18/09/2010

St Athan Defence Training College, Briefing

St Athan Defence Training College, Briefing[1]

In January 2007, Westminster announced a new military training college for the Vale of Glamorgan at the St Athan base. Welsh politicians celebrated it as one of the best things to ever happen to Wales and its economy – claimed to ‘create’ thousands of jobs, which has proven false.

The project is not just integration of training for British forces, but would commit Wales and the UK for 30 years to a consortium in which international weapons suppliers are prominent partners[1]. The Metrix partnership led by multinational companies, includes some of the world’s most powerful arms companies. Both Raytheon and Qinetiq are shunned by ethical investors[2].  The third lead partner is Sodexo, controversial in catering and managing prisons[3].


A raw deal for the taxpayer as trainee numbers shrink and costs spiral upwards
When announced in January 2007, £14 billion was given as the price of both training Package-1 and Package-2[4].  Then Package 2 (one third of the total) was cut out and the price reduced to £11 billion (February 2008).  Though the MOD agreed to reducing trainee contact-hours by 25%, the cost crept up to £12 billion (10 Sept. 2008). Then £13 billion was cited at the January 2010 Public Inquiry, though trainee places had shrunk to 2700 (from 4000-6000). Next, in July 2010, the Minister stated £14 billion, with the MoD giving as excuse that they can’t control inflation[5].  Yet Metrix claim savings compared with the non-PFI alternative (which cost £11.4bn in 2008).

Pressed in the Commons, the Minister[6] stated the increase in costs since Sept. 2008 results from
“the substantial increased cost of finance, increased provision for risk, and the changed assumption for inflation throughout the life of the project”.  
The first is due to the credit crunch, but increases in the ‘risk’ premium and in assumed future inflation indicate the MoD allowing financial drift to keep the PFI on the road.  Companies chosen for PFI-funded contracts are supposed to cover initial costs and bear risks in project delivery[7].  Land Securities Trillion were originally the lead partner for project management, but they withdrew in December 2008 after investing £20 million.  Sodexo were promoted to lead partner in February 2009 without competitive bidding, and since then the MoD has awarded special funding.  This included an extra £32M risk reduction[8], £31M to Metrix for design of integrated training (2009) and £29M for Early Works (Jan.2010).  In addition millions (nearly £8M) have gone to legal and financial consultants, as well as planning etc. costs that would normally be borne by the PFI company.
 
Paid to Company
 2008/9
 2009/10
Comments
Price Waterhouse Coopers
£1,265,206
£1,166,054
Audit + financial advisors
Simmons & Simmons
£765,073
£2,342,872
Legal services
Partnerships UK
£619, 549
£666,067
Promote PFI projects
Entec
£60,926
0
Planning consultants
GVA Grimley
£15,000
0
Property consultants
White Young Green
£409,340
0
Planning consultants
Willis
0
£8,970
Financial advice
DSTL
£32,150
0
MoD Defence services
Hewitt Associates
£6,271
£7,254
Human resources consulting
SDS
£100,000
0
Security services
Legion Group
£645
0
Security  [in administration]
Symbia
0
£79,063
Information Technology
Defence Estates
0
£364,999
Various contractors
TOTAL
£3,274,160.00
£4,635,279.00


Table: MoD figures for direct expenditure on the Metrix project (no breakdown available in earlier years). While the planning consultants are doing a set piece of survey work and preparing documents, the biggest sums go for banking/financial advice from companies with a strong interest in continuing the PFI deal so they continue to get a percentage. Other expenditure  by WAG includes the Camargue PR firm engaged to run the ‘public consultation’   and £12.5M (+contingency) for advance works[9], which MoD would refund if they don’t proceed.  Simmons & Simmons advised the MoD on the much criticised 2002 sale of Qinetiq at knockdown price.


Why didn’t the Assembly and Welsh politicians reject Metrix?
Assembly politicians claimed it was a Westminster decision and so outside their jurisdiction.  Yet the WDA seconded two officers to Metrix, and since their absorption in the Welsh Assembly Government, a team of civil servants have worked on it. Some local politicians, notably Chris Bryant MP and former MP John Smith talk of ‘jobs’ and multi-billion investment.  John Smith and local media persisted in calling the total PFI cost “investment” and accused critics of endangering ‘Welsh’ jobs. The actual investment of £830million includes housing[10] and is similar to the St Davids-2 retail development in Cardiff. 

