Memorandum from AMICUS
1. Amicus welcomes the opportunity to respond
to this consultation on "Delivering Frontline Capability
to the RAF".
1.1 Amicus is the UK's largest manufacturing,
technical and skilled persons' union. We have over 1.2 million
members in the private and public sectors. We have members who
work in the Ministry of Defence (MoD) and Government Departments
and over 1,000 members who work at Defence Aviation Repair Agency
(DARA) St Athan.
1.2 The best option for securing prompt and effective
delivery of frontline capability to the Royal Air Force (RAF)
would be to overturn the decision to roll forward Tornado GR4
maintenance and upgrade support to RAF Marham and, ultimately,
1.3 The decision to roll the work forward to
RAF Marham, originally made in September 2004 by the MoD, does
not make any operational or financial sense. Moreover, the investment
appraisal which informed this decision is too flawed to represent
a robust case.
1.4 The decision will ensure the closure of DARA
St Athan with the loss of 1,400 jobs and £80 million worth
of taxpayers' money which was spent on constructing the state
of the art aircraft hangar at the site.
1.5 The Welsh Assembly's Red Dragon project to
promote the region as a centre of aerospace excellence is also
now in jeopardy.
Facilities at Dara St Athan
2. On 1 April 1999, the Defence Aviation Repair
Agency (DARA) was created through the merger of the Royal Air
Force (RAF) Maintenance Group Defence Agency (MGDA) and the Naval
Aircraft Repair Organisation (NARO). Although still part of the
MoD, DARA was established as a trading fund exactly two years
later. DARA offers a variety of aircraft modification and maintenance
services including stripping, paint shop, replacing, repairing
and rebuilding whole aircraft for military and commercial organisations.
2.1 DARA Head Office and Fixed Wing Operations
are based at St Athan in the Vale of Glamorgan in Wales. DARA
also has three other sites around the UK in Hampshire (DARA Fleetlands),
Flintshire (DARA Electronics) and Tayside (DARA Components). In
April 2005 a new £80 million aircraft hangar, paid for with
tax payers' money, was opened at St Athan by Welsh First Minister
2.2 The new hangar has 45,000 square metres of
hangar accommodation, 20,000 square metres of support workshops
and office space and a roof span of 66 metres. It was designed
to accommodate up to 48 fast jet aircraft and includes state of
the art facilities which are the most advanced in Europe. The
facility also plays a key role in the Welsh Development Agency's
Red Dragon project which seeks to establish a world class aviation
centre in the area.
2.3 DARA has now completed three years of trading
and has consistently made a profit. In 2001-02 profits stood at
£9 million, 2002-03 £6 million and 2003-04 £6.5
year DARA met all its Key Targets for the third successive year
and customer concerns fell, overheads were reduced, real term
price reductions were made and an order intake target of £160
million was achieved. DARA has also proved that it can provide
a competitive alternative to private sector industry by winning
the deep level repair and maintenance contract for the RAF's Hawk
2.4 Despite the fantastic facilities at DARA
St Athan, its 1,400 highly skilled and dedicated workers face
an uncertain future as a result of a bizarre and dangerous decision
by the MoD to award contracts for servicing and repairing Harrier
and Tornado fighter jets to the RAF.
2.5 The Government has appointed an American
investment bank, Morgan Stanley, to advise on the future possible
sale of DARA as a whole and a possible sale of DARA St Athan.
We believe that the outcome of this advice will result in a proposal
of site closure for DARA St Athan by April 2007 in contradiction
to earlier predictions of a future to 2009.
End to End (E2E) Recommendation 40 Follow on Work
3. On 2 April 2004, the MoD disclosed the End
to End (E2E) Logistics Review study to trade unions. Management
Accountancy Services (Army) produced the study, entitled "End
to End Study Recommendation 40 Follow on Work," on behalf
of the MoD. The study contains details of the investment appraisal
on which the MoD based their decision to roll forward work to
3.1 The incremental cost methodology used to
justify the E2E was fundamentally flawed. Indeed, the authors
of the study conceded that the data had been collected and analysed
"within very short timeframes".
It further admitted that the majority of data including that from
Defence Estates was collected on a "`Rough Order of Magnitude'
This simply does not provide a sufficiently robust methodology
on which to base a decision that could ultimately threaten UK
3.2 The study further conceded that assumptions
had been made about RAF Crisis Manpower Requirement (CMR) which
took "no account of any possible future changes".
