Britain’s £10,000,000,000 Fiasco

ImageLondon Sunday Times
March 25, 2012
Pg. 16

Britain has no aircraft carrier and new ones won’t be ready for years. Worse, ministers don’t even know what type of fighter will fly from them. Tim Ripley investigates.

Last Monday morning Britain’s Navy — or what is left of it — seemed to have lost its rudder and started sailing in circles. Rumours were rife of yet another change of tack over plans for two expensive new aircraft carriers. Senior officials and top commanders were pressing to make a drastic change in the type of aircraft that would fly off the carriers, claimed media reports. The prime minister summoned Philip Hammond, his new defence secretary, to find out what was going on.

Inside No 10, Hammond, a multi-millionaire businessman who became defence secretary only in October, made his pitch. Plans to equip the carriers with catapult-launched Joint Strike Fighters (JSF) were not affordable, he said. The cost of the catapults had soared to nearly £2 billion, explained Hammond, and would bust the Ministry of Defence budget.

Not for nothing have MoD officials dubbed their secretary of state “Forensic Phil” for his expertise with financial spreadsheets.

Hammond wanted to switch back to the original choice of fighter: a short takeoff and vertical landing version, cheaper overall because although the planes were more expensive the catapults were not needed.

The meeting did not go well. “We knew it would be a tough sell to the PM,” said one of Hammond’s advisers. Quite apart from the complexities of the planes and costs, there was a matter of politics. David Cameron had personally announced the selection of the catapult-launched fighter and in the process had demolished the Labour government’s choice of the jump-jet version.

He had described the jump-jet as “more expensive and less capable version” and a “mistake”.

Now here was Hammond wanting him to do a U-turn and revert to that “mistake”.

Cameron told his defence secretary to run the numbers again. He also wanted Hammond to square any change with the Americans and French, who had agreed with much fanfare to set up joint carrier operations with the Royal Navy.

Cameron’s verdict was a blow to Hammond who had planned to tell parliament tomorrow that he had finally balanced the MoD budget. That announcement was unceremoniously dumped as he went off to check his sums.

Both Cameron and Hammond are determined not to plough ahead with an excessively expensive option simply to save the government’s blushes. This weekend the prospects for the flagships of Britain’s fleet remain in disarray. The vessels are already over their original budget and behind schedule; nobody knows what sort of plane will fly off them; and it will be at least 2020 before the country once again has a fully functioning ship capable of launching fighter aircraft.

Admiral Lord Alan West, a former first sea lord, summed up the situation as a “mess”. He added: “We have a saying in the navy — order, counter order, disorder.”

Labour — sidestepping the fact that it began the whole carrier project — denounced the affair as “one of the biggest public procurement messes for many decades” and accused Cameron of “squandering millions”.

How did a nation with a proud maritime history end up with such a £10 billion debacle?

EVEN for the MoD, whose procurement bungles include helicopters that cannot fly in clouds and contracts more expensive to cancel than complete, the aircraft carrier saga takes some beating.

The order for two ships — each 65,000 tons and 920ft long — was announced in 2007 after a decade of design work by the then Labour government. It envisaged them using jump-jet F-35B fighter jets.

With the arrival of the coalition government, Liam Fox, the Tory rightwinger, swept into the MoD as defence secretary with an agenda of radical reform. Within days a strategic defence and security review had been announced.

At the same time, George Osborne set in train his strategy to tackle the nation’s huge debts. Big-ticket items such as the aircraft carriers were firmly in the chancellor’s sights. Only fierce resistance from the navy’s top brass and Fox prevented Osborne cancelling the ships. Instead the project was scaled back. Cameron announced that only one carrier would enter service and the other one would be mothballed or sold.

The number of aircraft was also cut from 138 to just 50, saving a fortune as each jet was estimated to cost about £100m. However, to get a “bigger bang for his pound”, Fox also persuaded Cameron and Osborne that the type of JSF should be switched to the catapult-launched variant known as the F-35C.

The aircraft, which is simpler because it does not have to do vertical landing, was cheaper and had lower running costs, said Fox. It was also more powerful and could be seen as a real “first-division aircraft”; only the American and French navies used catapult-launched aircraft. This, said Fox, would reassure our allies that Britain was still a serious player on the global stage.

