Publication of the Committee's 1st Report, Session 2008-09: DEFENCE INFORMATION INFRASTRUCTURE

Publication of the Committee's 1st Report, Session 2008-09: DEFENCE INFORMATION INFRASTRUCTURE
January 15, 2009

Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:

"The Ministry of Defence's ambitious new £7 billion IT system, designed to replace hundreds of ageing existing systems, was badly planned in important respects. No proper pilot for this highly complex programme was carried out and entirely inadequate research led to a major miscalculation of the condition of the Department's buildings in which the new system would be installed.

"In addition, the ATLAS consortium implementing the project - led by EDS, a company whose track record of delivering government IT projects has not been exemplary - underestimated the complexity of the software it had agreed to create. For over two years, it was unable to deliver a system that could safely handle Secret material.

"All of these factors contributed towards major delays to the project. There has been recent progress but the rate at which terminals are being rolled-out must improve rapidly if the Department's latest deadlines are to be realistic.

"Given the scale of delay, the Department must head off the risk that existing IT systems, upon which MoD staff and military personnel rely, will fail. Detailed plans on the cost and timing of work to keep existing systems going must be developed, this planning to be funded from the management fee paid to ATLAS. And if the number of errors in the initial software design increases again, the Department must increase its scrutiny and not hesitate to turn down any claims from ATLAS for higher costs as a result."

Mr Leigh was speaking as the Committee published its 1st Report of this Session which, on the basis of evidence from the Ministry of Defence, examined the difficulties experienced on the DII Programme in the past and the measures put in place to deliver improvement in future.

The Ministry of Defence (the Department) needs high quality information technology to achieve its goals, both on operations and in the United Kingdom. It is currently replacing hundreds of existing computer systems with a single new system, called the Defence Information Infrastructure (DII). The Programme to design, install and run this is being led by the ATLAS consortium. Ultimately, the Department intends to have some 150,000 terminals supporting 300,000 users at more than 2,000 sites, with additional capability on deployed operations and Royal Navy ships. DII must be able to handle material classified as Restricted, Secret and Top Secret. The Programme began in March 2005 and will cost an estimated £7.1 billion by 2015, if fully implemented.

The implementation of DII has suffered from major delays. Whereas 62,800 terminals should have been installed by the end of July 2007, only 45,600 were in place at the end of September 2008. The main causes of delay were the Programme's over-optimistic assumptions about the condition of the buildings into which DII would be fitted, and the consequent selection of an inappropriate and unresponsive methodology for installing terminals.

The DII Programme also provides a range of core software such as word processing, email, internet access and security to run on the new system. This should all have been available in June 2006, but less than half of the requirement had been delivered two years later in June 2008. The slow pace of software design has been caused primarily by the ATLAS consortium's inability to meet the Department's requirements.

As a result of these problems, the Department's existing computer systems have had to be used for longer than intended, with the increased risk that one or more of them will fail. The forecast cost of the DII Programme has also increased by an estimated £182 million. The Department has been able to protect benefits of the Programme, totalling an estimated £1.5 billion in due course, although some benefits will materialise later than planned.

In recent months, the performance of the DII Programme has improved somewhat, with some new software having been tested and 3,400 terminals being rolled out on average each month. However, rapid improvement to 4,300 terminals a month will be needed if the Department's latest deadlines are to be met.

The Department has had a number of significant security breaches of personal data in recent years. An independent review of its data handling was held in early 2008 and the Department is in the process of implementing the recommendations.

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House of Commons, Information Technology (IT), UK MoD

Hansard: Royal Navy out-of-service dates

Warships
Mr. Jenkin: To ask the Secretary of State for Defence what the current out-of-service dates are for (a) HMS Walney, (b) HMS Penzance, (c) HMS Pembroke, (d) HMS Grimsby, (e) HMS Bangor, (f) HMS Ramsey, (g) HMS Blyth, (h) HMS Shoreham, (i) HMS Ledbury, (j) HMS Cattistock, (k) HMS Brocklesbury, (l) HMS Middleton, (m) HMS Chiddingfold, (n) HMS Atherstone, (o) HMS Hurworth and (p) HMS Quorn. [233698]

Mr. Bob Ainsworth: I refer the hon. Member to the answer I gave on 3 September 2007, Official Report, column 1632W.