The study stated that factors such as different service culture,
the future of the Red Dragon project, the future of DARA St Athan
and operational considerations should be represented separately
from the financial implications. Yet these factors all represent
further financial risks and costs intimately linked with decisions
regarding future depth support. Furthermore, even where certain
costs have been included they have been grossly underestimated.
For example, the study estimates that any decision to close the
Fixed Wing Operating Unit (FOU) will result in "up to 800
but we now know that 1,400 jobs will be lost with the closure
of DARA St Athan.
3.3 The study further admits that it had "been
difficult to establish some costs, particularly infrastructure
costs and task hours".
The premium of 24%
which the study has applied to all new infrastructure requirements
is unlikely to be sufficient to bring infrastructure provisions
at RAF Marham up to the standards required to properly service
and support Tornado GR4 or Harrier.
3.4 In conclusion the study claimed that the
"Roll Forward and Hybrid options are extremely close in value
for money terms, Roll Forward offers better value for money by
just £0.561 million or less than 1% of incremental cost.
The Roll Back option is over £20 million more expensive than
any other option".
However the study is so inaccurate, including incomplete data
and flawed methodology, that these figures might as well have
been plucked from the air. Moreover assumptions were made that
the productivity and skill levels of RAF personnel would at least
match those available at DARA St Athan. Yet no evidence, such
as a skills audit, was put forward to back up this claim and the
financial risks of getting this wrong were not considered. The
costs of rolling forward work to RAF Marham are spiralling precisely
because RAF service personnel cannot work at the same pace or
to the same skill level as workers at DARA St Athan. The financial
costs of getting this wrong also include damage to multi million
Facilities at RAF Marham
4. RAF Marham does not have sufficient in depth
maintenance facilities to support the Tornado GR4 aircraft fleet
and certainly nothing that compares with DARA St Athan. For example,
RAF Marham does not have a paint shop with plastic media strip
facility. Given the local environmental conditions of the site
and proximity to productive agricultural land, it is highly unlikely
that planning permission would have been granted to build a new
one. Instead we understand that the MoD are looking to move an
old and obsolete plastic strip facility from DARA St Athan to
4.1 RAF personnel are not as well suited to the
work of servicing, modifying and repairing military aircraft as
the civilian workforce at DARA St Athan. Most RAF service personnel
did not join the service to work in civilian type factory conditions
and they have not had the same rigorous apprenticeship and specialist
training. As a result these service personnel cannot provide the
required level of expertise necessary to deep service repair aircraft
as technologically sophisticated as the Harrier and Tornado GR4.
Prior to the establishment of DARA St Athan, service personnel
were posted, to what was then MoD RAF St Athan, for two to four
years to gain some experience of deep servicing on various aircraft
type. If DARA St Athan is closed, the opportunity to benefit from
this type of training will also be lost.
4.2 The much exalted Pulse Line Management introduced
at RAF Marham is already under considerable pressure through supervisory
overstretch and the posting in of inexperienced personnel, and
likely to fail soon without additional service personnel or civilian
4.3 RAF Marham is experiencing recruitment difficulties
which are not just skills related. The site is comparatively isolated
and the nearest rail station is 12 miles away in Kings Lynn. Accommodation
facilities are also reported to be poor.
4.4 The decision to relocate support of Tornado
GR4 aircraft from DARA to RAF Marham did not take account of the
time and costs of retraining service personnel, properly refurbishing
the hangars at RAF Marham, providing a paint shop with complete
facilities, or paying agency workers should the service personnel
be recalled to the frontline. Neither did it take account of the
importance of the support workshop facilities at DARA St Athan
which provide an immediate response to demands for the manufacture
and modification of components.
4.5 The Government's response to the House of
Commons Defence Committee's Fourth Report of Session 2004-05 on
Future Capabilities, claims that the case for transferring Tornado
GR4 support to RAF Marham was based on a "comprehensive analysis
of the most cost-effective solution for maintaining the aircraft
including a full comparison of investment options for both Defence
Aviation Repair Agency (DARA) St Athan and RAF Marham".
