Speech to the Future Carrier “Conclave” - 18 September 2006
Minister for Defence Procurement, Lord Drayson, addresses the Royal United Services Institute (RUSI)
Lord Drayson
Good Morning. It’s great to be back at RUSI – particularly to discuss the carrier project, which is key to so much of what we are trying to achieve in defence.
CVF is one of the major projects I monitor closely. I hold regular “stocktakes” of the programme with the Investment Approvals Board and project personnel both in Abbey Wood and London.
Earlier in the year I spent some time with HMS Illustrious to learn about how carrier strike works in practice and the lessons for CVF. Last Friday I spent a day on HMS Ocean currently undergoing exercises in preparation for her next deployment. I wanted to understood properly the advantages of her commercial build methods, the plusses and minuses of her design as an amphibious helicopter carrier and again the lessons for CVF.
So you can see, I’ve immersed myself in the detail of this project – as well as the strategic- to ensure that when we come to take the main decision to build these ships – we get it right.
This morning I want to set out some clear and direct points so that all of us involved in the project have absolute clarity on what faces us today – and what needs to happen now.
So where are we? Lets just remember the context we are operating in. The Ministry of Defence is today facing a greater level of sustained pressure and challenge than its faced for many years. We will meet that challenge and we will win – but its going to take a big effort and in some areas a big change in approach to do so. Part of that change is needed in defence procurement. Not only do we need to ensure that we respond to the changing threats in theatre more quickly – like we’ve done with our new protected patrol vehicles – from requirement to delivery in under 10 months - but also in the way we organise and manage defence equipment and support.
The change is happening now. Building on last year’s DIS which set out our priorities–we are now merging the DPA and DLO - revising the planning and financing systems to create a procurement system that manages equipment acquisition and support- through-life under a single TLB.
At the same time we are going through the spending review process and within that looking hard at our priorities within the equipment programme.
I remind you of all this because I want to underline that the carrier project is taking place during some busy and testing times.
Everyone in the MOD and industry should be under no illusion – there will be no second chances on this project. Coming back to me and saying we need more time – or more money to get it right – will not wash – there isn’t any more – of either.
This is it. We have to focus now on getting the project ready for Main Gate – at the budget and to the timescale that I set out last year. It can be done – but its going to require a big effort from all sides and a commitment to the new ways of doing business between MoD and industry to do it.
The prize is worth the effort. These ships will transform the UK’s defensive capability. The biggest ships the Navy’s ever had. Four acres of British sovereign territory that can project power or humanitarian relief on a scale not previously available to us. A capability that is absolutely relevant to the challenges facing us today – and that will increasingly stretch us tomorrow. Globalisation is creating vast economic opportunity- but with it the same amount of insecurity. Climate change, mass migration, energy resources are just three of the biggest drivers of that insecurity. If Britain as a nation is going to be able to continue to engage in world affairs – to be able to go where the causes of conflict and hardship are developing and do something about it– and not just wait until the effects hit us at home – then it needs the tools for the job. The Queen Elizabeth Class Carrier is that tool.
Aircraft Carriers’ mobility, flexibility and independence are uniquely valuable in force protection, peace support and if necessary, military action. They have played an important role in our major recent operations from Kosovo to Sierra Leone to Iraq. They give us the ability to initiate military action where and when we choose. They offer a presence worldwide which can help contribute to conflict prevention, and a flexible and rapidly deployable base during operations where other facilities are unavailable or still under construction.
But their size and sophistication mean that it is a massive task to deliver the biggest warships ever constructed in this country at a price that the country can afford and to a timescale that the country needs. The improvements needed to deliver the Carriers will have a major influence on the UK warship building industry and on warship procurement in the MoD for years to come.
The Future Carriers are the lynchpin of the Maritime Industrial Strategy (MIS). Successful implementation of the maritime industrial strategy will deliver an affordable future ship and submarine programme, ensure that key capabilities are sustained and set an agenda for reform and performance improvement; the long term stability needed to support investment in skills and modern manufacturing facilities. Taking advantage of the fact that this Government is making the biggest investment in naval ships and submarines that we’ve seen for years.
Implementation of the MIS doesn’t just depend on the shipyards willingness to work with the MoD – it depends upon their ability to work together. Financial engineering – and M&A wont – on its own achieve this – it’s a cultural and management challenge for the industry.
The Carrier alliance is an important road-test of the industry’s ability to meet that challenge. It is also an opportunity for industry to make better profits in return for improved performance.