Mr. Jenkin: To ask the Secretary of State for Defence what the current out-of-service dates are for (a) HMS Ark Royal, (b) HMS Illustrious, (c) HMS Invincible, (d) HMS Exeter, (e) HMS Southampton, (f) HMS Nottingham, (g) HMS Liverpool, (h) HMS Manchester, (i) HMS Gloucester, (j) HMS Edinburgh, (k) HMS York, (l) HMS Ocean, (m) HMS Albion and (n) HMS Bulwark. [233699]


6 Nov 2008 : Column 678W
Mr. Bob Ainsworth: Our present planning assumptions, which are routinely updated as required, are as follows:

Name Out-of-service date
HMS Ark Royal 2012
HMS Illustrious 2015
HMS Invincible 2010

HMS Exeter 2009
HMS Southampton 2009
HMS Nottingham 2010
HMS Liverpool 2012
HMS Manchester 2011
HMS Gloucester 2011
HMS Edinburgh 2013
HMS York 2012

HMS Ocean 2022

HMS Albion 2033
HMS Bulwark 2034

Mr. Jenkin: To ask the Secretary of State for Defence what the current out-of-service dates are for (a) HMS Argyll, (b) HMS Lancaster, (c) HMS Iron Duke, (d) HMS Monmouth, (e) HMS Montrose, (f) HMS Westminster, (g) HMS Northumberland, (h) HMS Richmond, (i) HMS Somerset, (j) HMS Sutherland, (k) HMS Portland, (l) HMS Kent and (m) HMS St Albans. [233700]

Mr. Bob Ainsworth: Our present planning assumptions, which are routinely updated as required, are as follows:

Name Out-of-service date
HMS Argyll 2023
HMS Lancaster 2024
HMS Iron Duke 2025
HMS Monmouth 2026
HMS Montrose 2027
HMS Westminster 2028
HMS Northumberland 2029
HMS Richmond 2030
HMS Somerset 2031
HMS Sutherland 2033
HMS Portland 2035
HMS Kent 2034
HMS St Albans 2036


Mr. Jenkin: To ask the Secretary of State for Defence what the current out-of-service dates are for (a) HMS Cornwall, (b) HMS Cumberland, (c) HMS Campbeltown and (d) HMS Chatham. [233701]

Mr. Bob Ainsworth: Our present planning assumptions, which are routinely updated as required, are as follows:

Name Out-of-service date
HMS Cornwall 2019
HMS Cumberland 2021
HMS Campbeltown 2020
HMS Chatham 2022

6 Nov 2008 : Column 679W

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House of Commons, Royal Navy, Type-45 Destroyer, Hansard, Type-22 Frigate, Type-23 Frigate, Type-42 Destroyer

HCDC: MINISTRY OF DEFENCE ANNUAL REPORT AND ACCOUNTS 2007-08 UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1168-i

HCDC: MINISTRY OF DEFENCE ANNUAL REPORT AND ACCOUNTS 2007-08
UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1168-i

House of COMMONS
MINUTES OF EVIDENCE TAKEN BEFORE DEFENCE COMMITTEE

Tuesday 4 November 2008

SIR BILL JEFFREY KCB and MR TREVOR WOOLLEY CB

Evidence heard in Public Questions 1 - 128

USE OF THE TRANSCRIPT
1. This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2. Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

3. Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.

4. Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.

Oral Evidence Taken before the Defence Committee on Tuesday 4 November 2008

Members present:
Mr James Arbuthnot, in the Chair
Mr David Crausby
Linda Gilroy
Mr Dai Havard
Mr Adam Holloway
Mr Bernard Jenkin
Mr Brian Jenkins
Robert Key
Richard Younger-Ross

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Financial Results, House of Commons, UK MoD

House of Commons: Defence Equipment: Procurement

House of Commons: Defence Equipment: Procurement

Mr. Hancock: To ask the Secretary of State for Defence which 10 companies have supplied his Department with the most equipment in the last 12 months; and what the UK-based workforce is of each company. [222340]

Mr. Bob Ainsworth: This answer takes “most equipment” to mean the total value of assets delivered, as it is a more relevant measure than volume or quantity. The 10 companies that received the highest total direct payments(1) from the Ministry of Defence during financial year 2007-08 in respect of equipment procurement, along with the approximate number of UK-based employees of each company, are shown in the following table.

6 Oct 2008 : Column 250W

Company Employees( 2)

BAE Systems plc 34,000

Thales 9,000

EDS Defence Limited 16,500

The Boeing Company 600

Westland Helicopters Limited (3)3,500

Devonport Royal Dockyard Limited (4)7,200

MBDA UK Limited 2,600

Europaams SAS Nil

General Dynamics UK Limited 1,700

Raytheon Systems Limited 1,300

(1) Expenditure excludes payments made through other nations or international procurement agencies on behalf of the Ministry of Defence.
(2) Employee numbers are based on information provided by the companies and BERR.
(3) Westland Helicopters Ltd: Employee numbers refer to the UK based employees of parent company Agusta Westland.
(4) Devonport Royal Dockyard Ltd: Employee numbers refer to the UK based employees of Babcock Marine which includes Devonport Royal Dockyard Ltd.

