Select Committee on Defence Minutes of Evidence

Examination of Witnesses (Questions 1-19)


28 NOVEMBER 2006

  Q1 Chairman: Welcome. This is an evidence session with Dstl, and so I should be grateful if you would just introduce your team. Tell us who you are and what role you take in Dstl.

  Dr Saunders: I am Frances Saunders, I am the Acting Chief Executive in Dstl. I took over in May of this year when Martin Earwicker left the position of Chief Executive. On my right is Peter Starkey, who is our Future Business Director and is looking after the development of the kinds of products and services that we will provide to our customers into the future, and Mark Hone, who is the Finance Director of Dstl.

  Q2  Chairman: You are the Acting Chief Executive?

  Dr Saunders: That is correct.

  Q3  Chairman: Why is that exactly?

  Dr Saunders: When Martin Earwicker left they appointed me on an interim position whilst the MoD ran a competition to find a new Chief Executive.

  Q4  Chairman: Is that competition still running?

  Dr Saunders: I believe it is. I think you should probably ask my colleagues in MoD where they have got to in that competition.

  Q5  Chairman: Your report and accounts tell us a bit about your work, but how is your work different from what QinetiQ does and what universities do?

  Dr Saunders: That is a very good question. You have to go back to look at the reason why Dstl was created at the split up of DERA into the QinetiQ organisation, which was destined to be working in the private sector and to be privatised, and the Dstl organisation which was retained in government to do those things that are best done in government, and to do those things, particularly, of a sensitive nature or where we need to work very closely with industry and need to deal with proprietary information in areas such as support to operations or counter-terrorism, where you can understand the sensitivities, where it would not be appropriate for some of that work to be done in the private sector. As regards the universities, we tend to do rather more applied research than seeking out new knowledge for its own sake. We do not tend to do academic research but we do work very closely with the universities so that they have a better understanding of what MoD requirements from science and technology might be in the future. Then we can work with them to pull through their ideas into our more applied research and then into the equipments and the thinking that goes on within the rest of the department.

  Q6  Chairman: Your report says that you employ about 3,400 people. Is that right?

  Dr Saunders: That is about right, yes.

  Q7  Chairman: Could you say how those people are broken down into each of the broad areas of the work that Dstl does? Roughly.

  Dr Saunders: Roughly. If you think about the three sorts of work we tend to do, some is associated with supporting systems work—the higher level concept of development, support to policy development and support to the early stages of procurement—and probably about a third of our people are involved in that kind of work. The second third are looking more at the technology, so actually developing technology solutions that will be deployed in future equipments, particularly supporting things like urgent operational requirements (UORs) in areas that support operations in Iraq and Afghanistan. The final third is doing rather longer-term research of a strategic nature which uses the deeper end of Dstl's research base into areas such as biomedical counter measures, detection of chemical agents in the field, biological agents and explosives, and some of that longer-term research increasingly including some of the social science issues that need to be dealt with and brought into our thinking, as the nature of warfare is changing.

  Q8  Mr Holloway: To what extent are you involved in the Litvinenko investigation? Are you involved in trying to trace the source of this material?

  Dr Saunders: That is something that has obviously happened very recently. We have been asked by the Health Protection Agency to support them in providing some of our radiological detection capability to support them in looking at sites that they are dealing with in London at the moment. That is the extent of our engagement. They `phoned us on Sunday and said could we deploy our team. We have a team that we would normally use if there was an accident in a military establishment, and we can use that to support the Health Protection Agency.

  Q9  Chairman: Thank you. Do you fund any research that is done by third parties?

  Dr Saunders: Yes, we do. We have what we call an extramural research programme budget, which is a relatively small amount of money and has been going down since Dstl was formed. This year about £9 million of that extramural budget goes into the universities, so we fund work in universities, both in our own regard and also as an agent of MoD, in something called the joint grant scheme, which is a joint Research Council/MoD scheme for funding work in universities. We also fund work in industry in areas where we want to combine capability to integrate into some of the programmes we are asked to do by MoD, and that includes some of the support to operational requirements where we bring in small companies to develop prototypes of equipment, and so on.

  Q10  Chairman: Why do you do that? Why is it necessary to have you as a barrier between the MoD and the industry that does the work?

  Dr Saunders: It is interesting you use the word "barrier"; we actually only do that when we add value. So it is particularly where we need to explain the detail of the technical work to suppliers so that we can integrate it into some of the more sensitive areas of our programme. We need to have that technical expertise in order to be able to specify what is required and we understand the depth of that information. When it comes to the university linkages, again, it is this issue of integration; as more and more of the work in the research programme is competed and different suppliers provide output, there is a need to make sure that the MoD has a good understanding of the overall picture of work that has been done in a particular field in the UK. One of the reasons Dstl was kept in government was to provide that integration role. So we tend, really, only to put work out ourselves rather than it going directly from MoD in areas where we really believe, and MoD agree, that we can add value through that exercise.

  Q11  Chairman: We have just received Dstl's framework document. Are there any major changes in that over the previous one? If so, how will they affect you?