It is an Alliance of strong partners, led by strong characters. Each company brings something to the table and are, deservedly, determined to be rewarded for ultimately delivering a successful programme. And so is the MOD as an integral partner and client. There is plenty of creative tension. But I’m encouraged by the way it’s working. There is an increasingly evident Alliance culture reaching decisions on a “best for project” basis, rather than protecting individual company interests. This factor cannot be underestimated and is a direct result of the engagement and support of the company CEOs which I really appreciate.
And their direct, no nonsense approach has also driven a clarity which has helped the MoD team get its act together. I remember being told that unless the Equipment Capability Customer and the Navy made up their mind up about what it wanted in the design by the end of March then industry couldn’t deliver a main gate proposal by Christmas. They met that target.
The Project Team, which includes a sizeable naval element, has been reviewing the balance of the key parameters of performance, time and cost; calculating how best to meet the capability requirements within the available budget.
And, in addition, we are deliberately introducing Challenge processes against different aspects of the cost estimate. Both a Red Team review and an Independent Financial Review are underway to examine what has been done so far.
The design to cost discipline is working–I am determined that we keep focussed on the realistic and the achievable.
And it is realistic and achievable. At the budget price, CVF is affordable within the current Equipment Plan.
As I have already said, this project needs to keep within budget. There will be no additional funding.
As for the design, it is spectacular. The Queen Elizabeth Class will be capable of operating more than twice as many large aircraft than the INVINCIBLEs – but with the same sized crew. Weighing in at 65,000 tonnes, it displaces as much as the three INVINCIBLE class vessels put together. It will have four times the internal hull volume, carry 70 percent more ship and aircraft fuel, have 75 percent more range and provide accommodation to the latest and highest standards.
In time, the carriers will be joined by the new JSF aircraft – providing, as I expect, we resolve the technology transfer issues with the United States by the end of this year.
And of course we have maintained our Plan B options if we run into any issues on JSF. I’m optimistic that we wont – but planning on the basis that we might.
Issues like this have required an unprecedented degree of future-proofing in the design. This has involved extensive modelling, computer analysis and tank tests. The result is an adaptable design, with a ramp to operate STOVL aircraft, which could be altered to take catapults and arrestor gear to launch conventional carrier aircraft if needed.
The design is innovative and builds on the lessons from Ocean and Invincible. For example, the main engines are located high in the ship, avoiding penetration of large downtakes and exhausts deep in the hull. It is the first carrier with split “island” superstructure - improving control of flight deck operations.
The production engineering of the ship will also be vital to achieving our objectives. We are applying modern commercial, ship-building design practices and standards where appropriate to improve value for money without compromising fighting effectiveness. These will need to be complemented with investments in new manufacturing technology and working practices in the shipyards to improve efficiency.
We have made excellent progress over the past year. I approved last December the commitment of a further £300M for the Demonstration Phase Contracts and the expansion of the Alliance. The subsequent Contracts, including the Alliance Agreement, were signed on 13 April 06.
Last March, we signed a Memorandum of Understanding between the UK and France setting out a framework of cooperation, which benefits both the CVF and the French second carrier (PA2) projects.
France is making a sizable financial contribution which takes account of the investment we have already made and she will contribute to the current Demonstration Phase costs. The UK will develop a common baseline design that both countries can use further to develop their own carriers. This will bring savings in design costs, without slowing the tempo of the project. It also offers the potential of savings on shared future procurements. Co-operation was only agreed on the basis that it must deliver savings without delaying the UK or French programmes.
I’m pleased to see that the pace of the project has not been slowed by this collaboration – to the credit of both teams. We need to keep this up.
So, overall we are on track, thanks to a marvellous effort by everyone concerned. To those here today engaged on the project – thank you for your excellent work to date and please pass on my appreciation to your colleagues and subordinates. There is no more pivotal project than this in defence today.
We are constructing the most capable carrier force outside of the USA, able to deliver strategic effect on the other side of the world. We are using an innovative Alliance approach, which is in line with the Defence Industrial Strategy and draws on the strengths and expertise of all the parties involved, including international allies. We are building on the industrial and commercial momentum generated by the CVF programme to drive restructuring across the maritime industry to meet both the CVF peak and the reduced post-CVF demand.
At a time a when the pressures on defence are severe and complex - I am pleased with the progress that CVF is making and I’m looking forward to receiving the main gate submission on time.
