Meteorological Office (Hansard, 8 March 2000)

§ Dr. Moonie

This is a matter for the Chief Executive of the Meteorological Office. I have asked the Chief Executive to write to the right hon. Member.

Letter from Peter Ewins to Mr. Menzies Campbell, dated 6 March 2000: I am replying to your question to the Secretary of State for Defence about the Met. Office's performance against its key performance targets in 1998–99. This matter falls within my area of responsibility as Chief Executive of The Met. Office. Our targets in 1998–99, as announced in Hansard on 24 April 1998 (Col 714), were as follows:

Key Target 1 To achieve a value of at least 111.1 index points on 31 March 1999 from a baseline of 100.0 on 31 March 1995, for the global Numerical Weather Prediction (NWP) index, which measures the overall forecasting skill of the global NWP model;

Key Target 2 To achieve an index level of 104.0 by 31 March 2000 from a baseline of 400.0 at 31 March 1996, and to achieve an increase of at least 2.0 index points during 1998–99 for the UK NWP partial index, which measures the forecasting skill of the NWP model for the UK;

699W

Key Target 3 To increase the index of service quality to at least 104.8 on 31 March 1999 from a baseline of 100.0 for 1996–97, in line with agreed customer requirements. The index covers representative services and products across defence civil aviation, public and business users;

Key Target 4 To improve efficiency from a baseline of 100.0 on 31 March 1997 to at least 108.0 on 31 March 1999 as measured by the agreed Efficiency Index;

Key Target 5 To achieve an overall return on capital employed (ROCE) of at least 7% taken year on year. For the financial years 1997–98 and 1998–99 to achieve an overall ROCE of at least 11.6% averaged over the two years;

Key Target 6 To make a contribution from commercial activities in 1998–99 of not less than £1.1 million, on the agreed basis of measurement. Our performance against these targets was published in our Annual Report and Accounts for 1999–99, copies of which are available in the library of the House, and is summarised in the following table:

Key performance indicator	Target	Outturn	Achieved
UK NWP Index	¹104.2	106.3	Yes
Global NWP Index	111.1	109.9	No
Service Quality Index	104.8	114.5	Yes
Efficiency Index	108.0	111.5	Yes
ROCE²	7%	³10%	Yes
Commercial Contribution	£l.lm	£1.8m	Yes
¹ The Index score at the end of 1997–98 was 102.2.
² The basis of calculating ROCE changed during 1998–99 as a result of the introduction of FRS12, a financial reporting standard that affected the accounting treatment of provisions. ROCE performance in the table is shown pre-FRS12, being the basis upon which the 1998–99 target was set. The post FRS12 outturn was 6.3%.
³ The average ROCE for 1997–97 and 1998–99 was13.8% pre-FRS12 (13.5% post-FRS12).

As you will see, we exceeded our financial performance targets by a significant margin and substantially improved our service quality and efficiency. We also improved our UK Numerical Weather Prediction (NWP) Index, which is a measure of our underlying forecasting accuracy for the UK, by a significant margin. However, we fell just short of the Global NWP target. Problems with the model's handling of the South Pole region were identifiedand

Percentage
Key target		Target	Achievement
1	To provide operational imagery intelligence (IMINT) support as follows:
	Priority 1 tasks to be completed within 24 hours of receipt of appropriate imagery	98	100
	Priority 2 tasks within 48 hours	92	100
	Priority 3 tasks within 7 days	88	91
2	To provide detached Service personnel as required, up to a total of 22 at any one time		Achieved
3	To complete Strategic, non-operational intelligence requirements and other tasks:
	Priority 1 tasks to be completed within 24 hours of receipt of appropriate imagery	92	95
	Priority 2 tasks within 48 hours	88	95
	Priority 3 tasks within 7 days	80	83
	Priority 4 tasks within 6 weeks	75	89
4	To revise the methodology of measuring the degree of customer satisfaction with the service provided		Achieved
5	To achieve an improvement of efficiency	2.5	3.2
6	To conduct evaluations of imagery reconnaissance systems for Government departments within agreed times and allocated resources		Achieved

700W and rectified, and benefits of a higher resolution model introduced in January 1998 began to feed through towards the end of 1998–99. As a result, the target score was achieved less than 2 months into 1999–2000. Moreover, comparison with the performance for global models run by other Meteorological services shows that, despite the failure to achieve our own challenging performance target, we have maintained our position as a world-class weather forecasting centre. To improve Global NWP performance in 1999–2000, a number of further enhancements to the model have been introduced, and I am pleased to say that we are currently on course to meet both of our NWP targets this year. We are also on track to deliver greater in-year cost efficiency, part of which has been anticipated in agreed prices for 1999/2000 with the remainder to be passed on to our customers through further price reductions in future years. We have cut the planned level of ROCE substantially, in line with our strategy of investment for growth, which will enable us, inter-alia, to improve service quality (especially forecasting accuracy and responsiveness to customer needs) and, largely through increased automation, generate further down-stream efficiency improvements. We are, however, unlikely to meet our target for commercial contribution, although our commercial business remains profitable. We have already introduced changes to our commercial division, including the appointment of a new Managing Director, which we are confidence will increase both revenue and profitability in 2000–01.