16 Nov 15. Last week ‘The Times’ published an interesting article suggesting that in return for the Treasury giving its support to Successor, the Trident nuclear submarine replacement programme, the Chancellor of the Exchequer had demanding that responsibility for the programme should be moved from the Ministry of Defence to a new body that would report direct to HM Treasury.
The new ‘body’ is thought to be the now merged Major Projects Authority and Infrastructure Projects Committee and that was formed for the purpose of speeding up delivery of capital programmes. Following the Times article I am told that senior military officers are not amused and that both uniformed and non-uniformed personnel attached to the Successor programme in both MOD Main Building and Abbey Wood are equally bemused at the notional idea of moving Successor delivery responsibility to a group that currently has little comprehension of nuclear submarine delivery. The US, on whom we rely for the Trident weapons, may not be amused either at the thought of programme knowledge being spread outside the confines of defence.
‘The Times’ article, no doubt the result of a deliberate leak on the part of the Treasury, is I understand perfectly correct. Apparently the Chancellor of the Exchequer, George Osborne takes the view that the Ministry of Defence lacks necessary skills to ensure that the four new Successor class submarines will be complete by the planned date of 2028 when the existing fleet of four Vanguard class Ship Submersible Ballistic Nuclear (SSBN) submarines need to be withdrawn. Industry will of course do what the Government decides and is unlikely to involve itself in this debacle. One thing that can be said with certainty though is that no matter who is put in ultimate charge of the Successor programme there is no question of the UK being without a continuous-at-sea-deterrent nuclear capability at any time during the period of Successor build and commissioning into service.
While there has been no criticism from the Treasury in respect of Successor design work that is currently being undertaken by BAE Systems and Rolls-Royce my information suggests that the expressed concerns of the Treasury are to do with slow progress made on issues such as infrastructure and testing requirements, production engineering, organisation together with agreeing levels of engineering, skills and people requirement. Successor is undoubtedly a huge project and it may well be that MOD and industry have indeed been slow in working out and finding solutions to certain issues. Even so, in order to ensure absolute risk avoidance industry has no choice but to follow the customer, in this case the MOD. As far as I am concerned switching the pilot authority from one that has already garnered a considerable amount of experience in nuclear submarine procurement and build issues to one that has no experience of this complicated subject at all hardly sounds like a very good idea.
While it can hardly be denied that the MOD has something of a history of procrastination on large procurement programmes and that in the past can be blamed for causing delay and raising overall programme costs, often because of the habit of changing requirements and specifications, the bottom line is that the capability that eventually emerges from industry is almost always the best that money can buy. That is not to suggest that industry is perfect – far from it. But if Mr Osborne thinks that procurement related issues and problems will automatically go away if you shift Successor oversight responsibility away from the MOD to an authority that is to all extents and purposes an unknown quantity I suggest that he talks to a few more people outside of the Treasury and Cabinet Office before he finally makes up his that the leaked suggestion really is a good idea.
The scale and nature of work required to build four new SSBN’s can hardly be underestimated. Apart from the considerable infrastructure requirement, the building of a primary reactor plant and, I would assume, the need for a demonstrator and shore based test bed as well not to mention the need to create a potentially large number of new highly skilled engineering jobs makes this a particularly daunting task. But for industry working together with the MOD it is a manageable one and one that can also be delivered on time and on budget. On top of all that there is the need to ensure that the supply chain including specialist steel and other crucial material and component supply is able to meet the large demands that will be placed on them.
Successor build will, following the House of Commons vote on the issue and which I expect to occur sooner rather than later combined with having achieved ‘Main Gate’, will run alongside the current ‘Astute’ submarine programme build. This is perfectly feasible, doable and planned for. I suspect that many aspects of the Successor programme have not yet been agreed and that these will now need to be sorted quickly.
As in past and current generations of Valiant, Resolution, Vanguard and Astute class submarines, Successor Reactor design is being developed by Rolls-Royce. The PWR3 reactor that will power the four submarines to be built are planned to deliver huge improvements in terms of safety, integrity and capability availability whilst at the same time reducing through life costs. As part of new working arrangements under the heading of the Submarine Enterprise Performance Programme that called for closer cooperation between contractor and the MOD customer Rolls-Royce signed a ten-year Foundation Contract in 2013 that has as its aim the intention to deliver cost savings of £200 million in the provision of nuclear propulsion systems for the UK’s existing and future submarines.