Skills and facilities at RAF Marham clearly do not match those
at DARA St Athan or the MoD would not now need to be seeking partnered
support solutions to "provide a further layer of Quality
scrutiny of RAF technicians".
4.6 The recent consultation by the Defence Logistics
Organisation (DLO) on Tornado Future Support Combined Maintenance
and Up-Grade showed a significant increased in forecast man hours
for Tornado GR4 maintenance and upgrade. For the financial years
2005-06 and 2006-07 predicted man hours have been increased from
the current 400 million to 550-600 million. We believe that this
rise is being used to hide deficiencies in capability following
the transfer of work from DARA St Athan to RAF Marham.
RAF Cottesmore and the Harrier Contract
5. Before announcing the decision regarding the
servicing of the Tornado GR4 fleet, the MoD transferred the contract
to service Harrier aircraft to RAF Cottesmore. This resulted in
the loss of 550 jobs at DARA St Athan and possibly a further 350
in the future. Despite claims by the MoD to the contrary, the
RAF are already failing to carry out the Harrier work. True comparisons
of percentage delay times for RAF Cottesmore and DARA St Athan
reveal that in 2002 RAF Cottesmore incurred nearly 50% more delays
than DARA St Athan.
5.1 It is our understanding that civilian agency
staff have been used to overcome the skills deficit at RAF Cottesmore,
and now substantially outnumber service personnel, and a number
of aircraft have been sent to BAE Systems at Warton and back to
DARA St Athan. The Harrier jets are running out of flying hours
and the first aircraft will reach its limit in December of this
year. Unless the Harriers can be properly serviced and more quickly,
the fleet will be grounded. This may prove to be a pre-run of
the fate of the Tornado GR4 fleet.
5.2 So far at least one Harrier aircraft has
been seriously damaged during modification at RAF Cottesmore and
has not been flown since December 2002. We now believe that this
aircraft has been scrapped. The damage apparently occurred when
the main stress beam longeron was removed as part of the modification
which then requires the aircraft to be jigged and immobile. Unfortunately,
the aircraft was subsequently moved causing significant damage.
A further seven Harrier aircraft have also been sent to BAE Systems
at Warton for major repair after having been damaged.
5.3 Meanwhile the Minister of State, Ministry
of Defence (Mr Adam Ingram MP) claimed in a letter dated 7 June
2005 to the General Secretary of Amicus, Derek Simpson, that the
new way of working at RAF Cottesmore had cut the number of days
a Harrier spends in maintenance by 45 days. However, turn-around
times at DARA St Athan were around 100 days with measures in place
to decrease this to between 60 and 80 days. This was undertaken
largely with a team of six craftsperson's working single shifts
on a 37 hour week. The true turnaround time at RAF Cottesmore
was actually in the region of 200 days but this has been recently
reduced by around 45 days with aircraft teams of a similar size
working two shifts throughout the week.
5.4 It could therefore be argued that servicing
time has actually increased, not decreased, to around 155 days.
It would appear that the RAF are not recording expanded man-hours
accurately within this programme. In addition, the cost of servicing
the Harrier fleet at RAF Cottesmore has increased to £17
million whilst the cost for DARA for the same work was £0.5
million. Not exactly good value for the taxpayer.
Outsourcing to BAE Systems
6. Despite basing the case for the roll forward
of Tornado GR4 to RAF Marham on a requirement to protect RAF Core
Manpower Requirement (CMR) it is clear to us, given the inadequacies
of the poor facilities and lack of skilled workers available at
RAF Marham, that the majority of the work was always intended
to be contracted out to BAE Systems. We know that BAE Systems
have been contacting technical experts at DARA St Athan for advice
on maintaining and servicing the Tornado GR4. Furthermore BAE
Systems have been involved in a pilot project working on the Tornado
GR4 at RAF Marham and are intending to submit a bid later this
year to service the entire fleet. 
6.1 Adam Ingram's written ministerial statement
to the House of Commons on 25 May 2005 outlined plans for Tornado
Future Support (TFS) including GR4 Combined Maintenance and Upgrade
(CMU) which the Defence Logistics Organisation (DLO) are now consulting
Minister made it clear that the MoD is seeking a partnered solution
in the private sector and that contracts for TFS would be awarded
to BAE Systems and Rolls-Royce Defence Aerospace. 
