Written evidence submitted by the Ministry of Defence
Please see below the information you requested following the evidence session on 17 October 2017.
A table setting out each of the past seven years of efficiency targets (the 2010, 2013 and 2015 efficiency programmes referred to by Stephen Lovegrove), detailing the number of savings and how these targets have been translated into real-term savings.
The MOD stayed within its budget for each year of the period in question so is confident that the savings were delivered in full.
2010 Spending Review |
Area | Efficiency target (11/12 – 14/15) (£Bn)* | Translation to real-term savings |
Military personnel | 1.6 | 18% reduction in size of the Armed Forces. |
Civilian staff | 1.4 | 28% reduction in civilian personnel. |
Equipment | 0.1 | Implementing an innovative approach to procuring complex weapons, and working with industry partners to drive efficiencies in the submarine programme. |
Property Management | 0.6 | Sale of the Defence Support Group, the Met Office and the Marchwood Sea Mounting Centre, and contractorisation of the UK Hydrographics Office. |
Information technology and communication | 0.2 | Not tracked in detail – but the MOD stayed within its reduced budget for each year of the period in question, so is confident the savings were delivered in full. |
Other savings | 0.5 |
TOTAL | 4.3 | |
* Figures rounded to one decimal place
2013 Spending Review |
Area | Efficiency target (15/16 only) (£Bn)* | Efficiency achieved (15/16 only) (£Bn) | Translation to real-term savings |
Equipment | 0.35 | 0.35 | Substantial savings from equipment support arrangements. |
Common Goods and Services | 0.25 | 0.18** | Commercial savings from procuring Common Goods and Services through the Crown Commercial Service. |
Complex ICT | 0.15 | 0.15 | Significant savings from new contracts for MOD ICT systems. |
Workforce savings | 0.20 | 0.20 | Public sector pay restraint, further reductions in civilian personnel, review of military and civilian allowances. |
Construction and other | 0.15 | 0.15 | Construction savings, release of some MOD spectrum holdings. |
TOTAL | 1.10 | 1.03 | |
* Figures rounded to two decimal places
2015 Spending Review |
Area | Efficiency target (16/17 – 20/21) (£Bn)* | Efficiency identified so far (16/17-20/21) (£Bn) | Translation to real-term savings |
Pay and allowances | 2.1 | 2.1 | Government-wide capping of public sector pay rises at 1% per annum, and further review of military allowances. |
Equipment | 2.3 | 1.5 | Efficiency savings from transforming the way DE&S procures equipment, and from implementing the Single Source Contract Regulations. |
Other | 3.4 | 2.3 | A range of other efficiency savings, including a further 30% reduction in the civilian workforce, a reduction in travel expenditure, and a reduction in professional fees. |
TOTAL | 7.8 | 5.9 | |
* Figures rounded to one decimal place
The MOD is only one year into the five-year Spending Review 2015 (SR15) Efficiency Programme – and is currently forecasting ‘line of sight’ to 75% of the stretch target of 7.8Bn. However, the Department is forecasting ‘line of sight’ to 79% against our core target of £7.4Bn, as set by HM Treasury during the 2015 Spending Review.
The level of contingency set aside within the £9.1bn allocated for the F-35 between now and 2026.
Depending on the stage of delivery the SRO will manage an appropriate risk contingency of 5-10% with the DE&S Delivery Team Leader. This is a dynamic programme leadership function and the resource allocation is proportionate to the risks under management. The Department centrally manages the impact of variations in foreign exchange rates as part of the routine financial management of the Defence programme.
A note setting out an estimate for the overall cost of the F-35 programme (in total and a separate estimate for 2026-2035), within the parameters set out by the Permanent Secretary in response to Q205.