False claims about jobs for Wales
At the Welsh Affairs Committee in July 2006, local AM and Welsh Minister, Jane Hutt spoke of “the creation of 5500 permanent jobs”, while Chris Bryant upped it to “maybe 6000”.  The MoD baseline numbers[11] in DTR1 are 2400 military staff, 1600 civilian staff, 6000 defence trainees (standing population) plus contractor personnel in catering, security etc.
·   At the Public Inquiry (Jan. 2010), Metrix gave 3000 total, of which 700 are military staff and 500 are non-project staff
·   The 1800 civilian jobs include 1200 managers, contractor personnel and trainer staff transferring to Metrix[12]. The jobs available for local job seekers are in cleaning, maintenance, transport and catering.
·   The Inquiry was told military trainee places have reduced from the 6000 to 2700, a figure that could be cut to about 2000 by the Defence Review.
·   The 2400 transfers to St Athan will bring in many job-seeking spouses and family members[13], estimated as 1200-1900.  These job-seekers far outnumber the few hundred (up-to 600) jobs provided.

What of the Aerospace Business Park component of the St Athan development?
Over £100 million was spent on the former Red Dragon project at St Athan to provide MoD aircraft servicing and refits, before the MoD withdrew.  WAG had argued this would be the heart of an aerospace ‘centre of excellence’.  No mention was made of the weapons development though WAG’s publicity promised high security conditions.  Despite failing to attract significant aerospace work, WAG resolved to carry on when Red Dragon collapsed.  The Wales Audit Office blamed a lack of co-operation between the MoD and Welsh Assembly Government for the Red Dragon failure. Whatever the reasons, the advanced aerospace business park, promoted as “capable of generating several thousand skilled and high paid jobs in the long term” has since dwindled to almost nothing. The DARA project based there has shed 2,000 skilled engineering jobs, and the remaining 340 are soon to end.  WAG brushes aside this history of failure and their adoption in 2009 of low carbon economic policy, with their St Athan project team under Nicola Goodwin-Bailey still banking on expanding aerospace investment.

How would the development affect perceptions, within and outside Wales?
Welsh politicians have been able to keep their distance from the Iraq invasion, while proudly associating with starting the Greenham women movement in south Wales. There’s a strong stand of peace-making and anti-militarism in Welsh nationalism[14].  Wales would be regarded as being directly associated with providing training for overseas military personnel, including from countries whose regimes have questionable human rights records. Further, in today’s divided world, the high-profile College offers a target for terrorist attack, with St Athan becoming a high surveillance zone. And such a massive military project on Welsh soil goes against the ethos of sustainable development and international citizenship, which the Welsh Assembly claims to espouse.

Public Inquiry into the development project
The WAG rejected calls for a public inquiry under planning law, but could not avoid one over the Compulsory Purchase Orders (CPOs), held Jan/Feb. 2010.  Several Welsh organisations including  Cynefin y Werin presented cases against the CPOs.  The substantial local opposition showed that claims of ‘overwhelming’ public support by consultants (adopted by Rhodri Morgan[15]) were fabricated.  Much opposition centred on the huge extent of greenfield development, instead of using land available within the MoD base.  Though the numbers of trainees and staff had been scaled down, the size of the development remained unchanged. The Community Council and others argued that instead of a new northern access road through meadows and disturbing housing, a direct access via West Camp is feasible.  The Inspector’s report was completed last March, but WAG and the MoD are delaying publication, raising concerns about the legal process has been subordinated to the government’s development interests.  Has the Inspector decided that the CPOs cannot all be said to be ‘necessary in the public interest’ – especially the linked Weycock Cross road junction development – so are they trying to fix the problem in secret[16]? 

Will the down-scaled project be cut in the Strategic Defence Review?
The severe down-scaling of the whole St Athan project (from 6000 to 2700 or even 2000 trainee places) removes the logic for a new College requiring nearly £1 billion investment.  There’s a generous £830.5 million capital for the College itself[17], including quality housing and extravagant sports facilities (Table below), plus roads and infrastructure at up to £60M[18].  Instead, the Defence College of Aeronautical Engineering could stay at Cosford airbase and the integrated training be provided at the empty Blandford base[19].  The Navy’s training base is already planned to stay at Gosport till at least 2020.  Upgrading Cosford and Blandford’s facilities for the reduced numbers is relatively cheap.  Expectations from selling off other MoD land for development have been hit by the Credit Crunch[20].