There was one big problem: the experts had not been consulted. Most naval officers heard about the decision to buy the catapult jets when they saw it on television. One former crew member of HMS Ark Royal, the navy’s flagship decommissioned ahead of time last year, said: “We watched Cameron ordering our ship to be scrapped on television. Then people started asking how are we going to do this [switch to the catapult JSF]? It’s 30 years since we had a catapult and there was no one left in navy who knew anything about them.”

Britain last had a carrier equipped with catapult launchers in 1978. There was a further complication, too. The US navy had stopped buying steam-powered catapults and was developing electromagnetic ones known as Emals (electromagnetic aircraft launch system). No such system was yet in use on a ship, and the true costs of installing it were uncertain.

Navy staff were dispatched to America to visit the handful of companies making the Emals’ catapult and arrester hook — or “cats and traps” gear, as it is known. When their reports landed on ministers’ desks, they made uncomfortable reading. The estimate of between £800m and £1.2 billion to buy and install the equipment was double the amount Fox and MoD officials had expected.

That Fox was a risk-taker became clear last year when his dealings with Adam Werritty, a close aide, were revealed. Faced with claims that Werritty, who held no official position, had accompanied the defence secretary on numerous overseas trips and used business cards describing himself as an adviser, Fox was forced to quit.

When Hammond took over, he discovered the cost of installing “cats and traps” on the carriers had risen even further: it would now be £1.8 billion and would have to be paid in the next three years. The cost of training pilots would also be more than expected, potentially wiping out the cost savings from dumping the jump jet.

It was a shambles. One former navy chief said it was “extraordinary that before such a big change they had not done the sums. It is an unbelievable indictment of politicians and ministry of defence procurement process”.

WHAT should be done? Military officers see the debate in terms of capability more than cost, regarding the jump-jet version of the JSF as a mistake, just as Cameron originally concluded.

Admiral Sandy Woodward, the commander of the 1982 Falklands taskforce, said the government should stick with the catapult jet: “Philip Hammond is letting the cash problem drive him into bad decisions.”

Commander Nigel “Sharkey” Ward, a retired Sea Harrier fighter ace from the Falklands war, pointed out that the jumpjet JSF, which has shorter range and smaller bombcarrying capacity, was still suffering from technical delays and cost overruns that might cause the Pentagon to cancel its production of this variant. “They nearly did this last year,” he said. “Such a decision would leave Britain high and dry with no fast jet combat aircraft to operate from the carriers.”

Complicating matters further, the US navy says the MoD has still got its figures wrong — and that the catapults will be much less expensive than the MoD fears. America is keen for Britain to have a carrier where it can base a squadron of its own catapult-launched jets.

This poses a tricky dilemma for Cameron. Last week, as the chancellor was preparing to cut pensions and child benefit, the prime minister was giving little away about whether he would spend up to £2 billion on some catapults.

Tackled on the issue at prime minister’s questions, he obfuscated, saying: “We will look at all the evidence and all the costings … I make this pledge: if the costs and facts change, we — unlike previous governments — will not just plough on regardless or make the wrong decisions for political reasons.”

Other insiders say Hammond’s choice of the jump-jet version of the JSF is favoured in powerful quarters. Osborne, say Whitehall insiders, has always been lukewarm about the catapult-launched jets.

The Tory MP John Glen, a member of the defence select committee, supports Hammond assessing all the information: “It is better to come to the right conclusion, even if embarrassing in the short term.” Whatever the outcome, Britain faces the uncomfortable reality that it will have no operational new aircraft carrier for almost a decade. At the moment, said Glen, “We don’t have anything”.

In an effort to save money, Cameron last year chose to scrap HMS Ark Royal, and its fleet of 74 Harrier jump jets were sold off cheaply. HMS Illustrious, which will be decommissioned in 2014, handles only helicopters.

HMS Queen Elizabeth, the first new super-carrier, should be ready in 2016 but will only be used by helicopters. The second carrier, the HMS Prince of Wales, is due to be fitted with a catapult for fighter jets. It is expected to be launched in 2018 and be ready for operations in 2020, at which point HMS Queen Elizabeth would be mothballed or sold.

Meanwhile, Iran is at loggerheads with America and Israel, and Argentina is rattling its sabre again over the Falklands. And if Britain needs to deploy fighter jets to operate from sea? Well, it can’t.

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