The whole life costs estimate on purchasing 48 aircraft and operating them until 2048 is circa £13Bn. Of this cost, £9.1Bn has so far been approved to cover delivery of 48 aircraft, with the last of these being delivered in 2024, and support to 2020. It is normal for the department to incrementally approve costs of supporting and upgrading equipment through time. This cost includes what other programmes would normally require as a mid-life upgrades. The F-35 benefits from the synergies of regular capability upgrade (as opposed to flat-line capability followed by a step-change in capability after 20 years), maintaining capability advantage against the evolving threat and operational interoperability with the US and other allies. In SDSR 15 we stated that we will maintain our plan to buy 138 F35 Lightning aircraft over the life of the programme. Given that the UK Lightning programme will last beyond the current OSD of 2048 for the first 48 aircraft and having reviewed the matter with the Joint Programme Office based in Washington, we feel that it is beyond the bounds of reasonable predictability to provide any cost or timeline estimates for the second planned batch of 90 aircraft. Not only is it likely that such estimates would prove to be inaccurate and misleading given we are looking up to 50 years into the future, they could potentially compromise the position of the Government, the taxpayer and international partners in any future contractual negotiation.
A breakdown of what the Department estimates the unit cost of each F-35 will be and what the other, additional costs (e.g. maintenance and upgrades), are (see Q198).
A detailed breakdown of the cost of the F-35 programme is at Annex A. The price of an F-35B from Low Rate Initial Production (LRIP) 10, which comprises the last order placed on contract and representing the 3 aircraft to be delivered in 2018, is $123M each. This price covers airframe and engine only and does not include cost of UK unique elements, estimated at $2M per aircraft. Of note, the price of our first 2 aircraft on LRIP 3 was $161M each.
Additional costs consists of the Composite Share Ratio (between partner nations), Support Equipment, ALIS, Initial Training Spares, Sustainment and Follow-on Modernization. It should be noted that these costs include the regular capability upgrade of all aircraft in line with the JSF programme MOU, thus maintaining advantage over the adversary. Under the MOU in which affordability is a primary tenet, the UK share is only 4.5% of these common capability costs. Unlike traditional UK aircraft programmes, the F-35 is scheduled for continual upgrade within the JSF Program with concomitant benefits to military capability and UK industry. Whilst we must be cautious of over-simplification in cost estimates, the latest approval as detailed in the NAO’s March 17 report, for the next 30 F-35B aircraft sits at circa £3Bn. This cost includes upgrades, spares, support equipment and simulators.
Whether it is technically possible to fit MADL to the Crowsnest AEW helicopter, the carrier itself and the Type 45 and, if not, what form of gateway communications node could provide a similar link between the F-35Bs and these assets?
Multi-function Advance Datalink (MADL) is a great success. It allows F-35 aircraft to communicate with each other whilst significantly reducing the likelihood of detection. It is a great leap forward in technology compared to legacy aircraft today. MADL was not intended to be used to communicate with other defence assets; it was intended to allow the F-35s to communicate with each other. It therefore meets its design remit. F-35 users are beginning to look at how they can further exploit the information that the F-35 collects. This is a secondary benefit outside of the F-35’s primary role. Investment in the exploitation of the information collected by F-35 needs to be considered as part of the Department’s wider portfolio of capabilities, defence priorities and affordability within the defence budget.
The F-35 can communicate extremely effectively with other aircraft via Link 16 as demonstrated in realistic threat scenarios in the Red Flag exercises in Nevada, where UK Typhoons received a complex picture from F-35’s advanced sensors. Similarly, F-35 can receive a Link-16 picture from other platforms, including Typhoon, Airborne Command and Control (E-3D Airborne Working and Control System) and surface forces.
When any transmission is made, there is a minor risk of detection when transmitting on Link 16, tactics are already in place to ensure operational effectiveness based upon the relevant threat.
MADL is a software-enabled waveform incorporated on the Northrop Grumman’s F-35 integrated communications, navigation and identification (CNI) avionics system; other manufacturers offer similar capability. It was first tested between two F-35 in 2013. Relay and re-broadcasting capabilities also exist that, with the necessary decryption and encryption, can translate MADL information to other waveforms such as Link-16. It should theoretically be possible to incorporate similar software-driven radios on other platforms, which might then receive some data. However, in assessing whether we could fit a software-driven radio to Crowsnest, QEC, T-45, we must first understand whether there is any value in their receiving any such data (especially when most of the contained information is relevant only to F-35 systems) and importantly whether likely operational circumstances permit exchange of such date (operating range, altitudes, environmental conditions etc.). The MOD, alongside US Services will continue to explore the value of exchanging data through the classified series of Babel Fish trials. If these trials prove to be of benefit, we will look to set requirements for, and invest in, these technologies to share information (although not necessarily using the MADL equipment) to other platforms.
