§ 3.7 p.m.
§ LORD LATHAMMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether they are aware of the Report of the Comptroller and Auditor General upon Class VI 9 of the Civil Appropriation Accounts for 1960–61 (House of Commons Paper No. 40, pp. viii-x) as to the varying estimates 584 of the rising cost of the development of the Blue Steel weapon; and, if so, what steps they have taken, or propose to take, in regard to the alarming progressive increases in such estimates; and, further, what is the present position as to the completion of the weapon.]
§ THE FIRST LORD OF THE ADMIRALTY (LORD CARRINGTON)Yes, my Lords. Blue Steel is the first of a new type of very advanced weapons to be developed in this country. It flies at high supersonic speed and, after release from a V-bomber, automatically navigates itself to its pre-arranged target carrying a warhead in the megaton range. In entirely novel and advanced projects such as this it is very difficult indeed to predict at the outset either the course or the outcome of the development work; the troubles in cost estimating stem very largely from this. A close watch has been kept on the project since it was begun in 1955, and the increases in estimated cost have been balanced against the need for the weapon. Blue Steel is due to be put into service this year.
On the general question of control of development projects, I would draw the noble Lord's attention to the Report, published by Her Majesty's Stationery Office on December 19, 1961, of the Committee set up in May, 1958, by my noble friend the Lord President of the Council. The recommendations of this Report have been generally accepted and, indeed, practice already conforms broadly to what is advocated in it. Departments are, however, still reviewing their procedures in the hope that the technical and financial control of development projects can be still further improved.
§ LORD LATHAMMy Lords, I am sure the noble Lord will agree with me that the statement he has just made is a pretty inadequate justification for what is a lamentable situation. Here was a project authorised to be proceeded with on the basis of an estimate of £12½ million which increased to £20¼ million; and, as if that were not enough, it increased to £35 million, and from £35 million to £60 million. That is a pretty good misjudgment of estimates. It is geometric progression, I should think. I am glad 585 to know that certain views of the surveying and controlling interdepartmental committee—
§ SEVERAL NOBLE LORDS: Order, order!
§ LORD LATHAMThe noble Lord will perhaps indicate how much has been paid out to the contractors in respect of Blue Steel.
§ LORD CARRINGTONMy Lords, it is not the usual practice to make public the sums of money which have been paid to the contractor, and I am afraid I cannot do so.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, are the Government aware of the very wide expressions of feeling which are being passed on this matter, and especially are they aware that rumours are about that it is not yet certain that this weapon is going to be effective Is that so? Is the weapon going to be still capable of being transported against the enemy? Have they sufficient evidence yet of what the size, weight and nature of the weapon will be in relation to the existing capability of transport?
§ LORD CARRINGTONYes, my Lords. This weapon, as I said in my original Answer, comes into service this year and the Government and the Royal Air Force are quite satisfied that it will do that which we want it to do and that it will have several years of very useful life in the Royal Air Force.
§ LORD STONHAMMy Lords, is the noble Lord aware that it is not necessarily the final cost which causes so much concern, but the fact that the initial estimate is so much at variance with the final cost? Is he aware of the number of occasions on which Public Accounts Committee projects, which initially were thought to cost £1 million or £3 million, eventually ended up costing about £100 million? Is it the case that his Department is afraid that, if there is a more substantial initial estimate, the project will not get away at all? And if that is not the case, can the noble Lord not undertake to see that an estimate is made which is more in keeping with the probable cost of the thing, having regard to all the difficulties which he has mentioned?
§ LORD CARRINGTONNo, my Lords; it is not, of course, for the first reason mentioned by the noble Lord. Nobody wants these estimates to go up. This is a cause of great concern to the Government, as well as to everybody else. But in my first Answer I explained that these are very new and advanced techniques and it is very difficult to get a correct estimation when the project is in so early a stage. This is one of the reasons why my noble friend set up the Committee; and the report of the Committee will, I hope, do something to bring the problem, which is of as much concern to the Government as to noble Lords opposite, under control.
§ LORD LATHAMMy Lords, is the noble Lord not aware that in the Auditor General's Report it is stated that the difficulty which arose in regard to increased estimates was partially, if not wholly, due to the ineffective and inefficient system of control which existed?
§ LORD CARRINGTONMy Lords, I do not think that is entirely so. If the noble Lord reads the Report of the Auditor General I do not think he will find that is the impression left. But I think the Public Accounts Committee will be going into this, and I feel it would he much better if we did not say any more about this particular case until they have reported.
§ LORD LATHAMMy Lords, in support of what I said, is the noble Lord not aware that in the Report of the Auditor General there is an indication that at one stage he considered whether there should be a penalty in regard to the inefficient control of the expenditure?
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, arising out of that, may I ask the noble Viscount the Lord President of the Council whether it is going to be the case that these particular progressive types of production are always going to be done through the one firm? Is it possible for the experts to prepare such a basis of their requirements that you can get more than one tender for the business?
§ THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM)My Lords, I do not know enough about the defence side of this, and if the noble Viscount wants a careful answer I am 587 afraid he must put down a Question. Of course, this is discussed in the defence chapter of the Zuckerman Committee's Report. In matters of research and development generally—I am speaking not of defence matters, but generally—it is very often inevitable, in the development of a new project, that the relationship of the Government has to be with a particular firm. I could elaborate that if I were given notice. But with a really new technological project it is very often the case that a single firm has to be involved, although the Government, like everybody else, are aware of the advantages of competitive tender where it is applicable.