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House of Commons

Response to "indecision time in defence" blog entry by Conservative MP Douglas Carswell

With regard to the item "indecision time in defence" written by Conservative MP Douglas Carswell, The purpose of defence is to deter (i.e. not to start from a position of "choosing which wars to fight"). Deterring potential aggressors requires the investment in capabilities to put them off of doing wrongful things.

Capabilities require an industrial base capable of providing them - what is the point of knowing the problem but being unable to address it ? Defence Industrial Strategy (DIS) was all about matching industrial capabilities to defence needs and further enhanced with the Defence Technology Strategy (DTS - identifying R&D priorities in support).

Criticising procurements such as the Eurofighter Typhoon aircraft at the superficial level is all too easy. However it is with no small sense of irony to note that the Eurofighter contract was so tightly written because of the propensity of politicians to change their minds causing chaos for the military and industry.

The Future Aircraft Carrier (CVF) is regarded a key to projecting military capability around the world to protect British interests in an era of globalisation - is this not the logical product of reviewing British foreign policy interests and defence needs ?

Lastly, with regard to buying the best kit in the world, there is an implicit assumption that overseas developed military equipment is superior - interesting that the USA is buying defensive electronics and means to combat improvised explosive devices (IED's) from the UK by the bucket-load.

To suggest the military and MoD lack clarity is perhaps a reflection of the broad failure both of politicians in government to manoeuvre as circumstances change but also of the opposition for choosing to be shrill about defence rather than pursuing a more detailed analysis and critique of the subject as best befits the role of the Opposition.

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Editorial, House of Commons, Douglas Carswell MP

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Conservative Party

Written ministerial statement: Project MASS

Written ministerial statement: Project MASS

The Parliamentary Under-Secretary of State for Defence (Derek Twigg): I am pleased to announce that on 20 August we signed a 15-year partnering agreement with BAE Systems Land Systems Munitions (BAES LSM) for the future supply of general munitions to the armed forces. This is the first opportunity since contract signature to inform the House.

The new contractual arrangements have been developed under the umbrella of Project MASS (Munitions Acquisition—The Supply Solution), which is a key strand for delivering the defence industrial strategy (DIS) within the general munitions field. The contractual partnering agreement is underpinned by a broader non-contractual strategic partnering arrangement between BAES LSM and the MOD for the longer-term delivery of joint objectives in the munitions sector.

At present, 80 per cent., by value, of the general munitions used by the armed forces for frontline operations and training are procured from BAES LSM under a contract due to end in 2010. The new, innovative partnering agreement will continue to cover about 80 per cent. of the general munitions requirement, including small arms and medium calibre ammunition, mortar shells and artillery shells and will ensure continuing security of supply for a minimum of 15 years. The new agreement, which is worth at least £2 billion and, depending on the level of demand, potentially in excess of £3 billion, also incentivises BAES LSM to deliver a modern, world class industrial base.

This is excellent news for defence. Not only will the new arrangements deliver a long-term, secure supply of battle-winning munitions for our armed forces, it will also ensure that the UK retains an important sovereign capability, directly sustaining some 1,700 UK jobs.

It is also excellent news for BAES LSM, and for their highly skilled workforce in the north of England and south Wales, who are to be commended for their continued commitment and contribution to our efforts in Afghanistan and Iraq, under the current arrangements. During this period of high demand, the company has stepped up production to meet the challenge, providing up to 1 million rounds of small arms ammunition a day from their manufacturing facility at Radway Green, near Crewe.

Our new partnering agreement with BAES LSM is an important milestone in the implementation of the defence industrial strategy, which is providing a framework for real change within the defence industry and its relationships with the MOD.

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BAE Systems, Logistics, UK MoD

HM TREASURY: MAKING CHANGES IN OPERATIONAL PFI PROJECTS

HM TREASURY: MAKING CHANGES IN OPERATIONAL PFI PROJECTS

Publication of the Committee's 36th Report, Session 2007-08

Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:

“Whether a PFI contract constitutes good value for money for the taxpayer depends not only on the terms of the deal originally struck with the private sector, but also on how well that contract is subsequently managed by the public sector authorities over the next 25 to 30 years.

“The evidence is that many public sector authorities are not doing a good job of managing operational PFI deals. Many contract managers do not have enough commercial expertise and the management of the contract is frequently not sufficiently resourced. An NAO survey has revealed that more than 15 per cent of the PFI projects examined are not being managed on a full-time basis.

“This is particularly worrying where changes are being made to the services and assets provided, at a cost to the taxpayer in 2006 of £180 million.

“Public sector authorities must keep the incumbent private sector contractors on their toes by, wherever appropriate, making proposed changes costing over £100,000 subject to competition. The authorities should refuse demands by the private sector to pay unjustified additional fees for processing change requests. And the public sector needs centrally provided guidance on what prices are reasonable for common minor changes to projects.”