We would also like to have a unit cost price for the Generation III helmets?
As at LRIP 9, the unit price is $241,579 per helmet for a Generation III helmet. The Gen III helmet represents a cutting-edge item of advanced equipment delivering revolutionary situational awareness to the front line combat pilot. It also replaces the Head-Up Display commonly used in other fighter aircraft.
Include the Perm Sec’s undertaking to provide details of proactive comms on F-35 to set the record straight.
DDC has a proactive communications plan in place for F-35 Lightning programme based on significant events and milestones.
The plan outlines opportunities for regular messaging around the development of aircraft build, through to trials, training and UK basing. Key themes focus on how the F-35 programme demonstrates investment in the capability that our Armed Forces need now and for the future, while supporting Defence Industry, sustaining highly skilled jobs, promoting UK economic growth and how it will form part of the next generation Air Force. Additional opportunities outside of this continue to be developed for exploitation through both traditional and digital media channels, with appropriate messaging for the selected target audiences.
Whilst, as the Minister for Defence Procurement noted in the recent session, many media opportunities will arise next year for the F-35, this has not stopped DDC from communicating about the programme this year. For just a few examples:
- Before HMS Queen Elizabeth left Rosyth for the first stage of Sea Trials, DDC supported a pre-briefing media facility at the Rosyth dockyard (21/06). The aim was to outline how the trials would work and update on the whole programme, including F-35. DDC issued a press release announcing a £135 million infrastructure contract to support the aircraft at RAF Marham and a fact sheet on the F-35 programme, covered by BBC News, Forces Network, UK Defence Journal and other publications. Wing Commander Jim Beck was also put up for pre-recorded interviews with attending outlets to feed into the coverage on the day of departure and ensure that the F-35 programme was not forgotten in the story.
- During HMS Queen Elizabeth’s first entry-to Portsmouth (16/08), for which high-profile national breakfast coverage was arranged, F-35 pilots including Wing Commander Jim Beck were on hand to be interviewed by the media to ensure the public were kept abreast of the programme. He appeared on BBC, Sky News and Channel 4.
- On the same day (16/08) DDC hosted a media briefing at BAE Systems Warton to celebrate the UK's contribution to the F-35 Lightning programme and the 10% aft fuselage production milestone being achieved. Journalists heard from a variety of key speakers from both industry and military, had the opportunity to take part and film the Queen Elizabeth Class simulator and flight control centre as well as visiting BAE Systems Samlesbury production plant where a variety of components for the F-35 are produced. Sqn Ldr Andy Edgell also gave an update on the Integrated Test Force and HMS Queen Elizabeth flight trials in 2018 via a live link from Naval Air Station Pax River, Maryland, USA.
- During DSEi (09/09), the new Lightning Force Commander Air Cdre Bradshaw gave a media briefing alongside Steve Over, Lockheed Martin Director of F-35 international strategy, to a variety of national and trade journalists.
- The weekend before the HCDC session (14/10), DDC arranged for Mail Online to interview Squadron Leader Andy Edgell, an F-35 test pilot in the US. This resulted in very positive coverage and I would encourage the committee to read it.
- On the day of the HCDC session itself (17/10), DDC published and issued a news story outlining the Minister for Defence Procurement’s announcement during the session that the F-35 fighter jet is now cleared for take-off from HMS Queen Elizabeth following successful ski-jump trials.
- As part of pre-planned media activity, members of the F-35 Integrated Test Force visited the UK last week from their US base (27/10). The visit included RAF pilots who are working with the F-35 in the run up to the Carrier First of Class Flight Trials next year. During their visit Squadron Leader Andy Edgell conducted an interview with the Press Association. The interview copy ran under embargo on PA yesterday and is carried in several outlets this morning including the Daily Express, Daily Telegraph, Mail Online, The Scotsman and The Herald. Overall the coverage was very positive, with most outlets leading with the angle that the F-35 is an “incredible fighter”.