Nevertheless, Defence Minister Nick Harvey (Commons answer[21] to Mark Pritchard MP of 5th July) showed no intention to genuinely review the scheme.  He spoke of “obvious synergy” with other work at St Athan and that any change would “add considerably to the final cost”.  The first is false as DARA work and workforce is rapidly disappearing from St Athan[22].  The second prejudges the review.

Metrix Lobbying via PR firm, Bell Pottinger
Private Eye has disclosed a lobby campaign[23] aimed at Ministers in the new government.  Their “congratulation letters” to re-elected MPs promised a “series of good-news events if DTC goes ahead” and “a considerable backlash in Wales if it did not”.  Supportive Lib Dems in Wales were targeted as “a route through to David Laws and Nick Harvey”.  Evidently Metrix and their PR company (Bell Pottinger) hit their target as Dennis Anderson (Treasury replacement for David Laws) and Defence Minister Nick Harvey are down to attend the Metrix dinner at the Lib Dem Party conference, hosted by the Welsh leader Kirsty Williams AM.

Chris Bryant MP and Alun Cairns MP have set up a cross-party parliamentary group to lobby for Metrix, while Chris Bryant admits to taking £2,500 for election expenses from Bell Pottinger.  Both are reportedly hosting dinners for Metrix at their respective Party conferences.   

Opposition to privatisation
The Defence Training Review started with the aim of integrating trainees across the services, but was pushed by government down the PFI road.  At the time, this kept spending off the balance sheet and raised capital for new facilities from the market.  The accounting loophole has now been plugged and PFI has been exposed as often giving poor value.  The next biggest PFI within the MoD has over 50% going on profits and finance costs[24].  The union representing training staff, PCS, wants defence training to remain in the public sector, pointing to the record from privatising military services in the USA that shows (Blackwater) a lack of accountability to government and abuse of human rights. Privatisation risks the quality of training[25].  An MoD risk assessment leaked to Private Eye revealed that the project poses serious risks to the front line: “trained output could fail to meet requirement of operational commands “, “there is a risk that Metrix will not be able to deliver the numbers of suitably trained personnel that are required and/or that the training output is not to a sufficiently high standard.” Private Eye reported[26] opposition of top military staff: “I was very impressed by the training facilities” wrote Air Vice-Marshal Nick Kurth after a visit to Cosford, “with a good mix of traditional hands-on work, for which there is ultimately no substitute, to the relatively high-end computer based simulation where appropriate and I question what further level of innovation that  Metrix are going to bring to our extant training regime”. His worries echo concerns that Metrix will substitute cheaper computer simulation in place of the practice with military kit. Training staff are now drawn from serving personnel retiring after years of experience, and they would mostly not move to St Athan. 
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Table of Construction Expenditure for DTC Expenditure by category of development
£ million
DTC Training Facilities
96
SLA (Single Living) Accommodation
240
SFA (Service Family Accommodation) Housing (483 units)
130.5
Recreation and shopping facilities (crèche, shops, post office, tailor, bars, car hire centre, community centre, etc.)
3
Leisure centre and sporting facilities
32
Museum
23
Hotel (150 bed)
12
Church
3.5
Messes, kitchens, office facilities, facilities for bands (marching bands), headquarters building, estate support buildings (deliveries, waste centre, pass office) infrastructure elements (energy centre) medical, dental.
421
Total
830.5




[1] Compiled with information not readily available, from Metrix exhibitions in the locality and other details from Barry & Vale Friends of the Earth group, from documents to the CPO Public Inquiry (Jan-Feb. 2010) and from the PCS Union who monitor the project from a critical position on behalf of their membership (trainer staff etc.). Some is at and


