Q51 Ian Swales: Are we in the middle of any of those similar programmes, where we will spend far more than we expected and achieve little or nothing as a result? Can you think of another such programme we will be hearing about in this Committee in the future, or have we learned the lessons from this programme and completely changed?
Vice-Admiral Lambert: I do not think we have completely changed; I think we are in the process of changing. I do not think we can yet draw a line underneath all the asking we have had in the past, but if you look across the whole of the three environments-maritime, air and land-we are moving towards a more sensible approach and a more off-the-shelf approach, and we are getting away from asking for the very top, high-end specs, which we never deliver anyway. We have to move to a solution set which we can upgrade often, and we need to be able to afford to do that, rather than to afford one or two very high specs.
Q52 Ian Swales: As the accounting officer, Ms Brennan, are you happy that that culture, which Vice-Admiral Lambert has described, is now embedded in the MOD?
Ursula Brennan: I was just going to comment that I think we have learned lessons, and some of that is beginning to be visible in the procurements that are ongoing at the moment, like Foxhound, maybe also Terrier, and some of the FRES arrangements. There are things that we learned about buying in batches; having a simpler contract structure with a prime contractor, and not trying to have the complex contract structure that we had before and making sure that industry is ready and able to deliver the capabilities that we are after, and that we are not asking for something that is at the leading edge.
There are three other key things that we have done. One is that we are absolutely clear about not committing to expenditure when we do not have the money in the budget line. We are clear about being able to say, even if there is a reduced budget, that we expect to be able to spend it, and we do not have to go back and dig it up, because it is in balance. That is one thing that we have learned.
The second thing relates to giving the Army clearer responsibility for making decisions in this area, and similarly the Navy, with ships, and so on. We then have a stronger sense of, "Here's the budget and here are the objectives we're trying to achieve. Now, you come up with a proposition and own it."
Thirdly, our new Chief of Defence Materiel, Bernard Gray, is engaged in a major programme of rethinking the way we actually do all this procurement down in Abbey Wood to change the kind of project teams and the way they think about how they do procurement.
Q53 Ian Swales: Specifically on armoured vehicles, we heard from Mr Smith about the delay in getting what the 2010 SDR said we needed, and we heard that it would be 15 years before we got it. What is the cause of that delay? Is it simply budget availability, or are we in the process of some major technological innovations, which are delaying all this? Are we just talking about the budget? We all have to be concerned whether the technology will still be okay in 15 years' time and, given what the Report says about this programme perhaps being sacrificed sometimes to overspends elsewhere, whether we will even make the 15-year horizon.
Ursula Brennan: That was the point I was trying to get at. If we have our budget in balance, we do not have to go back and unpick programmes because there is not the money there. Just at the moment, we are looking at what happened in Libya, and asking what lessons we learned and what the implications are for equipment. That is inevitable and will lead to urgent operational requirement-type approaches. The thing we can try and stop is having to have volatility driven by problems in the budget.
Q54 Chair: Can I come in on this? This is the narrative that we have heard before, and the reality is very different. I am just going to put it to you that if your budget worked, you would not have had to do the three-month review. You have just pulled out money because you were going to spend more in 2011-12 than you had in your budget. That is right, isn't it? That is what the three-month review is about.
Ursula Brennan: The three-month review was not about 2011-12. It was about the 10-year programme.
Chair: But you have cut 2011-12 spending on this programme.
Ursula Brennan: Not, I thin as part of the three-month exercise. I am not sure.
Q55 Chair: The sum of £2.8 billion sticks in my memory. Perhaps Ross Campbell-
Ross Campbell: That's over 10 years, Chair.
Q56 Chair: And how much in this year?
Ursula Brennan: I am trying to recall. I don't dispute that over different planning rounds we have been taking money out.
Q57 Chair: But this year?
Ross Campbell: It is just £3 million this year, Chair The bulk of it is spread over the next 10 years.
Q58 Chair: Nevertheless, you have cut. The other thing is this: is your budget in balance?
Ursula Brennan: I think that the words that the previous Secretary of State used when he made the three-month exercise-
Chair: You tell me. You are the accounting officer.
Ursula Brennan: Were "broadly in balance". And that is my view.
Q59 Chair: You tell me. Is it in balance?
Ursula Brennan: It is broadly in balance. It is not yet completely in balance.
Q60 Chair: What does "broadly" mean? How much are you over-committed to what you have got?
Ursula Brennan: We are in the process of conducting the planning round, which will enable us to-