Mr Leigh was speaking as the Committee published its 36th Report of this Session which examined the staffing and management of changes, the reasons for not putting larger changes out to competitive tender, the charging of management fees by Special Purpose Vehicles (SPVs) and the value for money of small changes, the cost of which varies substantially for similar work.

Under the Private Finance Initiative (PFI), the public sector enters into a long-term contractual arrangement with private sector companies to design, build, finance and operate an asset such as a hospital or school. There are now over 500 operational projects with a combined capital value of £57 billion and future payments amount to £181 billion (a present value of £100 billion).

It is inevitable, over the course of 25 to 30 years of operation, that changes will be needed to the services and assets provided under operational PFI projects. In 2006, some £180 million was spent on changes, but there were large variations in the extent of management resource both for PFI contracts of a similar size and for making changes of the same cost. Furthermore, a third of contract managers at PFI hospitals and one in six contract managers of PFI schools surveyed by the National Audit Office described their teams as under-resourced, and 15% of PFI projects were not being managed on a full time basis, which is a clear risk to value for money.

Major changes costing £100,000 or more accounted for 90% of the total value of changes to PFI projects in 2006. Nearly 30% of major changes which could have been competitively tendered, were not.

The companies involved in a PFI deal establish a separate company, known as a Special Purpose Vehicle (SPV), to manage the project, including any competitive tendering for new work. For most small changes, SPVs simply act as conduits, passing requests for changes from the public sector authority to the facilities management provider and back again. However, many SPVs charge additional management fees for processing change requests. These fees have ranged from 2% to 25%, adding an estimated £6 million to the cost of changes made in 2006.

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House of Commons, Public Accounts Committee, PFI-PPP

Defence Committee: Publication of the Defence Committee's Thirteenth and Fourteenth Reports

Defence Committee

Session 2007-08, 22 July 2008

Publication of Reports
Publication of the Defence Committee's Thirteenth and Fourteenth Reports
The Defence Committee will be publishing its Fourteenth Report of Session 2007-08, Recruiting and retaining Armed Forces personnel, HC 424, on Wednesday 30 July 2008 at 00.01 hrs, with embargoed copies available from 11.00 hrs on Tuesday 29 July 2008.

The Defence Committee will be publishing its Thirteenth Report of Session 2007-08, The contribution of Unmanned Aerial Vehicles to ISTAR capability, HC 535, on Tuesday 5 August 2008 at 00.01 hrs, with embargoed copies available from 11.00 hrs on Monday 4 August 2008.

NOTE FOR EDITORS:

The Committee was nominated on 13 July 2005. The Defence Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Ministry of Defence and its associated public bodies.

Defence Committee: Publication of Report: SITUATION IN IRAQ IMPROVING AND UK DOING A VITAL JOB

Session 2007-08, 22 July 2008

Publication of Report
SITUATION IN IRAQ IMPROVING AND UK DOING A VITAL JOB, SAY MPs
The security situation in Basra has been transformed in the past six months and the UK is helping the Iraqi Security Forces become self-sufficient and effective, according to a Report published today by the House of Commons Defence Committee (Fifteenth Report of Session 2007-08, UK operations in Iraq and the Gulf, HC 982).

The Committee visited Iraq and the Arabian Gulf in June 2008 and found increasing security and stability being established in and around Basra. The Iraqi-led Operation Charge of the Knights has dealt a severe blow to the insurgency in southern Iraq, and with increased stability are coming the first steps in economic recovery and development. The UK contributes to military, naval and police training teams which are helping to build up the capabilities of the Iraqi Security Forces. This is now the most important task for UK Forces in Iraq and the Ministry of Defence will have to consider how best to maintain the activities of the training teams as it plans its future presence in the region.

UK Forces also perform a vital role in protecting Iraq's oil infrastructure in the Gulf. Oil is the key to the future prosperity of Iraq, and helping the Iraqis ensure stability and security in the Gulf is a vital role for the Coalition. The Committee pays tribute to the work that UK Service personnel are doing and recognises the often difficult, sometimes dangerous and always delicate nature of operations in that area.

Commenting on the Report, Committee Chairman Rt Hon James Arbuthnot MP said:

"We have visited Iraq regularly as part of our scrutiny of the UK deployment there, and this year the security situation in Basra is a world away from what we saw last year. The Iraqi Security Forces have restored law and order to many parts of the city and the UK is working with them now to safeguard that stability and develop their capabilities. That will need a continuing commitment from the UK to maintain a military training presence in Iraq.

The cornerstone of Iraq's prosperity and security is economic development. Iraq is not inherently a poor country, but the UK and the rest of the Coalition must help Iraq develop its economy and infrastructure to reap the benefits of its natural resources."

NOTE FOR EDITORS:

The Committee was nominated on 13 July 2005. The Defence Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Ministry of Defence and its associated public bodies.