Sunday, 8 March 2009

The watchdog that doesn't bark

Governments make mistakes. For a whole variety of reasons they mess up. That is the very nature of things and it is why over time there has developed a system of checks and balances, all aimed at making the government accountable. The system is also devised so as to detect mistakes early, remedy them where possible and, crucially, prevent repetitions.

It was with that in mind that we wrote this piece which also referred to this piece, pointing out the vital role of parliamentary select committees, in making the system work.

I would not be the first to observe that the committees do not function very well, but have indeed noted how one committee in which we take a special interest – the Defence Committee - functions very poorly. Therefore, I thought it would be useful to write a series of case studies on the Defence Committee. The idea is to pick a series of equipment projects that went wrong so to see what the committee did about them, and whether its activities could have been better handled – with some observations then on what could be done to improve the performance.

After this first one, which is below, I will post the case studies separately, and then write a consolidating post drawing out observations and conclusions, bringing them all together – with input from the forum where relevant – in order to frame recommendations. If this works as an exercise, I will then revamp it as a paper, possibly for publication.

For the first case study, I have chosen the Phoenix unmanned aerial vehicle project, which I first looked at in September 2006 in the context of the Nimrod crash in Afghanistan.

The flight of the Phoenix

Last year, on the tenth anniversary of its entry into service, the Phoenix unmanned aerial vehicle (UAV) was formally taken out of service.

In fact, though, it had last flown operationally in May 2006, giving less than seven years of operational service for the cost of £345 million since its inception.

From the start, the Phoenix programme was a disaster. The requirement emerged in the early 1980s as a battlefield UAV to support the British Army, originally designed for artillery spotting. As so often with these projects, though, there was "mission creep" and the final specification emerged to encompass a fully-fledged surveillance aircraft, something for which the original design had never been intended.

Nevertheless, the GEC/Marconi (later to become /BAE Systems) design was selected by the MoD in February 1985 with a planned in-service date of 1989. Although the first example flew in 1986, a the Defence Select committee in 1990 heard from the MoD that difficulties had been experienced with the datalink, which could lead to loss of contact with the air vehicle. The system had become known as the "Bugger Off - because often it did not come back once it had been launched.

There were also computer problems with the ground station and recovery problems. The aircraft was parachute-recovered, upside-down, with the landing impact to be taken by a shock-absorbing plastic hump. Frangible elements of the fuselage were supposed to breaking off to absorb the impact. Unfortunately, other non-frangible elements of the air vehicle were also sustaining considerable damage.

This left the British Army during the first Gulf War having to rely on ageing Canadair CL-89 surveillance UAVs, in service since 1972, which had to be recovered and film processed before targeting data were available. Artillery batteries more frequently were forced to use targeting data provided by US Marine UAV, the RQ-2 Pioneer (pictured left), an aircraft derived from an Israeli design and brought into service by the US in 1986.

The problems with the Phoenix had not by any means been fully resolved by 1994, by which time other concerns had emerged. Crucially, the machine had been originally intended for use in Central Europe and could not cope with hot-and-high conditions, such as in the Gulf. With the added payload the original machine had never been intended to carry, it needed a more powerful engine. In the financial climate of the time, however, that option was abandoned.

By early 1995, Flight International was reporting that the Army was considering cancellation. Six years behind schedule, it had already cost the MoD £227 million - double the original estimate when the deal had been signed.

In March, with the in-service date having already been extended to October 1995, the MoD was admitting that, if it opted to continue with the project, a further two-year minimum delay would be incurred, seeing it enter service by the end of 1997 - eight years late. Cancellation was being "very seriously considered". Not least, the method of recovery continued to cause unacceptable levels of damage.

With so much invested, however, the company was given another chance. In April, the then procurement minister, Roger Freeman, announced that the manufacturer would be allowed to complete an "additional programme of work" to resolve the remaining technical difficulties, lasting about a year, at the contractor's expense. Later that month, MPs were told that potential alternative systems were being considered, in case the Phoenix did not come up to standard. Significantly, highly successful Israeli machines were being examined.

In August 1995, James Arbuthnot was appointed as defence procurement minister. It would now fall to him to make the crucial decision as to whether the programme would continue or whether an alternative would be purchased. Any decision would be highly contentious and cancellation would be highly embarrassing for the government. Already it had been forced to abandon the ill-fated Nimrod airborne early warning aircraft, produced by the same GEC/Marconi/BAE Systems combine, with the airframes having been scrapped in 1991 at a loss of over £1 billion.

