14.1 |
Military equipment (post-conflict)
239.
When asked
whether he had been briefed on the threat from EFPs and
the
predicted
growth in the use of ever more sophisticated IED technology when he
became
CJO in July
2004, ACM Torpy told the Inquiry:
“Not
specifically EFPs. IEDs, yes … it was not a significant threat in
2004 when
I took
over and it grew …”120
240.
During
September 2003, the MOD’s cash requirement for 2003/04 had risen
from
£490m to
£1,152m. That prompted Mr Gordon Brown, Chancellor of the
Exchequer,
to impose
controls on the MOD’s management of its resources. That is
addressed in
Section
13.1.
241.
At the DMB on
1 October, Mr Ian Andrews, MOD Second Permanent
Under
Secretary,
explained that the MOD was now facing a near‑cash shortfall of
£1.1bn.121
Part of the
MOD’s response was to identify near‑cash reductions of £300m across
the
DLO and
DPA.
242.
Mr Andrews
had produced a paper for the Board that set out proposals for
those
reductions,
all of which were accepted. One measure was to defer £13m from the
FRES
programme
(needed to underpin its suggested procurement strategy), which
could
“delay the
programme by a few months”.122
243.
Considering
the Equipment Programme on 26 February 2004, the DMB was
told
by
Sir Kevin Tebbit that Treasury controls had rendered it
“unaffordable”.123
There
was
likely to
be no increase in resources and there was no scope to take risks.
He said that
any
additional enhancements “must have compensating
offsets”.
244.
The DMB
discussed Mr Woolley’s paper of proposed enhancements and
savings
measures,
including deferring the FRES ISD by a further year to December
2011.124
The DMB
said that this was a concern and frustrating:
“But there
was a tension between the need for a basic vehicle relatively
quickly and
a more
complex capability downstream.”
245.
The Assessment
Phase for the procurement of FRES was announced on 5
May
246.
On 24 June, in
the context of a wider DMB discussion about the risks of
meeting
the targets
on cost and time for major procurement projects, concern was
expressed
120
Public
hearing, 18 January 2011, page 62.
121
Minutes, 1
October 2003, Defence Management Board meeting.
122
Paper 2nd
PUS, 30 September 2003, ‘In‑Year Management: AP03
update’.
123
Minutes, 26
February 2004, Defence Management Board meeting.
124
Paper
Finance Director, [undated], ‘ST/EP04: Years 1 and 2’; Minutes, 26
February 2004, Defence
Management
Board meeting.
125
Report MGO,
9 July 2004, ‘MGO’s Report to ECAB 2004’.
43