Q21 Chair: Give us a firm date, or a feel of a date.
Ursula Brennan: I cannot give you a firm date because, apart from anything else, our new Secretary of State wants to take a view about this, but we are in discussion with the NAO and we are expecting to be able to do this certainly within weeks rather than months.
Q22 Chair: "Within weeks rather than months"-we will hold you to that. By the time this Report comes out, we would hope to have heard from you. Our Report will come out within weeks rather than months.
At the moment we have only got specifics. Let's look first at the Astute programme. Thank you for coming and talking about that. The Astute programme is a bad example of where delays are costing money. My understanding, correct me if I am wrong, is that this is a programme that was approved in 1997. Is that right?
Commodore Beverstock: Some aspects of the programme were approved in 1997. We had not approved the entirety of the programme.
Q23 Chair: I understand that you are approving it bit by bit, but it was given a first go-ahead in 1997. I also understand that there have been, cumulatively, 297 months of delay since 1997.
Commodore Beverstock: That is certainly the figure in the NAO's Report. We have to take the Astute delays into context. In the early part of this decade, most of the delays in the Astute programme were down to the fact we had taken a conscious decision to gap the production of submarines up at Barrow, between the completion of the construction of the Vanguard class and starting to rebuild up the Astute class.
Q24 Chair: I understand that too, but delay costs money.
Commodore Beverstock: Indeed.
Q25 Chair: I understand, in the last three years, we have had 196 months of cumulative delay.
Commodore Beverstock: The 196 months is a result of an accumulation of each of the boat programmes added together. It is not necessarily a delay to each boat. If we take it from the MPR 2010, the delays reported this year and those in the planning round the previous year had been done at submarine enterprise level.
Q26 Chair: At what?
Commodore Beverstock: When we were considering the programme as an enterprise. You have to put the Astute delays into the context of the submarine enterprise. When we looked-which we did very closely-at the introduction of the Successor Deterrent as part of the coalition Government's Value for Money Review, which was then reported as part of the SDSR, we looked at the Submarine Enterprise Programme. That programme includes the seven boats we are planning to build on Astute, and up to four successive boats that we are planning to build from that point. We determined that we could defer the Successor Deterrent in service date to 2028. When we considered the entirety of the submarine enterprise, we found it was better value for money, providing a minimum sustainable drum beat, to avoid the problems we had in the Vanguard to Astute gap, and to ensure that we could run a proper sustainable programme. You will recall, in the value for money study, that we introduced the Submarine Enterprise Performance Programme to drive efficiency into the programme.
Q27 Chair: You have not questioned my delay; I assume you will not question, as it is in the Report, that the delays so far have cost us, the taxpayer, £1.9 billion-delays because of both technical issues and deliberate decisions taken by the Department.
Commodore Beverstock: Yes.
Bernard Gray: We are definitely not disputing the numbers. The question might be around the association of delay equalling cost. Some of the cost increase is as a result of delays for a variety of reasons, and some of it is as a result of technical problems.
Q28 Chair: I understand that. My understanding from the Report is: £900 million is a result of technical problems; £1 billion is a result of deliberate decisions to delay?
Bernard Gray: Either deliberate decisions to delay, or delay caused by technical problems.
Q29 Chair: Whatever the good reasons-that you want to keep capability going until if and when you build a new nuclear deterrent, which is, as I understand, the purpose behind this-nevertheless, the cost to the taxpayer, some of which is technical, some of which is deliberate, is £1.9 billion to date. I think that is pretty shocking. No blame, but it is shocking. If you look at the table on page 28, figure 14, it then leaves you with: when we ordered the first three boats you had a bill for £2.231 billion for them. You then order the fourth in 20032-I might have that date wrong-and that one boat cost you £1.28 billion. That looks gobsmacking to me.
Bernard Gray: One has to ask oneself whether the contract for the first three boats was appropriately priced, which, as it turned out, was not the case.
Q30 Chair: Were you spending more than £2.23 billion on the first three?
Bernard Gray: No, it has cost the companies an enormous amount of money, because they had severely underestimated the complexity of what they were trying to do.
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1 The figures from the MPR !! (NAO report) are £3.4Bn for
the first 3 boats
2 Astute Boat 4 was approved in 2007