls on many projects". Following
on from what Mr Williams said, I think the way the Vice Admiral
answered that was complacent, to be quite honest, he was making
light of it. If you look at the figure which has been referred
to on a number of occasions, and that is the one on page ten here,
you can see, for example, there has been a considerable affect
on capability. You only have to look at some of the ones that
have already been mentioned, look at the HVM and read that, "The
delay in HVM ISD from December 1990 to September 1997 resulted
in the first (UK) Armoured Division having no specific Very Short
Range Air Defence capability". If you look at Spearfish,
"The delay to Spearfish ISD from 1987 until 1994 resulted
in a significant and extended capability gap in anti-submarine
warfare and anti-surface warfare". If you look at ASRAAM
it says, "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." If you
go on to the Nimrod, "The slip will delay the introduction
of the improved Anti-Submarine and Anti-Surface Unit warfare capability".
If you go to the Merlin it says, "The delay to the ISD 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." That sounds horrendous. For a layman like me, who does
not have a clue about defence, and I read a report like this,
I say to myself, we are lying in fear in our beds at night because
we are not defended.
(Sir Robert Walmsley) Admiral Blackham will speak
about complacency, or otherwise. I would just like to make a very
important point, quite a bit of this report has for me had a huge
welcome focus on what has happened in the last 12 months. There
has been a deliberate effort by the NAO, they said so in the report.
Half, I think, of the projects you instanced, take Spearfish delays
from 1987 to 1994, I remember personally authorising the out load
of those four Spearfish torpedoes into HMS Vanguard. It met the
requirement of allowing our first Trident submarine to deploy
across the Atlantic to test flight missiles in time. That is all
history now and there is nothing I can do to rewrite it.
269. Do not get me wrong, I am not criticising
yourself or Vice Admiral Blackham at all, because this has been
going on for nigh on 20 years. The incompetence basically started
20 years ago when we had another government. I am not at all blaming
you. All I am saying is that for a layman like myself to read
a report like this it seems to me there is a huge gap in our capability,
which has been going on for many, many years.
(Vice Admiral Sir Jeremy Blackham) I must just say
on the complacency point, if only because a number of my constituents
will read the report, if I gave the impression I was complacent
then I am very much at fault. I have said on a number of occasions
that I always regret the delay of capability. Almost all of the
incidents you quoted I can do nothing about. My job is to ensure
that the situation in the future is very much improved. I am confident
we will be able to do that, together with the Procurement Agency.
The way we approach our business is quite different. I am also
gratified by the remarks in this report which show that the key
user requirements are expected to be met at 98 per cent. There
are three single requirements in the 200 in here which at the
moment we do not seem as though we are going to meet. Some of
these requirements are at the very front edge of technology and
I am not at all surprised they are difficult. I want them to be
met but I am not at all surprised that they are difficult. The
picture you paint of forces that are simply ill-equipped is simply
at odds with the facts. All our military campaignsand we
conducted a number in the last decade, which we had not to do
at all in the previous 30 yearshave been conducted with
great success, and very, very importantly, with almost no casualties,
and that by itself tells us a great deal about the capability.
270. I have written down, "We have been
successful in recent campaigns". I also wrote, "It appears
to me it is a good job that other forces had less capability than
we had or we would have been in serious trouble".
(Vice Admiral Sir Jeremy Blackham) One of our aims
is to ensure that our capability is greater than `our enemies',
that is what I am about.
271. What happens when we meet somebody who
has better capability than us?
(Vice Admiral Sir Jeremy Blackham) I need to be shown
them. I am not aware at the moment that we are faced by opponents
of that sort.
272. From the examples I read out it appears
we had capabilities in the air, in the sea and on the land. The
report we had from Monday's meetingI am not sure whether
I am allowed to go back to that againthat was an example
where the anti-tank weapon replacement is ten years late and the
present one does not meet the needs, yet the department want to
retain it. Why do you want to retain something which does not
meet the needs? Is that not just a pure waste of money?
(Vice Admiral Sir Jeremy Blackham) We do not want
to retain a system that has no capability, we want a new system.
The Milan does have a capability, but it has greater difficulty
against the most modern forms of armour, but it has plenty of
capability against anything short of that.
273. Basically what you are saying is that unless
we keep this we will have nothing and, therefore, this is better
than nothing. That is the argument. Then the report goes on to
say, "It has had no effect on the operational impact".