6.2 The Government decision to seek a private
sector solution could potentially lead to an operational disaster.
The House of Commons Defence Committee has previously commentated
on the strategic importance of safeguarding the valuable work
that DARA carries out, and has already identified the potential
consequences of a private sector failure. In 2005 it stated: "We
find it of real concern that if problems are experienced at RAF
Marham, MoD may be dependent upon the original manufacturer of
the aircraft to undertake repairs. One of the reasons why DARA
was created in the first place was to provide `assured access
to repair capabilities and a capacity for surge workloads in time
of crisis'. It
is not apparent how the proposed arrangements at RAF Marham will
meet this requirement. "
6.3 Rolling forward the work to the RAF
effectively enables the MoD and the private sector to avoid their
obligations to workers at DARA St Athan under TUPE legislation.
7. A large part of DARA's success story can be
attributed to its highly skilled workforce. Many have been trained
through in-house apprenticeship schemes at the onsite training
facility, which has been operating over a period of 36 years,
or served an initial apprenticeship in the RAF and undergone years
of further specialist training. DARA continues to build on these
skills with corporate wide programmes and improvement initiatives.
If DARA St Athan is closed the apprenticeship training facility
will also close with a loss of between 20 and 40 youth or adult
trainees per year. The skills base will be eroded quickly, not
least because skilled aviation experts, representing thousands
of pounds of investment training, are much sought after throughout
the avionics industry in Europe.
7.1 Many of DARA's ex-workers have already
been snapped up by the aerospace industry based around Toulouse
in the South of France. Should the Government find itself in the
desperate situation of having to reopen DARA to cope with failure
in the private sector, the skilled workforce will have long since
departed and it will take years of investment and training to
rebuild a new workforce to the same level.
7.2 During the last Gulf War conflict, DARA St
Athan was able to meet additional frontline operational requirements
at short notice by prioritising the Tornado GR4 fleet. The workforce
demonstrated a massive show of effort and commitment which saw
DARA St Athan working 24 hours a day, seven days a week. It is
highly unlikely that a private sector company would be prepared
or able to rise to such a challengeand certainly not without
a huge financial premium.
7.3 The continuing turmoil in international affairs
during the last 15 years has seen the UK involved in military
action in the Gulf, Afghanistan, the Balkans and peace keeping
initiatives in Africa. Any significant delays or problems with
maintenance turn arounds involving the Tornado GR4 fleet could
potentially have a devastating impact on frontline capability.
7.4 Many private sector contracts have resulted
in dramatic headline grabbing equipment failures, delays and cost
over-runs. Ultimately, private sector companies are intent on
making money for their shareholders and operational considerations
will never be their top priority.
7.5 It would be a great tragedy, and a huge embarrassment
to the Government, if any military aircraft, worth millions of
pounds, were lost because of substandard work. Furthermore the
political consequences of a failure of frontline operations because
either RAF Marham, or the private sector, failed to properly and
timely service the Tornado GR4 fleet is incalculable.
Financial Costs and Risks Associated with the
8. DARA has successfully met its objective of
providing an in house competitive alternative to the private sector
industry. As a result, when tendering contracts for servicing,
modifying and repairing military aircraft, the Government can
use DARA as a benchmark against which to compare private sector
bids. If DARA St Athan is forced to close, private sector firms
will be able to charge whatever they like and the Government will
be forced to pay. Whilst DARA has been established as a trading
fund, it is still part of the MoD and UK taxpayers are the shareholders.
Moreover, risk can never be fully transferred to the private sector
because the cost of failure is so great.
8.1 The MoD's original investment appraisal used
to justify the decision to roll forward the Tornado work to RAF
Marham, based on a cost comparator of RAF Marham and DARA St Athan,
did not take into consideration the cost of the £80 million
loss to the taxpayer of closing a state of the art aircraft hangar,
the training investment of the current workers at DARA St Athan,
the full cost of the redundancy package for those workers, the
economic and social impact to the local ex-mining community or
the costs associated with seeking a private sector partner to
carry out the work.
8.2 Whilst BAE Systems are keen to take over
the work for servicing and maintaining the Tornado GR4 they do
not have the comparable skills or facilities available at DARA
St Athan. If the private sector fails to sufficiently maintain
the Tornado GR4 fleet, the RAF will be forced to extend flying
times for aircraft. Harrier flying time between servicing intervals
has been already extended by 44%, and 37.5% on Tornado GR4. This
will put crews and aircraft, worth millions of pounds, at catastrophic
risk and may interfere with frontline operations.