As for negative stories, DDC always works promptly and responsibly to rebut any negative news coverage. Taking The Times as a prime example, DDC issued a spokesperson statement assuring the outlet that the F-35 programme is on time, within costs and offers the best capability for our Armed Forces. DDC, in coordination with the SRO F-35 and SRO CEPP, also rebutted every single claim made by The Times with a specific response before publication and afterwards in a Min(DP) letter to Colleagues. I attach this page at Annex B. This was then used to counter any further coverage and this position, as well as a positive statement from Wing Commander Jim Beck, was publicised in DDC’s daily Defence in the Media blog on the day of the coverage.
DDC also works alongside Lockheed Martin’s communications team. Jeff Babione, Executive Vice President and General Manager of the programme, submitted a letter to The Times at the time of the investigation noting that the outlet had not accurately reflected the current status of the programme or the detailed responses which had been provided to the accusations.
As you will be aware is often the case, The Times has naturally not given great prominence to points which counteract its article and only the day after the HCDC session (18/10) printed a correction on page 68 to clarify that the ‘Ministry of Defence’s position is that all Britain’s F-35 jets will be able to conduct safe vertical landings’.
For the committee’s information, many F-35 stories have been gathered and publicised on a dedicated F-35 and Carrier microsite (www.UKCarrierPower.tumblr.com) with articles, videos and blogs detailing exercises and pilot experiences amongst the content.
DDC continues to attempt to set-the-record straight on the programme and to proactively communicate that the F-35 is the world’s most sophisticated fighter jet.
ANNEX B
F35 POSITIVE AND REBUTTAL LINES TO TAKE
Top lines
- The F-35 programme is on time, within costs and offers the best capability for our Armed Forces.
- The F-35 is the world’s most advanced fighter jet.
- Whether operating from land or with the Queen Elizabeth Class aircraft carriers, they will ensure a formidable fighting force.
Further lines:
- All issues raised have been reported in the past and are under active management by the Joint Strike Fighter Joint Programme Office and the UK Ministry of Defence.
- The F-35 Programme is still within the Development Test phase. As issues are found, solutions are developed.
- The UK’s F-35 programme remains wholly within its cost approval, details of which can be found on the gov.uk website within the Defence Equipment Plan 2016, published on the 27 January 2017.
Wing Commander Jim Beck, one of the UK’s most experienced F-35 pilots and soon to take over the role of Lightning Programme Manager, said:
“The F-35 is the best aircraft I’ve ever flown. It is the most advanced multi-role fighter jet out there and the aircraft most suited to the UK’s needs. With huge flexibility and cutting-edge innovation, this supersonic, stealth aircraft will bring about a generation change in the way we fight in the Combat Air arena for many decades to come.”
Group Capt Willy Hackett, Joint Strike Fighter Programme Office added:
“As the only Level 1 partner in the F-35 programme alongside the United States, we have been able to place specialists deep within US industry and flight test community. This has enabled the UK, alongside our US colleagues, to take a leading role in the planning and execution of flight trials. This will enable us to unlock the seagoing ability of this air system onboard HMS Queen Elizabeth and ensure we deliver optimum capability for the UK and our allies”.
Specific rebuttal against The Times
Claim: The F-35 is unable to share data.
This is incorrect. Data exchange was examined during a recent Red Flag exercise with the US where the F-35 acquitted itself exceptionally well. To describe the data link as insecure is incorrect.
Claim: There are hidden costs within the F-35 programme.
We simply do not recognise the costs quoted in the article, and neither do the manufacturers, Lockheed Martin (see letter attached). The UK’s F-35 programme remains within its cost approval.
Defence expert Howard Wheeldon has described The Times’ figures as a ‘back of a fag packet’ cost guestimates that also fail to mention cost reductions that will come from a low rate initial production.
As recently announced, the Department has invested in RAF Marham to ensure availability and support to the UK F-35. This investment ensures that cutting edge maintenance facilities are available to the aircraft on arrival in the UK next year.
