The claim
“In tough times £250m has been squandered while our forces are having their allowances cut.”
Jim Murphy MP, Shadow Defence Secretary, 10 May 2012
The background
Jim Murphy has challenged the government to “come clean” about how much its aircraft carrier u-turn has cost the taxpayer – which he’d heard could be as much as £250m.
“This is an embarrassing shambles,” he said, after Defence Secretary Philip Hammond went from outlining a bill of something between £40m-£50m only to admit later that it could be as much as £100m.
Mr Hammond insisted however that the bill would be “much less than £250m”.
Who’s right? FactCheck investigates.
The analysis
In November, Conservative defence minister Peter Luff told the Commons that the MoD had spent around £13m looking into the conversion of the Queen Elizabeth carrier and that the MoD had approved expenditure of up to £48m for “study work on conversion” up to the end of March 2012.
The MoD told FactCheck that the cost of a “conversion appraisal” actually come in at around £40m – so slightly less than expected.
However, in an interview with Channel 4 News today Mr Hammond told us there were also design costs to be considered. He told us: “I can’t give you a definite (total) figure. I can tell you what we’ve spent on design development and engineering work on the carrier variant – that’s about £39m so far”.
The minister also revealed that standing that design programme down, and reverting to fitting the “ski jumps” to the carriers, would incur additional costs. How much, we don’t know.
But that’s not the end of it. There are two types of “cats and traps” – the gear that catapults the aircraft off the flight deck and ‘traps’ it when it lands.
The UK government planned to buy the US version known as Electro-Magnetic Aircraft Launch System (EMALS) catapults and the Advanced Arrestor Gear (AAG).
Indeed, the US Defence Secretary Cooperation Agency notified Congress in November of a possible foreign military sale to the UK of EMALS/AAG, associated equipment, parts, training and logistical support.
The contract was to be with Californian drone maker General Atomics and was worth an estimated $200m (£123m).
General Atomics is the only company that produces the gear, according to the editor of Defence Management Journal Anthony Hall.
While this was just a “proposed sale”, and FactCheck can’t find evidence of its conclusion, Mr Hammond did admit to Channel 4 News today: “Some of the work that’s being done in the US on the EMALS cats and traps system is done under a US government programme of foreign military sales which may entitle the contractor to some compensation for his standing down costs.”
Mr Hall told us it was obvious some arrangement was already in place, even if a contract hadn’t been signed.
Plus, the Royal Navy’s Capital Ships Team (which is helping to assemble the carriers), told the Defence Management Journal back in January: “We are working closely with both the US Department of Defense (DOD) and General Atomics to develop a UK specification of the EMALS. Good progress has been made so far on the EMALS test programme, and, to date, four different aircraft types, including the F-35C Joint Strike Fighter, have been successfully tested.”
How much will this cost us? Mr Hammond told us: “That’ll be a negotiation that we have with the supplier but we don’t expect that to be large sums of money.”
The verdict
Labour was quoting a Daily Telegraph story in which a defence source put the cost at £250m. While FactCheck can’t verify this figure, we’ve found out that design and engineering costs have come to £39m so far – and Mr Hammond told us that standing these programmes down will cost more money.
Then there’s the £40m for the consultation work done on converting the carrier (or the “conversion appraisal”). So that’s £79m accounted for.
And it looks like there will be more money to pay out for standing down the foreign military sales deal with the US government for that $200m contract with General Atomics. As Mr Hammond: “That’ll be a negotiation that we have with the supplier but we don’t expect that to be large sums of money.”
Overall it could be a lot less than £250m. Mr Hammond told us: “It will be somewhere between £40m and £100m in total, including the engineering work to fit the ski jump decks to the carriers.”
We note however that this is rather a wide margin, so it’s hardly surprising that Mr Murphy wants clarification.
By Emma Thelwell
Better than the several billion extra cost that using jumpjets will come to over their lifetime. And that ignores the fact that they aren’t as good!
This does not make sense as it shows why Britain tends to be so expensive. France has their version of the Typhoon which is their aircraft of choice and used on their aircraft carriers. The US has the F35 which is their choice. The UK, because it contributes to the manufacture of both aircraft, chooses to use both – doubling spares and maintenance costs. The only ‘advantage’ is that we can say we have a stealth aircraft – is this really an advantage? We are not a big enough country to do this. Successive Governments have not been able to separate the advantages of public and private situations. So they introduce legislation, in public situations, to duplicate when it is not necessary, which increases costs. Take today’s announcement of the London bus problems for example: 21 bus companies duplicating back office staff, great for employment but raising costs. The proof of this? A 7 day travelcard in London £54.00, Vienna £12.50!
MOD procurement usually results in immense overspend.
Now, with so many private companies involved in the chain and each having to make a profit on the deal, the differential between the final cost and actual hardware obtained grows ever bigger. The big ‘privatisation’ con continues in all areas.
Isn’t it ironic that all our ‘efficient’ privatised companies are now mainly owned by ‘inefficient’ state-owned overseas companies???
Factcheck should do a bit of “lateral investigation” when checking. I understand that there is a problem with the F35C arrester hook. It does not always catch the wire. There may have to be a major redesign of the arrester gear. No one in the UK press seams to want to mention this.
Suppose our defence policy were simply to defend the North Atlantic and European theatres? Would we then need sophisticated aircraft carriers at all? Probably, we’d only need ones capable of mounting simultaneous helicopter and VTO operations. Those would be sufficient. And that’s what was on order, and being built, in 2010?
Why does the coalition try to find fault with every policy they inherited?