CVF, the NAO and a lot of missing capability...

The National Audit Office report (NAO) into the decision by the UK MOD to change the procurement of the new carriers from the conventional to the short take off variant (CTOL and VSTOL respectively) has been released. The full report can be found HERE, and is well worth a read. At some 40 pages long, it provides a fascinating insight into one of the more controversial decisions taken in the last few years. 

The background to the situation was the decision taken in the 2010 Strategic Defence Review to modify construction of the two CVF vessels from carrying the VSTOL variant of the F35, to carrying the CTOL variant. This change would also allow the planned F35 buy to not only carry out the Carrier Strike mission, but also fulfil the RAF Deep Penetration Offensive Capability (DPOC) requirement, which in turn was borne out of the old Future Offensive Air System (FOAS), which was designed to replace the Tornado GR4. Under SDSR, the intent was that the RN would only operate one carrier, but with CTOL aircraft embarked, while the second hull would either be sold off or held in long term reserve.

Following an in-depth appraisal of the costs and technical challenges associated with the project, and coming at a point when the 2011 equipment plan was proving highly challenging to bring in on time and on budget (a key aim of the current Government was to balance the equipment programme), the decision was taken to revert back to the previous plan. The NAO report was intended to investigate this decision and identify how much was spent in total reverting back to previous plans.

In total the NAO estimates that some £74 million was spent on the project which must be written off – a fairly substantial expenditure to incur in just two years. But, it also highlights that due to the decision to cancel now, further losses of nearly £750 million were avoided which were likely to have been incurred had the decision been taken to go with the EMALS catapult system. Additionally it notes that entry to service would have been delayed by some three years – unacceptably long to CDS.

The report will no doubt be chewed over for some time to come by many on the internet and wider media. But Humphrey wanted to highlight a couple of factors in the report which struck him as being particularly interesting. Firstly, the report perhaps shows the immense difficulty associated with making changes to major defence projects these days. When procuring expensive equipment, much of which is often unproven and not fully derisked, there is a large financial burden attached to this. The reality is that if you want to have world leading capabilities, you need to be prepared to invest a lot of capital and have a large pool of funds available for the inevitable cost growth as things go wrong.

To the author the fact that the MOD actually cancelled the project is significant – making a ‘U-Turn’ to a ‘U-Turn’ is never easy and politically extremely difficult. One should be hopeful that although money was written off, the fact that the MOD felt able to recommend the abandonment early on shows that the days of ploughing on with projects, throwing ever greater amounts of money into it are perhaps drawing to a close. It would have been very easy for Ministers to reject the recommendation and take far less political heat for doing so than cancelling – do not underestimate how difficult taking this decision would have been.

The view from the Crowsnest

The next point of interest is the details in the report as to how long it will be before CVF is fully operational. On current plans QUEEN ELIZABETH will begin sea training within a couple of years, and start to embark helicopters and conduct limited marinisation trials of the JSF. But the report notes that we are still 10 years away from seeing a fully worked up carrier group capable of carrying not only the F35, but also a fully operational AEW capability in the form of the Crowsnest project. This project is the successor to the ASACS Sea King variant, which is being withdrawn in 2016. The project has repeatedly been deferred in recent years, and it now looks as if the MOD will not have a full capability until 2023 – this will mean that there will be a seven year gap when the RN hasn’t got any AEW capability while the system is worked up.

In practical terms this is not as terrifying as it may sound – to all intents and purposes the AEW capability has hardly been exercised at sea for many years now, with the ASACS fleet instead working primarily in OP HERRICK. Outside of some limited deployments for ELLAMY it is hard to recall when the RN last put the AEW capability to sea in a credible manner. The ASACS force is a phenomenal ISTAR platform and has genuinely superb capabilities, but it has very much become a purple asset used across defence and not just a carrier asset.

Additionally, if one considers that by 2023, the UK is unlikely to have significant numbers of F35 in service (open source publications are hinting at a squadron by 2016, which may mean further squadron by 2022) then one realises that CVF in its early years is going to have a sparse flight deck. The chances of needing an AEW capability is slim as for the first few years of its life, there simply wont be that many aircraft to fly off the deck needing it. So, on the one hand we should naturally be concerned that a very expensive aircraft carrier capability will not see its full potential, but on the other hand, the loss of AEW by itself is unlikely to make a major difference to the utilisation of CVF in the first few years.