I find that very contradictory. If you have a weapon which cannot
meet the capability that it is meant to in the first place how
can the report then say, "It has no effect on the operational
(Vice Admiral Sir Jeremy Blackham) There will be an
impact in the delay of any new system. The question is whether
that has had an impact on the operations that are in prospect
or being done, and there has been no such effect. The Milan is
capable of dealing with the most likely threats. To use Mr Williams'
term, "We are going to meet it". It will, however, increasingly
have difficulties against the most modern and most successful
forms of armour. It is not, of course, the only anti-tank system
274. That was one example. The other example
I took at random, so to speak, was the ASRAAM. I do not have a
clue what it does, apart from the fact what it tells me it does
in the Report. I never heard of it until I read the Report. I
quoted it before, how much less effective is ASRAAM and the Sidewinder
to ASRAAM and the lack of capability in that respect?
(Vice Admiral Sir Jeremy Blackham) The particular
advantage of ASRAAM is its agility. It is a short-range missile
designed to be very agile against other high performance fighters.
Sidewinder is predominantly an infrared seeking weapon.
275. It out of date.
(Vice Admiral Sir Jeremy Blackham) ASRAAM is not out
276. Sidewinder is out of date.
(Vice Admiral Sir Jeremy Blackham) I certainly hope
not because we plan to go our using it for another 20 years, and
so do the United States.
277. I must be reading it wrong. It says, "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".
(Vice Admiral Sir Jeremy Blackham) We will go on using
Sidewinder in a range of roles which are suitable. ASRAAM we want
for, if you like, the dog-type fighting role, and I want it as
soon as I can get it.
278. Let us turn to page 8, paragraph, 1.14.
It says here, "17 out of 20 projects slip by 567 months,
an average of 28 months slippage per project". That does
not seem very good reading. Why has this happened when times were
set against the main investment point and they should be achieved
on time. Why have they not been achieved on time?
(Sir Robert Walmsley) Elsewhere in the report I think
it analyses the predominant contributors to the reasons for delay.
It is a point I made before this afternoon. Most of that delay
was reported in MPR 1999 and, indeed, all of the previous MPRs.
What is new this year is 63 months in total. I am not saying that
is good, but what I am saying is we have not suddenly produced
a delay of over 500 months in this report. The predominant cause
of delay is technical difficulties. That means that we place a
contract with industry and they find it hard to discharge their
responsibilities under the contract. That is the single biggest
reason. That is one reason. Coming back to the idea that we need
to spend more money in the assessment phase, we need to be and
we will be more cautious about accepting industry's promises.
It is not satisfactory just to contain the financial aspect, which
the cost constraints achieved do report. I accept that 5 per cent
is 5 per cent too many, but compared with the high technology
defence programmes undertaken in other countries my impression
is that 5 per cent is a record somebody would be proud of. It
does not mean that it is good, it just means it is a level of
performance we have not seen in terms of cost constraint for a
while. In terms of time that is our problem. There are many complex
reasons for that, one of them is that we underestimate the real
time that it is going to take to do. Others are to do with the
fact you can contract for performance and you can contract very,
very sensibly for price. We can constrain those two things. I
do not think it is any accident that we are predicted to meet
the performance requirements and we are not doing as badly on
costs as, perhaps, we once did. We are not doing well on time.
You cannot in English law have punitive contracts, that means
to say that the disincentive to the contractor for failing to
deliver on time is that he has to put us back into the financial
position we would have been in if he had delivered on time. That
is quite difficult to establish and takes many years, so we tend
to have a preordained formula at something like half a per cent
of the contract value per month delayed. What I do think we need
to be more careful to do is to provide contractors with incentives
to perform well. We have had a great concentration on sticks,
which I thoroughly approve of, but we need to balance that with
quite a few carrots. The Eurofighter programme includes some incentives
for doing things on time. What we have done is not manufactured
more money but we have essentially said there are retentions on
the progress payments on the contract, which we plan to withhold
to the end. If they deliver the first aircraft on time next June
then they will get a bonus and if they deliver the eighth aircraft
on time in December 2004 they will get another bonus. There is
one more figure for the final Tranche 1 aircraft, that is a new
approach to incentivise defence contractors. There are a number
of carrots we have tried to introduce. I am saying absolutely
guilty as charged on time but it is no good applying bigger sticks,
we have to find better ways to incentivise contractors to perform,
because that is where the biggest number of delays occur. I could
go on about collaborative programmes
279. Please do not.
(Sir Robert Walmsley) it would take a long
time and we have a report coming on that in a few weeks.
Mr Steinberg: He has just talked me out.
Chairman: Thank you, Mr Steinberg.
7 Note: See Evidence, Appendix 2, page 37 (PAC