Search and Rescue Service

David Laws Excerpts

Tuesday 1st March 2011 Westminster Hall

[Sir Alan Beith]

Some of the rescues are done in that way even now. Not all SAR services are provided by military crew, but a high degree of training is required, and there must be consistent co-operation with local organisations such as mountain rescue teams. That depends on consistent good working relations. The military operators such as RAF Boulmer and 202 Squadron have done that particularly well. In general I think that most people feel more confidence about military crew, because they know the high standards of training that are involved. However, it is quite an expensive way to provide the service, and other options probably should be considered. Some of the training and experience that the military has, and some of its operational practices, would need to be transferred if there were any wider civilianisation of the service. The hon. Gentleman is right to raise that as a matter of concern.

The review announced by the Chief Secretary was about cost-effectiveness, against the background of a huge deficiency in defence capital programme funding. It was not about the issues that finally brought down the contract. Indeed, Ministers were on the point of announcing the final decision on the contract. Various other things had been going on, however. There were rumours that as part of the comprehensive spending review the Government had proposed that the project should be rewritten, so that an entirely civilian work force would operate the service, rather than a mixture of civilian and military personnel. Of course, if the Government had done that, it would have created a big saving, because it would have taken about 66 higher-paid military personnel out of the project, and probably created up to an additional £100 million over the lifetime of the project in personnel costs for the contractor. It also sidestepped the problem of some personnel being subject to European working time directive rules, while others were not. That issue was rumbling in the background.

On 16 December a dramatic announcement was made—I think that it was the very day on which we were to have heard the final decision about the contractor. The Secretary of State for Defence announced that information had come to light about the preferred bid in the search and rescue competition, which required clarification. The preferred bidder had informed the Government of irregularities in the conduct of the bid team, which had only recently come to light. The irregularities included access by one of the consortium members, CHC Helicopter, to commercially sensitive information about the joint Ministry of Defence and Department for Transport project team’s evaluations of industry bids, and evidence that a former member of that project team had assisted the consortium in its bid preparation, contrary to explicit assurances given to the project team at the time.

I believe that a considerable time previously a letter went to the Ministry of Defence warning it of potential irregularities of that nature. One of the matters that I hope is being investigated is why that warning was not heeded. Of course many other matters are being investigated as well, not just by the Ministry of Defence but by the police. A former member of the MOD team, subsequently employed in the industry, is, I believe, the subject of investigation. I do not know to what extent others are as well.

On that basis, we were told that

“the Government have sufficient information to enable them to conclude that the irregularities that have been identified were such that it would not be appropriate to proceed with either the preferred bid or with the current procurement process.”

The statement continued:

“The Department for Transport and the Ministry of Defence will now consider the potential procurement options to meet future requirements for search and rescue helicopters in the United Kingdom, including options to maintain continuity of search and rescue helicopter cover until new longer-term arrangements can be put in place.

We will make a further announcement once a way forward has been agreed.”—[Official Report, 10 February 2011; Vol. 523, c. 17WS.]

That brings me to the focus of today’s debate, which is what progress has been made in reaching those decisions and when we are likely to get a proper announcement about it. Other factors could be at work. There is the potential for legal action involving contractors. An unsuccessful contractor might want to pursue the successful one over bid costs incurred. There might be legal action between the Government and a contractor. The Minister may be inhibited in what he can say about that, but it could be going on at the same time.

What will happen next? The Sea Kings were due to be withdrawn by 2016 or 2017. They are ageing and they continue to need substantial levels of maintenance to keep them operating. Those of us who keep in close touch with the search and rescue service know that there are many occasions when the Sea Kings are not available to fly. I have seen that for myself. I was flying in a Sea King that returned to base because the radio system failed. The other aircraft was on land having returned from necessary maintenance work, and was not yet tested and available to take over. At that point therefore neither was available. There have been moments when no helicopter has been available at Leconfield, Lossiemouth or Boulmer at the same time. That clearly is a situation we cannot allow to continue.

[Mr David Laws (Yeovil) (LD)]

I congratulate my right hon. Friend on securing an extremely important debate. I urge him to keep an open mind about whether a life extension to Sea King could be a short and medium-term option. Is he aware that in the United States, Germany and India the Sea King fleets, which are all older than ours, are having their lives extended, and that on the whole Sea King availability recently has been quite good?

[Sir Alan Beith]

I am grateful to my right hon. Friend who, from his constituency, knows well the work of Westland in that area. I have an open mind about whether a major refit of at least some of the Sea Kings could be carried out. It is one of the options to be considered. However, we cannot simply go on as we are with relatively short-term maintenance of the Sea Kings.

The personnel who work in search and rescue with the RAF and the Royal Navy are also in limbo. That is also true of the Maritime and Coastguard Agency personnel, although they already have a contract; but it expires within the year, I think, so they too are in a state of uncertainty. The Government need to get a grip on the situation and some people need to know pretty soon, for their careers, what will happen. Are they likely to have a future in search and rescue, whether on the military side or as contractors’ employees? What will happen?

