House of Commons Defence Committee Future Carrier and Joint Combat Aircraft Programmes Second Report of Session 2005–06 Report, together with formal minutes, oral and written evidence Ordered by The House of Commons to be printed 13 December 2005 HC 554 Published on 21 December 2005 by authority of the House of Commons London: The Stationery Office Limited £15.50 The Defence Committee The Defence Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Ministry of Defence and its associated public bodies. Current membership Rt Hon James Arbuthnot MP (Conservative, North East Hampshire) (Chairman) Mr David S Borrow MP (Labour, South Ribble) Mr Colin Breed MP (Liberal Democrat, South East Cornwall) Derek Conway MP (Conservative, Old Bexley and Sidcup) Mr David Crausby MP (Labour, Bolton North East) Linda Gilroy MP (Labour, Plymouth Sutton) Mr David Hamilton MP (Labour, Midlothian) Mr Mike Hancock MP (Liberal Democrat, Portsmouth South) Mr Dai Havard MP (Labour, Merthyr Tydfil and Rhymney) Mr Brian Jenkins MP (Labour, Tamworth) Mr Kevan Jones MP (Labour, Durham North) Robert Key MP (Conservative, Salisbury) John Smith MP (Labour, Vale of Glamorgan) Mr Desmond Swayne MP (Conservative, New Forest West) Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk. Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at: www.parliament.uk/parliamentary_committees/defence_committee.cfm A list of Reports of the Committee in the Present Parliament is at the back of this volume. Committee staff The current staff of the Committee are Philippa Helme (Clerk), Richard Cooke (Second Clerk), Ian Rogers (Audit Adviser), Adrian Jenner (Inquiry Manager), Lis McCracken (Committee Assistant), Sheryl Dinsdale (Secretary) and Stewart McIlvenna (Senior Office Clerk). Contacts All correspondence should be addressed to the Clerk of the Defence Committee, House of Commons, London SW1A 0AA. The telephone number for general enquiries is 020 7219 5745; the Committee’s email address is [email protected]. Media inquiries should be addressed to Jessica Bridges- Palmer on 020 7219 0724. Cover image reproduced with the permission of BAE Systems. Future Carriers and Joint Combat Aircraft Programmes 1 Contents Report Page Summary 3 1 Introduction 5 The requirement 5 Scope of our inquiry 6 Maritime Airborne Surveillance and Control Programme 6 Timing of the inquiry 7 Oral and written evidence 7 2 Future Carrier Programme 8 Background 8 Forecast costs 9 Forecast In-Service Dates 9 Assessment Phase and Main Gate approval 9 Reducing costs on the CVF programme 12 Possible Slippage of the In-Service Date 14 Alliance Agreement 15 Shipbuilding Strategy 18 Possible French involvement 21 3 Joint Combat Aircraft Programme 24 Background 24 Forecast costs 25 Forecast In-Service Dates 25 Progress on the JSF programme 26 Production and support 27 Information sharing 28 United States review of the programme 30 4 Conclusion 33 Conclusions and recommendations 34 Annex: List of Abbreviations 38 Formal minutes 39 List of witnesses 40 List of written evidence 41 Reports from the Defence Committee 42 Future Carriers and Joint Combat Aircraft Programmes 3 Summary The Ministry of Defence plans to replace the Royal Navy’s current strength of three aircraft carriers with two larger, more versatile carriers capable of carrying a more powerful force, including new carrier borne aircraft to replace the Harrier. This report analyses the progress of the Future Carrier and related Joint Combat Aircraft programmes. On the Future Carrier programme, there is a serious risk that the two carriers will not enter service in 2012 and 2015 as originally planned. The main investment decision (Main Gate), which precedes the Demonstration and Manufacture phases, was originally planned to be taken in December 2003, but there is now no target date for this decision, although it is possible that an intermediate decision may be imminent that will serve as a partial Main Gate. Further delays are likely to impact upon the original In-Service Dates for the new carriers. Procurement of the aircraft carriers is being undertaken under a novel ‘Alliance’ approach consisting of MoD and three commercial companies. This approach was announced almost three years ago, but some fundamental issues still remain to be resolved before the Alliance Agreement can be finalised. The optimum shipbuild strategy for the carriers has yet to be decided. Delays to the letting of construction contracts for the two carriers are already impacting upon UK shipyards: this is threatening jobs and the survival of some UK shipyards. If work on the carriers is significantly delayed, it will coincide with a number of other naval shipbuilding programmes, putting pressure on the UK’s naval shipbuilding capacity and perhaps forcing work abroad. We will need to know that the Ministry of Defence has addressed capacity