What is perhaps more worrying is the hints in the report that the MOD has deferred expenditure on the associated MARS supply ships until after the next defence review. There is a requirement to replace the now very elderly ‘Fort’ class stores ships which support the carrier fleet, the oldest of which are now nearly 35 years old. Deferring the decision on ordering the replacement (likely to be a three hull class) means that the MOD will have to run on the very elderly fleet of RFAs well into the 2020s. It is all very well having a brand new aircraft carrier, but when you are reliant on a nearly 40 year old store ship to provide your dry supplies, you suddenly have a critical point of failure.

The problem is that RFAs seem to lack the high profile support needed to get through difficult planning rounds (one only has to look at the continuous deferment of the MARS programme to date). The CVF is a great capability but it needs to be fully supported, not just by aircraft and escort ships, but also by a proper fleet support chain. The question is surely how effective will CVF be if she has to rely on Fort Austin or Fort Victoria to provide the logistics to stay at sea?

Increasingly it is becoming clear that while the CVF offers amazing capability on paper, the reality is that until the mid 2020s it will not provide a truly modern capability able to generate carrier strike and operate with modern ships, escorts and aircraft. In the rush to get the carrier into the programme, one must wonder whether too little attention has been paid to prioritising the support elements, as funding was instead diverted to land based operations over the last decade. The author has a vision in his head of a lonely CVF with maybe six jets and a small number of helicopters in the early 2020s, escorted by a middle aged type 45 (youngest will be 10 years old), an elderly Type 23 (youngest will be 20 years old) and a geriatric stores ship (over 40 years old). Is this really the positive young and modern Royal Navy we so desperately want to be proud of?

RAF Woes
More broadly the report highlights the wider problems facing the UK. Firstly it notes that the RAF scrapped the DPOC requirement, meaning that there is going to be no replacement for the Tornado GR4 until the 2030s as the Typhoon OSD approaches. In practical terms this means the RAF is losing a very substantial chunk of capability within the next few years without replacement. The Tornado force is already beginning to be run down, and is likely to be out of service by 2018 without direct replacement. This means the RAF will have lost over 140 airframes, and a huge swathe of capability. In the same timeframe it will be operating a Typhoon force optimised for air defence, and which seemingly still hasn’t got a fully integrated ability to operate Storm Shadow or Brimstone (both immensely capable weapons) and which will have only a limited number of assets to cover both the air defence and expeditionary warfare roles. If as publicly reported the JSF is only beginning to enter service in very limited numbers, then you quickly realise just how limited RAF capability will be soon. In 2003 it operated four fast jet fleets totalling some 450 aircraft, but by 2018, barely 15 years later it will be down to the Typhoon fleet which is likely to only have some 100 aircraft operational at anyone time, and also maybe 16 JSF as a shared RN/RAF asset.

While it is fashionable in some internet forums to knock the RAF as an evil conspirator trying to destroy RN fixed wing aviation, one only has to look at the scale of how bad things are getting for the RAF to understand how limited the UKs air expeditionary capability is likely to be until the mid 2020s when the Typhoon and JSF force are hopefully at full strength. We are in for a period of at least 10 years when the RAF will be a far less capable force than before, with little hope of seeing capability reintroduced for at least further 10-15 years. One wonders whether the decision to scrap the DPOC programme will go down as one of the most rued decisions of future generations of RAF planners.

Finally one has to consider the financial challenges ahead. Humphrey has previously written about the problems of the current equipment programme funding, and the limited ability to absorb risk in the contingency fund. Reading the NAO report one notes that firstly the cost of absorbing the operation of a second carrier could be as high as £60 million per year, which would be extremely challenging to find in the current RN budget without commensurate cuts elsewhere. Secondly it notes that the costs of the CVF project is likely to rise as final costings are not yet known – given the limited ability of the EP to absorb cost growth, one has to worry about the 2015 defence review and whether sufficient funding really exists to bring the carriers into service without having to make further cuts to other programmes.

Conclusions

The NAO report makes for interesting and frankly worrying reading. While for years many have gone on about how capable the RN will be once CVF enters service, the fact remains that the UK is procuring a capability where cost is growing, and where the final bill for producing a fully worked up carrier group is likely to be extremely expensive. The fact that the MOD is having to defer and take risk elsewhere means that while in time the CVF will provide the UK with a truly world class ability, there is likely to be a prolonged period into the mid 2020s where one wonders whether the carrier strike ability is more Potemkin than we would perhaps like. ..