Q101 Chair: In deciding the budget, is the money there to do the job on Mastiff-the changes?
Ursula Brennan: We're not allocating the money to a single vehicle in that way.
Q102 Chair: But when you set the budget, you think to yourself, "We've got to do a, b, c and d."
Ursula Brennan: Indeed.
Q103 Chair: And one of the things that paragraph 4.5 says to me is that Mastiff is not good enough, but we've just heard from Gary Coward that actually you're going to have to spend a bit of money on it to make it serviceable until 2025 or whenever. Is the money there? You must have decided. Yes or no?
Ursula Brennan: No, we haven't, genuinely. We have not decided because-
Chair: That sounds so awful to me. When I was a Minister, setting my budgets, I knew what I could afford to do and not do within those budgets. I didn't pass the buck down the line to somebody else; I took responsibility for those decisions, and I'm sure Anne McGuire felt exactly the same. We wouldn't have said, "Oh, well, the budget has been cut; it's down to you what to do," knowing they didn't have the money to do it.
Ursula Brennan: Can I just be really clear? The armoured fighting vehicles budget covers a whole raft of vehicles: protected mobility, manoeuvre, all sorts of things-
Q104 Chair: You've cut the budget from £15 billion8-in today's prices, it probably ought to be £20 billion-to £5.6 billion. Is there money in there to deal with some of the Mastiff problems?
Ursula Brennan: We have not allocated it in that specific way. We have urgent operational requirements vehicles in Afghanistan, we have existing vehicles; we have plans to buy new vehicles; we have announced the intention to proceed with a Warrior upgrade. What we are doing now is saying, "Across that complete range of vehicles, which are the ones that we want to carry on investing in and to make some changes to and bring into core?" Some of these vehicles will be worth investing in; some won't, so I can't tell you now that we have put specific money-
Q105 Ian Swales: Do you actually know how much it will cost to do what you want to do with them? Twice, Admiral Lambert has talked about upgradeability. Did you plan for what you were going to do, having spent these billions, with these vehicles afterwards? Is there any plan?
Vice-Admiral Lambert: With the vehicles that we got for Afghanistan, the most important thing was to deliver them as quickly as possible. Time was of the essence, and we traded out a number of capabilities, including upgradeability, that we would have got from something like the utility-
Q106 Ian Swales: So you had no plan as to what you were going to do with them? Do you have a plan now?
Vice-Admiral Lambert: The utility vehicle, as General Coward explained, has a capability to manoeuvre across land so that we can use it within a wider force. But one of the other things that we have learned during the operations in Iraq and Afghanistan is that we can no longer put our soldiers-that's the infantrymen-in unprotected vehicles. We never had a programme for that9, so across the piece we have to look at protection for everybody, from the light infantrymen all the way through to the Mechanised Brigade. We are doing the work at the moment to see whether the urgent operational requirements that we procured are worth bringing into core, because the cost of supporting some of them may be extortionate.
Q107 Chair: General Coward, do you want the money now?
Lieutenant-General Coward: I do need a balance of resource to deal not only with the core programme, but with those UORs that we will take into core.
Chair: Dear, dear, dear. Nick?
Q108 Nick Smith: On page 29 of the Report, it says that "from 2014-15, a significant period of recovery and re-equipment will be required Without changes to plans for defence spending the likelihood of meeting the Strategic Defence and Security Review aspirations of making '...the Army more mobile and more flexible' appears to be remote until... 2025." General Coward, is that good enough?
Lieutenant-General Coward: It is what it is.
Q109 Nick Smith: I thought I would leave that hanging in the air for a while. So you are saying that the Army will not be flexible for a period of about 10 years.
Chair: At least.
Lieutenant-General Coward: It will be less flexible than we had at one stage anticipated.
Vice-Admiral Lambert: In the same way as requirements can be at the cutting edge, the asking capabilities can also be at the cutting edge, and we occasionally have to give them priorities.
Chair: We have just had an SDSR. You might have thought that, in setting the SDSR, you would have set some figures against it, and we have not done that. That is really the criticism here, which I hope will come out in our conclusions.
Comptroller and Auditor General: I suppose it is quite a similar question. As we look through the period for bringing all these vehicles in-it is great that the budget is more balanced and that it is getting into balance over a long period-is it not imbalanced, but with a very long time scale for bringing in all these vehicles? Will you not have to compress this rather more for it to be really satisfactory in terms of when these vehicles come into service? If you look at some of them, you are thinking shorter term and yet there are some very long-term in-service dates and that is still in the plan. Are you not going to have a way of drawing some of that back into a shorter time scale?
Lieutenant-General Coward: Surely it is down to the profile of the money that is available, rather than any magic of procurement to shave a few years off a procurement process.
Comptroller and Auditor General: I quite agree, but if you are making commitments that are not coming into service for such a long time and if you have been saying that you will become a lot more agile, is there any point in planning on something that is going to come into service so far in the future?
Lieutenant-General Coward: It is the best plan that we can have given the resources that are available.
Q110 Austin Mitchell: I have just one question on the armoured vehicle problem. I would have thought that it was fairly basic. Such vehicles are fairly crucial in saving lives against the kind of terrorism that we have had to face in Iraq and Afghanistan, but it seems to have been the fall guy of the system. Paragraph 3.11 on page 22 of the Report states that "the armoured vehicle sector has had the largest amount of funding removed of any individual sector in the five planning rounds conducted between 2005 and 2010" and figure 7 in appendix one shows that-though the impact of the SDSR on combat air is greater-the amount removed from armoured vehicles in the previous planning rounds is still well ahead of everything else.
Why is it that such an important programme, which is so important for preserving the lives of our troops and for delivering them for deployment, is so badly cut? Is that likely to happen again if there are any more cuts in the defence budget?
Ursula Brennan: In terms of taking money out of the defence programme, we have explained that we have had to do that in successive years because the budget was not in balance. We have worked through the SDSR, and in our announcement in July, and we have got it nearly there. It is not quite there yet, but we have it nearly there over 10 years, so we are not expecting to be taking further big bites out of it.
It is always difficult. You can compare and ask what we took out of particular areas, but you can also look at the areas where we actually sought to protect spending. We have been attempting to shift our money more towards things such as ISTAR, enablers, air transport and so on, which are the things where we are particularly short.
It is very difficult to do that when a lot of your budget is already committed, and so it is true that we sometimes have to look at the balance between the spend that is committed and the spend that is uncommitted. In doing so, however, we are guided by Admiral Lambert's team, which looks at the capabilities that we require to be able to deliver and which shows the areas where we can take more risks. Our aim is to get to a point where we have a balanced budget and where we do not have to make those judgments.
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8 In 2005 the MoD planned to spend £4 billion on Armoured Vehicles over the next 10 years, not £15 billion.
9 Vector Protected Patrol Vehicles (PPV) and upgrades to Snatch vehicles were delivered through core programmes. The Medium PPV programme (Vector replacement in service 2018) was cancelled in the SDSR.