issues in its Defence Industrial Strategy, which we have not seen when finalising this report. On the Joint Combat Aircraft programme, the Joint Strike Fighter, a US-led programme, has been selected as the aircraft to operate from the new carriers. Weight problems on the variant of the Joint Strike Fighter which the UK is procuring have been mitigated, but risks remain and must be monitored closely. The target In-Service Date for the Joint Strike Fighter was 2012 to coincide with the entry into service of the first new carrier. This has now been revised to 2014. If the first new carrier enters service in 2012, there is a risk that the Royal Navy will have a new carrier but no new aircraft to operate from it. It is vital that the UK gets all the information and access to technology it requires from the US to have ‘Sovereign Capability’—the ability to maintain the Joint Strike Fighter aircraft and undertake future upgrades independently. The UK must receive adequate assurances that it will get all the information and access to technology it requires before the programme is too far advanced. If these assurances are not given, it is questionable whether the UK should continue its involvement in the programme. 4 Future Carrier and Joint Combat Aircraft Programmes Key issues remain to be resolved on both programmes. Delays to one or both programmes could result in a capability gap for the Royal Navy. In order to bridge the gap, it is likely that the lives of the current carriers and carrier aircraft will need to be extended. For this reason, decisions on the programme are needed as soon as possible. Future Carriers and Joint Combat Aircraft Programmes 5 1 Introduction The requirement 1. The requirement for two new aircraft carriers and aircraft to operate from them was set out in the Strategic Defence Review of 1998:1 The focus for our maritime forces in the new environment will move towards rapid deployment operations. Our amphibious capability with its improved specialised shipping will give our Rapid Reaction Forces important extra flexibility. Aircraft carriers will have a wide utility, including for deterrence and coercion. Our current INVINCIBLE class carriers will be given a wider power projection role by the development of a "Joint Force 2000" combining RN and RAF Harrier aircraft. To meet our longer term needs, we plan to replace our current carriers from around 2012 by two larger, more versatile, carriers capable of carrying a more powerful force, including a future carrier borne aircraft to replace the Harrier. These plans will now be developed in detail in the normal way.2 2. The two new aircraft carriers and the aircraft to operate from them are core elements of the ‘Carrier Strike’ capability. Carrier Strike is an ‘expeditionary air power capability that will be able to operate in uncertain access, basing and overflight conditions as part of a joint force: the fast jet element should be capable of delivering the full range of effects from both the land and sea base’.3 At the core of the Carrier Strike capability are the Future Aircraft Carriers (CVF), the Joint Combat Aircraft (JCA) and the Maritime Airborne Surveillance and Control (MASC) projects.4 The United Kingdom (UK) Ministry of Defence (MoD) has selected the Short Take Off and Vertical Landing (STOVL) variant of the Joint Strike Fighter (JSF) to meet the JCA requirement. JSF is a US-led programme.5 The current estimate of whole life costs6 for the core projects of the Carrier Strike capability is £31 billion, which includes some £12 billion of acquisition costs.7 3. The Defence Committee in the last Parliament examined the progress in acquiring the two new aircraft carriers and the Joint Strike Fighter, in its Defence Procurement reports of 20038 and 20049, and its 2005 report10 into the White Paper, Delivering Security in a Changing World: Future Capabilities. 1 White Paper on the Strategic Defence Review, Modern Forces for a Modern World, Cm 3999 2 Cm 3999, para 115 3 Ev 44 4 Ibid 5 Ev 40 6 MoD’s Smart Acquisition initiative ‘includes the need to examine critically and manage the whole life costs of delivering military capability. In order to ensure that investment decisions take full account of the cost of owning as well as procuring equipment, a better understanding of the costs associated with operating, maintaining and disposal of the equipment is essential’ (The Acquisition Handbook, Edition 6—October 2005, p 13). 7 Ev 45 8 Defence Committee, Eighth Report of Session 2002–03, Defence Procurement, HC 694, paras 71–84 9 Defence Committee, Sixth Report of Session 2003–04, Defence Procurement, HC 572-I, paras 78–82 10 Defence Committee, Fourth Report of Session 2004–05, Future Capabilities, HC 45-I, paras 49–56 and paras 124–130 6 Future Carrier and Joint Combat Aircraft Programmes Scope of our inquiry 4.