We also need to bear in mind some of the warnings given during the contract process. My right hon. Friend the Member for Orkney and Shetland (Mr Carmichael), to whom I am sure the Minister will want to listen, as he is now the Government Deputy Chief Whip, said in February 2010:

“It is essential that this contract…is better negotiated and has fewer loopholes than the interim contract we had for the last few years”—

the MCA contract. He said that the contract must protect against situations like the one that arose in 2008. The back-up helicopter based at Sumburgh was off-station for a whole week, but the Department for Transport and the MCA were powerless to do anything about it. He also wanted to see the new service rooted properly in the communities that it serves rather than being dependent on a stream of temporary pilots and support officers constantly being shipped in and out.

What are the options? What are the Government considering? First are the short-term immediate continuity arrangements. The RAF will carry on, as it always does. It has the resilience and determination to cope in situations, whether created by Governments or world events, that would challenge many other organisations, and I have every confidence in its ability to do so. However, we need answers on how long it will be before a new scheme replaces the present arrangements. Personnel have careers to plan, and MCA helicopters are contracted only until next year. As I said earlier, the Sea Kings are now extremely difficult to keep airworthy. How long will this situation continue? What level of refit of the Sea King is possible? Would a major upgrade of the Sea King be a short-term option, or would it be too expensive? Should it therefore be considered as a longer-term measure?

What is being considered in the longer term? There are obviously several options. One is to retender a version of the contract. The Government clearly ruled out retendering the contract in its present form when they made their announcement, so they have obviously given it some consideration. There are several reasons why retendering is not the answer. There were too many flaws in the original contract, some of which I referred to earlier; once it became impossible to continue it, the questions that had arisen while it was being considered then needed to be considered again. At that stage in the contract process, it may have been too late to resolve those questions, but when the matter was reopened they needed to be reconsidered.

Another reason why it would have been difficult to retender was that experience has shown that the procurement process is not up to the job. To go back to the same process and risk another failure was not something that the Government could properly have done. We have seen many other weaknesses in the defence procurement process, which has led many to lack confidence in it.

In some respects the previous contract was not cost-effective, which is why it was under review. The reason why the Government did not stop it as a result of the Chief Secretary’s review, but were about to announce that it would go ahead, was that the contract had gone too far to be stopped and the gap would be undesirably long if the process had to be started again. However, events have now forced us into that very gap. The Government concluded during the cost review that it would be unwise to have such a gap, but they now have one. That puts a particular responsibility on Ministers to tell us how they intend to deal with a situation that they felt obliged to avoid until dropping the contract became inevitable because of the irregularities that were found. Simply retendering does not seem to be a proper option.

Another alternative would be to lease helicopters for use by existing RAF, Royal Navy and MCA-based crews. There are various options, but even in the short term it may be necessary to have short leasing contracts. What else is the MCA to do when its existing contract expires? What can the RAF do if it is found that a major refit of the Sea Kings will be too expensive to be considered as a short-term measure? Will aircraft have to be leased? The option of leasing of helicopters is clearly on the table, but will there be a new form of contract, involving both leasing aircraft and crew, with some of the features of the previous contract but rather better developed?

There is significant private sector interest in providing helicopters to the oil industry, the police and other services where they are essential. The market is not devoid of other operators, but as we heard earlier, the service requires a particularly high level of skill and training and it has to serve a wide range of functions. Rescues take place at sea, in dangerous coastal areas, in mountains, in fog—conditions that would defy many traditional commercial operators. It would be a pretty demanding contract, and the public are entitled to know that it will be carried out by people with the skills and equipment to do so.

--- Later in debate ---

[Mike Penning]

As my right hon. Friend will realise, we are at a very early stage, not least because there are legal issues—he mentioned them in his speech—which are very difficult and technical. The police are fully involved and there is a full inquiry going on, so I am very restricted in how far I can go down that line. My right hon. Friend is absolutely right that others may decide to take action in the civil courts, and it is entirely down to them to decide that. We have to ensure that the existing contract is not affected in any shape or form by the private finance initiative contract. It is completely separate, but it has been lumped in with the existing one, certainly in the media. That contract is close to its end time, and we have to negotiate best value for the taxpayer as well as ensuring that we have the service provision. At this stage, I am not in a position to say, “This is the mechanism that we’re going to go forward with,” but we will announce it as soon as possible. This will be led by the Department for Transport, and that decision has been made.

[Mr Laws]

Do the Minister’s comments imply that most or all of the expenditure on the long-term solution is likely to fall outside the existing spending review period?

[Mike Penning]

The PFI contract went way beyond the existing spending review period, and so we do not know how quickly we can get this going. It is crucial that we get it right, so that we do not get anywhere near this position ever again. The PFI was signed off for this spending review period, but it went way beyond it, as I am sure my right hon. Friend is aware. The key is that the interim measures, which must be in place, are what it says on the tin—“interim”—and that we then have a proper contract. We have not just gone to another re-bid, we have said, “Whoa, let’s look at this another way.” That will take longer than if we just said, “Okay, there’s a few mistakes here. Someone’s been naughty, and we’ll do it this way.” That would be the quick option, but it is right to say, “Let’s put this completely on hold and look fundamentally at the contract.”

[Mr Joe Benton in the Chair]