Mr Arbuthnot was asked briefly about Phoenix in the October but with the review underway, he batted down the question. With a year's grace bought by the "additional programme of work", it was not then until the anniversary of the announcement on 25 April 1996 that Mr Arbuthnot was called to give an account. By then, the US had been successfully operating its Israeli-designed machines for ten years. However, the announcement about the future of the project was not ready. Mr Arbuthot hoped to be able to make one "before the summer recess".

It was down to Flight International, therefore, to come up with any information on what was going on. From this it was learned that GEC was to resolve the landing problems by equipping the UAV with an air bag, similar to those used in motor cars, to absorb impact of landing. This was precisely the option used on the 25-year-old Canadair UAV which the Phoenix was to replace. There was also talk of fitting a more powerful engine, but nothing was to come of that.

Nothing was to come of Mr Arbuthot's announcement before the summer either. In fact, there is no record of him ever having made one to Parliament, a strategem which would have neatly avoided any questions in the House. Instead, the news of his decision was conveyed by an MoD press release in October, which broke the news: It declared: "We now have confidence in the cost-effectiveness, tactical performance and reliability of the system to meet the army's requirements".

This came to light in Parliament only because it was mentioned in a debate by an opposition spokesman, Dr John Reid. Phoenix was to become operational in 1998, nine years after originally planned, with 198 eventually delivered. Complaining of the delay, Reid declared:

We do not blame the Government for every delay. However, any objective observer who examined the pattern of consistent delays would conclude that it was the only area where the Government appeared to have a strategy. I am reminded that Napoleon once instructed Bourrienne not to open his letters for three weeks and, after that time, expressed satisfaction that most of the correspondence had resolved itself. I have a feeling that the Secretary of State is adopting a Napoleonic strategy to defence procurement: if we delay indefinitely, the need will go away. But it will not.
On 1 May 1997, Tony Blair's New Labour had won the general election and Mr Arbuthot lost his ministerial job. But his legacy, of which Phoenix was part, was to live on. Within months of the Phoenix becoming operational, it was deployed in the Balkans, coinciding with the day that Yugoslavian/ Serbian forces began their withdrawal from Kosovo on 9 June 1999. Eighteen months after it had been accepted into service, 16 machines had been lost or destroyed in the course of 200 sorties, including 13 during operations. Ten were lost or destroyed in Kosova and three more during further operations the following year.

Mr Bruce George, chairman of the Defence Committee in 2000 was less than complimentary about the system. "That is a pretty deadly weapon," he said, "because they do tend to drop out of the sky causing damage to anyone standing underneath. Was that a secret weapon? It was probably quite an accurate weapon." That brought from Vice Admiral Sir Ian Garnett, then Chief of Joint Operations, that, "Of course we would like to have better unmanned aerial vehicles to give us intelligence and perhaps we might have that capability in the future."

The capability provided by the Phoenix, however, was fully recognised by the Defence Committee it remarking in January 2001 that, "The momentum behind developing the capability of Phoenix to provide targeting data to strike aircraft must be maintained."

If that momentum was maintained, it did not extend to the Phoenix programme. The system was deployed during the invasion of Iraq in 2003, with 89 machines being sent. Between March and 3 April, some 23 machines were lost with 13 damaged but repairable. The equipment was openly described as a "dismal failure". Despite that, the Defence Committee, reporting on the war in March 2004 was uncritical. "We are pleased," it said, "to hear that, despite its chequered past, Phoenix made a valuable contribution to the operation."

Nevertheless, so obviously inadequate was the machine that the MoD, under new management since Arbuthnot's time, had already determined on a replacement. Rejecting the proven but very much larger US Predator model, it had an Israeli-built machine in mind, the very option that Arbuthnot and his predecessor had been asked about in 1995 and 1996, and which he had rejected. This was to be the Watchkeeper programme, a licensed-built version of the Elbit Hermes 450, with a projected in-service date of 2006.

One MP on this committee, however, expressed concern that the programme could not be "more aggressively accelerated". This was Gerald Howarth, on 21 May 2003, questioning Sir Peter Spencer KCB, then Chief of Defence Procurement. Sir Peter's answer was very revealing. The development could not be speeded up, "because we are buying a system of which the UAV is a component," he said.

This referred back to the "Strategic Defence Review – New Chapter" published in July 2002 in which the Government had committed to a major reorganisation of defence forces, in particular the Army. It was to introduce a new concept called the Future Rapid Effect System (FRES), linked into a vast computer and communications network, introducing what was known as a "network-centric capability".