  Dr Saunders: There are two main things I would point to. One is, I think, a rather clearer statement of the top level objectives for Dstl, and I was particularly pleased to see in there an objective about maintaining and sustaining capability to support MoD in the future. Yes, we are there to do the things that need to be done right now, that need to be done in government, but there is also a recognition that you can only do that if you have got a very strong research base or S&T base and good people who have been active for a period of time. So this idea of sustaining capabilities and making it a specific objective will, I think, be very helpful to us. The other change, of course, is the governance arrangement. This recognises that over the last year or so there has been a new non-executive-dominated board put in place overseeing Dstl to discharge the ownership function on behalf of MoD as owner. So it looks at what is the role of that board vis-a"-vis the role of the executive team and what are the levels of delegation and corporate governance arrangements that flow with that.

  Q12  Willie Rennie: The Defence Technology Strategy. How is that going to impact on your work?

  Dr Saunders: I think it is going to impact in quite a great way. If you go through the DTS document you will find Dstl's name liberally sprinkled in there—I think we counted 77 times. So the message from this since our aim has always been to be indispensable for MoD and to be part of them managing the science and technology base in the UK and helping them do that. I think the Defence Technology Strategy and the kind of challenges it puts out to Dstl to do that is extremely good news, and it is a recognition that we are part of the family. In terms of the detail of how it is going to change things, you will see an emphasis in there about our relationship with universities. They see Dstl very much as a node in the network of the academic research in the UK and being able to bring into defence some of those advances in technology that are more widely applicable, and so on. So a very clear remit to work more closely with the universities and support MoD. Obviously, there is also mention in there of the need to look at the balance between the work the Dstl does; how much research we do vis-a"-vis how much advice work—the balance we talked about right at the start, about the third a third: is that right? Should it be different? Should it be different in different areas? Of course, when you start to then go into (section B) the different technology areas, the different market segments, then I think you will see a change over time of where Dstl has expertise as the implications of that strategy work their way through. We will be working with our colleagues in MoD over the next few months to articulate what does this mean in specifics for Dstl—i.e. are there areas of technology that actually we need to strengthen because they are going to be even more important to have an in-government capability? Are there areas of technology where actually we are going to allow the market to drive the technology forward and, therefore, perhaps we should disinvest? So there will be quite a lot of debate, I expect, over the next few months with our colleagues in MoD about what the actual implementation plan for this strategy means.

  Q13  Willie Rennie: What do you think is going to be the biggest challenge within the strategy for yourselves?

  Dr Saunders: The biggest challenge will always be this issue of evolving and adapting in areas where we need to strengthen our capability, to make sure we are able to do that and that we have the programmes to do that, because you do not develop technical and scientific capability just by sort of sitting in a lab in isolation; you have got to have the right programmes of work. So making sure that the programmes follow where the requirements are going to be.

  Q14  Willie Rennie: So there is no one specific area that you think is the biggest?

  Dr Saunders: No, there is no one specific area that I think is the biggest challenge. If you look in terms of what work we are funding, one of the areas where we do need to, I think, strengthen our capability is in the whole area of information management, which is an area where, when we were set up as Dstl, we had a relatively low proportion of the capability that had originally been in DERA, and we have gradually been strengthening that over the last five years. I think that whole area of the use of information technology and ISTAR on the battlefield is an area where the MoD does need some good quality in-house support, and that is what we intend to be providing.

  Q15  Mr Hancock: In the Defence Technology Strategy the Government suggested that their national target of R&D investment would be 2.5% of GDP by 2014.  Do you confirm that that figure refers to all R&D, not just to defence, and what is your interpretation of where the Government's share of that spend is going to be—what the Government themselves are going to take on? Has it been indicated to you what you can expect as a share of that?

  Dr Saunders: From a policy point of view I really do not think I can add anything, but my colleagues may be better placed to talk about what the overall policy means. In terms of what is the intention for Dstl, our forward projections of our income are relatively flat, so we are seeing possibly a rise to cover inflation but no more than that. So at the moment we are not expecting to see any big increase in investment in Dstl.

  Q16  Mr Hancock: Do you know what the Government's target is for Research & Development specifically for defence?

  Dr Saunders: I do not know that.

  Q17  Mr Hancock: So you are not party—

  Dr Saunders: I am not party to those policy discussions.

  Q18  Mr Hancock: That is a decision that has now been made. It is not how the policy was made; it is now out to be implemented. You have not been given any indication over the next seven years what you would expect to have?

  Dr Saunders: Not specifically. We currently receive around 37% of the defence research budget and we are expecting to continue to receive roughly about the same proportion into the future. That is the best information that we have.

  Q19  Chairman: Mr Starkey, do you want to join in?

  Mr Starkey: All I would add is to reinforce that we only do those things which need to be done in government, and that in itself determines the volume of our work. At the moment, there is an arrangement whereby, yes, we receive a particular proportion of most of the research programme—37% of that—but that depends on our role. We do not go up and down with the general volume; we look just at our role.

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