It is a pity that the Chancellor chose to send what has been described as an ultimatum to Prime Minister, David Cameron stating that he will only support Trident replacement if a new body or organisation is created to take the programme on and that this will report direct to the Treasury. My best guess as to why he has chosen to do this is that he believes that the MOD and to an extent, industry are being complacent in terms of moving the programme forward at the pace required. I hope such fears are unfounded but even so, I for one believe that consistency is a better option that the unknown.
Whilst I am in no position to argue that the Treasury may in some aspects of their apparent concern be right I can hardly believe that creating a new body to oversee the Successor programme all the way through to delivery will do anything other than cause further friction, raise cost and delay.
If Treasury doubts that the MOD lacks sufficient skills to carry the programme through are genuine and that it believes in order to ensure the final 2028 delivery dates are met then as far as I am concerned the answer is to strengthen the MOD organisation.
Creating a ‘new’ organisation albeit one that has been merged from two existing units and making this report directly to the Treasury is similar to reinventing the wheel. It would add to the cost and it would add yet another unnecessary layer decision making process and management. It would in my view cause more friction within the MOD than it removes, demotivate all involved, potentially raise the cost and also make it more rather than less difficult for industry and customer to work together. It would also make communication between all parties concerned far more difficult.
I have other aspects of concern too. For instance, I find it rather odd, particularly given that most if not all large MoD programmes are already accountable in terms of budget responsibility to HM Treasury, that after so much good work done by the MOD in balancing the defence budget and in radically shaking up the DE&S defence procurement operation that Mr. Osborne should suddenly decide to express serious doubts on the best way to move the programme forward.
That said I am mindful that huge pressure has been placed on the MOD and within its Defence Equipment and Support (DE&S) procurement operation at Abbey Wood to reduce the cost of operation by making significant staff cuts. In the process that has taken place there are bound to have been skills losses and I am in little doubt that there are some skills gaps.
As an example of what can occur when you go too far with cutting skills capability I am reminded of when the current Foreign Secretary, the Rt. Hon. Philip Hammond was Transport Secretary during the first year of the Coalition Government in 2010/11 and that during his period office he apparently chose to rid the department of most if not all specialist advisors on cost grounds. Unfortunately this policy left the department all but devoid of experience when it came to handling rail franchise pricing and bids. The result was that First Group was wrongly awarded the West Coast Main Line rail franchise only for this award to have to be later withdrawn due to “significant technical flaws” being found in the bidding process and that were the fault of the Transport Department as opposed to the bidders. Not only did the whole exercise require to be done again but the four bidding companies also had to be reimbursed the £40 million cost of their respective bids. Not surprisingly it was Mr. Hammond’s successor as Transport Secretary that was forced to carry the can even though she had no part in the process or original decision.
Another factor in relation to the Treasury attempt to take control of the Successor programme is the manner in which this is being done. Why I wonder did they allow a potentially damaging and irresponsible message to be leak out to the press in this way? I have no idea and I sincerely hope that it was not deliberate and that a ‘witch hunt’ to find the person responsible is going on inside the Treasury and/or Cabinet Office right now.
While I can understand that doubts may still exist as to whether the Ministry of Defence, either in Main Building or DE&S have sufficient skills to handle such a massive programme as this putting a new line of decision making process in and that quite probably would itself lack necessary skills is the answer. That the MOD and industry need to get on with the job of building Successor with all haste and that to do this they need to ensure that they have all the necessary skills, people, infrastructure and engineering requirements in place is not in doubt. Neither is that once the final commitment to Successor has been given by government that MOD and industry will get on with the job and work well together. I suspect that if the suggestion of complacency in terms of production engineering, production organisation, supply chain, addressing engineering and skills shortages has any merit it is solely down to awaiting the final commitment to go ahead.
CHW (London 16th November 2015)
Howard Wheeldon FRAeS
Tel: 07710 779785