8.3 There is already a history of private sector
failures involved in servicing military aircraft. In 1994 one
third of Hercules transport aircraft were grounded after 11 were
damaged during modification. The work, which involved installing
infrared missile defence systems, was being carried out by AirWorks,
a private sector company. Damage to the aircraft included cutting
away load-bearing stringers, omitting fasteners, deviating from
drawings and drilling holes in the air frames in the wrong places.
The company had been awarded the contract despite reportedly causing
£100 million worth of damage to 18 Tornado aircraft during
routine servicing just one year earlier.
8.4 Private sector contractors, and BAE Systems
in particular, have already been involved in costs over runs and
delays with other key defence contracts. Two years ago the National
Audit Office (NAO) produced the Ministry of Defence Major Projects
Report 2003 which identified a £3.1 billion overspend over
the previous year. A significant proportion of the cost over-runs
and delays, 144 months in total, were the result of BAE Systems
contracts, despite the introduction of the MoD's Smart Acquisition
2004 the overspend was £1.7 billion and delays were 62 months.
former BAE Chief Executive, Sir Raymond Lygo also reportedly revealed
to the BBC that BAE System routinely underestimated project costs
in order to win contracts from the MoD only to escalate the costs
at a later stage, knowing that it would cost the MoD too much
to cancel. 
9. We would like to see the decision to
roll forward the work for servicing and maintaining the Tornado
GR4 fleet to RAF Marham and/or private sector contractors reversed.
Without this work, and the loss of other work including Harrier,
DARA St Athan now faces closure which is bad news for its professional
and highly skilled workforce and the Welsh Assembly's Red Dragon
project. This is despite the fact that DARA has more than proved
itself as a successful trading fund capable of servicing and maintaining
the most sophisticated military aircraft to an excellent standard.
Contracting this work to the private sector represents further
costs, not savings, and presents a significant financial risk.
Moreover, whilst DARA St Athan has a proven track record of delivering
frontline support at critical times the capability of private
sector companies to rise to the same challenge is unproven. This
presents an unacceptable risk to the RAF's frontline military
1 DARA Annual Report and Accounts 2003-04. Back
"End to End Study Recommendation 40 Follow on Work"
prepared by Management Accountancy Services (Army) (2 April 2004)
paragraph 12. Back
Ibid paragraph 13. Back
Ibid paragraph 14. Back
Ibid paragraph 32. Back
Ibid paragraph 27. Back
Ibid paragraph 28. Back
Ibid paragraph 44. Back
"Future Capabilities: Government Response to The House of
Commons Defence Committee's fourth Report of Session 2004-05"
Crown Copyright (July 2005) page 16 Government response to Recommendation
Ibid page 17 Government response to Recommendation 37. Back
"RAF Contract Stripped from DARA to go `In-House' Attracts
BAE Bid" Kirsty Buchanan, Western Mail (29 June 2005). Back
"Tornado Joint Integrated Project Team Tornado Future Support
Trades Union Continued Involvement Plan Version 2 Amended 23 August
2005" Defence Logistics Organisation (DLO), Annex B dated
1 September 2005. Back
"Tornado Future Support Strategy" The Minister of State,
Ministry of Defence (Mr Adam Ingram), Hansard, House of
Commons Debates, Written Ministerial Statements, Session 2005-06,
25 May 2005. Back
Fifth Special Report, Session 2000-01, HC 514, paras 4, 12, 14. Back
House of Commons Defence Committee Future Capabilities Fourth
Report Volume 1 p181. (March 2005). Back
"Ministry of Defence Major Projects Report 2003" National
Audit Office (NAO) Report by the Comptroller and Auditor General
HC 195 Session 2003-2004: 23 January 2004. Back
"Ministry of Defence Major Projects Report 2004" National
Audit Office (NAO) Report by the Comptroller and Auditor General
HC 1159-1 Session 2003-2004: 10 November 2004. Back
"MoD Overspend: Who's to Blame?" BBC News 23 January
2004 http://news.bbc.co.uk/2/hi/business/3422239.stm Back