Claim: The Broadband capacity of Queen Elizabeth is insufficient to support F-35.
This is incorrect. The current network bandwidth installed on the Queen Elizabeth Class aircraft carriers is sufficient to carry out the scope of carrier strike operations.
The aircraft, the carrier and our communication networks are all designed with the capacity to grow, and are not constrained by design or bandwidth limitations.
Claim: The Autonomic Logistics Information System (ALIS) software system is vulnerability in the F-35 system
This is incorrect. ALIS is part of the ground based information system and is not fitted on board the F-35B Lightning II fighter aircraft.
We don’t comment on the specifics of Cyber operations, but we take encryption and protection of our information very seriously and these measures remain classified. All classified data transmissions to and from the F-35B Lightning II fighter aircraft are fully encrypted.
Claim: The F-35 has a number of on-going technical issues:
All issues raised have been reported in the past and are under active management by the Joint Strike Fighter Joint Programme Office and the MOD.
Claim: The F35 is too heavy to land on the aircraft carrier.
This is nonsense. We have specifically developed a UK technique for recovering the aircraft to the carriers to ensure that a heavy aircraft can land on the deck. Ship-borne Rolling Vertical Landing (SRVL) will be tested during Flight Trials of the HMS Queen Elizabeth over the next few years.
Claim: Helmet not fit for purpose.
We are holding the supplier to account to deliver a helmet that delivers the full operational requirement and we are confident that issue will be resolved satisfactorily.
Claim: The F35 has less memory than the average iPhone.
The figure of 10 GB is not recognised by the MoD and comparison of F-35 memory with an iPhone is neither credible, nor sensible. The F-35 software architecture is partitioned with memory distributed around the aircraft to achieve specific functions in a rigorous security architecture, and the memory is of many, many orders of magnitude higher than 10GB.
Claim: The F35 programme is not subject to proper public scrutiny.
This is incorrect. This programme as part of the Government Major Projects Portfolio undergoes frequent reviews which involve external scrutiny. In March 2017, the NAO report 'Delivering Carrier Strike' analysed the carrier programme and conducted a deep dive in the F-35. In addition, the Major Projects Authority provides independent assurance on major Govt projects, including F-35. All of this is published online.
Claim: There will be a slowdown of purchase of F35s. The 48 that are supposed to be bought by 2025 will be reduced
This is speculation. Our commitment to new Lightning fighter jets remains and was set out by the SDSR.
Attachment:
Lockheed Martin, Letter to the Times, 20 July 2017
Sir,
Your coverage of the F-35, “Trouble on Deck” (July 17), does not accurately reflect the current status of the programme, the aircraft’s capabilities, nor the detailed responses we provided to your questions.
We simply do not recognise your cost estimates, nor agree with the way you arrived at them. The costs of the jet, engine and fee continue to fall contract-to-contract with the most recent Lot 10 contract in February representing a 62 percent reduction in the F-35A price from the first contract in 2007. The F-35B that the UK is procuring is on a similar cost reduction curve that will ultimately bring the price of a 5th generation F-35 down to that of older 4th generation fighters.
Many of the programmatic issues raised in your coverage are historic and have long since been addressed. The performance of the F-35 speaks for itself and the best people to ask continue to be the operators and maintainers who understand the aircraft’s full potential and capability – not long time critics who have nothing to do with the programme.
For example, earlier this year the former lead of the F-35 Integration Office, Brigadier General Scott Pleus said in an interview with Business Insider that “the capabilities of the F-35 are absolutely eye-watering. The airplane has unbelievable manoeuvring characteristics that make it completely undefeatable in an air-to-air environment.”
The F-35 is combat ready and already making a game-changing difference to the defence of a number of nations. We are in absolute agreement with the assessment of Wing Commander Beck – who has had a key role in testing this jet – that it is “the best aircraft [he has] ever flown” and we are proud of the contribution the jet will make to the defence of the UK, the US and our allies around the world.
JEFF BABIONE
Executive Vice President and General Manager, F-35 Program, Lockheed Martin
