TNAG-0540-FCO40-635-Strength-of-garrison-in-Hong-Kong-1975 — Page 99

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SECOND REPORT FROM

expenditure on identified major projects; the balance related to a host of smaller items and to items at the further end of the programme which were not yet fully defined (Q.166). Taken with the scale of savings projected for the early 1980s, where a reduction from £2,000 million to £1,550 million' a year is now planned, we infer that the previous equipment programme was necessarily provisional and, possibly, unrealistic.

28. So far as equipment is concerned, the review appears to have followed conventional lines and we have not been informed of any re-consideration of the Ministry's philosophy as to the weapon systems required during the review period. In particular we should welcome consideration of a slightly less ambitious approach to the problem of providing new equipment. The Ministry have occasionally appeared to aim for so high a standard that either projects have had to be abandoned or sacrifices have had to be made elsewhere in the defence programme in order to limit or accommodate escalating costs. There can be no doubt that a few major equipment projects, of which MRCA and the cruiser are currently outstanding examples, tend to dominate the defence procurement budget. We consider that the Ministry should be prepared to accept a slightly lower standard than might otherwise become available if it means that equipment can thereby be brought into service earlier and at lower cost. An example of a relatively simple but effective item is the Jaguar aircraft. In the case of MRCA, the very high cost must have been a factor in the decision to defer United Kingdom deliveries, thereby leaving the RAF to operate existing aircraft that much longer. We return later to the way in which collaboration can also affect equipment procurement programmes. We suggest that the Ministry should take these factors into account in determining both their operational require- ments and the specifications for major weapon systems, particularly for items such as the Air Defence version of MRCA (where the Expenditure Com- mittee of Session 1973-74 previously recommended a stringent review3) and the successor to the Chieftain main battle tank, where there may be a temptation to build in all manner of desirable but expensive refinements.

29. We are also concerned at the time taken to reach decisions on develop- ment and procurement of equipment, where delays may lead to uncertainty in industry and in the Services, and to increased costs in the long run. While the Ministry must naturally avoid jumping to premature conclusions which may be regretted later, we have formed the impression that they may some- times be so anxious to avoid a wrong decision that they put off taking any decision at all. An apparent example, on which we have taken evidence, is the choice of a helicopter-borne anti-tank guided weapon system, where a decision as to which of three competing systems to adopt has been deferred since early 1974. The maritime Harrier is another example of a project where the decision appears to have been unnecessarily long delayed.

R & D AND COLLABORATION

30. The Ministry stated that over the review period their proposals would save about £360 million' on Research and Development compared with the 1 As a result of the revised figures given on pages 34-35 the figure of £1,550 million should be £1500 million.

2 Evidence page 30, para. 37.

3 Eighth Report from the Expenditure Committee, H.C. (1973-74) 169, para. 15.

• As a result of the revised figures given on pages 34-35 the figure of £360 million should be £440 million.