Thus, at the time Sir Peter was being questioned, attention was focused on a high-tech "future war" while, at the very same time British troops were engaged in a vicious counter-insurgency campaign in Iraq, equipped with the Phoenix which, as was well known, could not operate in hot conditions – when indeed it operated at all.

This notwithstanding, in November 2003, Defence Minister Adam Ingram assured the House that the Watchkeeper programme was "on track to deliver a tactical UAV capability from 2006."

That, however, was not to be. In July 2004 the "preferred bidder" for Watchkeeper wasannounced, for a contract that was expected to cost £800 million. And not until the following July did then defence secretary John Reid announce the order. But the in-service date was no longer 2006. The capability would be delivered "incrementally" from 2010. This was from the same Dr Reid who in 1996 had complained about the delays in introducing the Phoenix.

Arguably, it was at this point that the Defence Committee might have intervened. As of July 2005, two crucial issues were evident. Firstly, that the Phoenix system was seriously substandard and also inoperable in Iraq during the summer months. Secondly, there was now no prospect of an early replacement. It might have even gone back earlier to 2003, when questions could rightly have been asked. But two years later, there can have been little argument that the Army urgently needed an effective UAV.

That intervention would have been valid and effective is unarguable. In May 2007, reported a month later the MoD, recognising for itself the critical shortage of UAVs, issued an Urgent Operational Requirement (UOR) for a $110 million deal to buy Elbit Hermes 450 UAVs direct from Israel (pictured above), to fill the capability gap – a year after the Phoenix had been withdrawn from Iraq. The first machines were delivered to Iraq and operational by September 2007, a mere four months later. By then it was too late to affect the outcome.

More than a year earlier, however, in mid-2006, another opportunity had arisen for Defence Committee to intervene. It was then gathering evidence on operations in Iraq. That year, and since the general election in June 2005, the Rt Hon James Arbuthnot had taken over as committee chairman – the very man who as procurement minister in 1996, ten years earlier, had given the go-ahead for the production of the Phoenix.

Under his chairmanship in June 2006, the committee took evidence from the then Defence Secretary Des Browne on a range of problems, including the deficiencies of the Snatch Land Rover. But neither then, nor in the report, published on 10 August 2006 were UAVs mentioned.

In fact, it took until May 2008 before Mr Arbuthnot's committee focused on the subject of UAVs, in an investigation devoted to that subject. In its report, published in July 2008, Mr Arbuthnot's committee noted that the acquisition of UAVs, which by then had included the successor to the Predator, known as the Reaper, and Hermes 450 were providing our Armed Forces with "battle winning capabilities", and were "proving effective in the counter-insurgency style of operations which they face in Iraq and Afghanistan."

However, evidence was submitted by the MoD in a written memorandum to the committee, which noted:

Limited range full motion video surveillance is provided by the Phoenix tactical Unmanned Air Vehicle (UAV) system. Originally designed for operations in central Europe, it has not proved suitable for supporting ongoing operations in the more demanding climatic and geographical conditions in Iraq and Afghanistan.
A memorandum from the Royal Aeronautical Society also noted that the "UK experience with UAV technology has not been entirely happy, pace the Phoenix programme".

However, there was no reference to the Phoenix in the conclusions and recommendations section. As to the purchase of the Hermes 450s, the committee had asked why the requirement for the UAVs acquired as UORs had not been identified earlier. It had been told that "in many cases they were identified earlier". The Hermes 450 UAV had been acquired as a "stop-gap" filler because the Phoenix UAV system could not be operated effectively in a hot and high climate. To that, the committee responded:

The MoD has acquired UAV systems for current operations as Urgent Operational Requirements (UORs). In its response to our Report, we expect the MoD to set out its future plans for the UAV systems acquired as UORs and where the future costs fall within the defence budget. We also expect the MoD to set out its longer term strategy for acquiring UAVs systems, given the concern expressed by industry that keeping the UAV systems acquired as UORs in service for a long time could undermine the UK’s national capability in this area.
Thus did the committee convey the concern of the trade body representing the defence contractors, the SBAC. It wanted: "the balance being maintained between developing national capability and supporting UOR capability for urgent operational requirements." Roughly translated, that meant that the defence industry did not want too many off-the-shelf purchases in case it reduced the sales of custom-built machines. And that was the extent of the committee's concerns on UORs.