[1] St Athan Defence Training Academy and the Future of Wales Cynefin y Werin pamphlet by Stuart Tannock, 2007, available at  ; saw the Academy (now renamed Technical College) as a step towards the privatisation of war activities.  Analogies have been drawn with the School of Americas (John Pilger http://www.antimetrix.org/). Metrix would train not just the British military - forces from around the world, including Pakistan, Malaysia and more dodgy regimes could be trained in Wales.
[2] Raytheon produce Tomahawk missiles that deliver cluster munitions and depleted Uranium shells.
[4] Package-1 includes training in aeronautical and mechanical engineering, communications and information systems; Package-2 covered logistics, photography, joint police and personnel admin, security, languages and intelligence. 
[5] Western Mail 20 August 2010, www.walesonline.co.uk/.../question-over-st-athan-plan-as-predicted-costs-rise-3bn-91466-27100062/.  On 6th Sept. 2010, the Minister stated the “increase in costs since 2008 results from the substantial increased cost of finance, increased provision for risk, and the changed assumption for inflation throughout the life of the project”, implying much of the increase is special to PFI financing.
[6] Nick Harvey The current estimate of the cost of the Defence Training Rationalisation Package 1 Project is £14 billion compared to the £12 billion reported on 10 September 2008, Hansard, column 1807W. This represents the cost for the provision of the construction of new facilities at St Athan and the whole operating costs for the entire 30 year life of the project. These operating costs include staff, catering and maintenance costs, the majority of which we already carry today. The increase in costs since 2008 results from the substantial increased cost of finance, increased provision for risk, and the changed assumption for inflation throughout the life of the project.
[7] MoD website on the DTR   The Telegraph commented (7 Aug.2010) “Apart from politicians' serious doubts about their value to the taxpayer, PFIs tie the Government into high capital costs which must be paid back regularly. That means no flexibility to spend less in years when there is a need to save money.” < www.telegraph.co.uk/finance/newsbysector/industry/defence/7931900/20bn-defence-contracts-face-axe.html>

[8] 24 Feb.2009:  www.dailymail.co.uk/money/article-1154863/Ministry-Defence-spends-40m-ailing-contract.html.  On 25 Feb.2010 the FT reported £32m underwriting risk

[9] Cabinet update, Jan. 2010  http://wales.gov.uk/docs//dfm/minutes/cabinet/100304stathanen.doc
[10] £240M on SLA (single living accommodation) and £130.5M  on service family housing out of a total of £830.5M  (Table above)
www.antimetrix.org/2009/02/state-underwrites-st-athan-defences-pfi.html .  Another £60m on roads and infrastructure is to be shared 50/50 MoD/WAG
[12] Metrix’s breakdown of numbers (Inquiry doc. CD 5B.7) shows totals rounded up compared with figures given in March 2009 presentations (below, in brackets[ ]):  Project staff numbers are
● Metrix staff in Facilities and Estates 910 [865], include security, transport, catering, as well as project management and training management transferred to St Athan
● Civilian Trainer staff to be transferred from existing training centres number 900 [735]
They also count Military staff seconded to the project at 700 [655].
The Project staff numbers total 2510 [2255]. To make up the 3000 total ‘jobs’, non-Project numbers are included (F&E 130, Training services 50, Military 310). These non-Project staff include the military band and Museum staff, and are existing posts transferring to St Athan.  The Entec Final Economic Impact Report May 2009, Table 1.4  contains similar numbers to Inquiry doc. CD 5B.7.
[13] Of the 700 military staff, 550 are expected to need family accommodation.  Taking a similar fraction (80%) of all transferees with families and each bringing 0.6-1 spouses/older children seeking work results in12-1900 jobseekers.
[14] Robin Gwyndaf, Na i Academi Filwrol – Ie i Academi Heddwch [No to a Military Academy – Yes to a Peace Academy], Cymod (Newsletter Cymdeithas y Cymod yng Nghymru – FoR in Wales), p.4, Spring 2009.
[15] March 2009 http://www.plasticductwork.com/news/2009/03/27/public-is-backing-brilliant-mod-st-athan-project/
[17]  Table 4.9, Economic Impact Report Draft May09v2, Entec UK, reproduced above
[18] 12 May 2009, Minister’s statement. http://wales.gov.uk/about/cabinet/cabinetstatements/2009/stathan/?lang=en
[19] Information from the Trades Union PCS who represent the trainer-staff and have given information for this Briefing  Mr H O’Harney;  the alternative said to require upgrading at 9 bases is Metrix misinformation.
[21] Nick Harvey (Minister of State (Armed Forces), Defence; North Devon, Liberal Democrat)
“My hon. Friend is aware that there were two different proposals in the final analysis for the defence training review facilities: Cosford and St Athan. Those were subject to the most detailed scrutiny to decide which was the better fit for our defence requirements and the decision was that the defence training review should relocate facilities to St Athan. We believe that there is an obvious synergy between that and other work at St Athan, particular in high technology, and a lot of work has already gone into preparing for that move. To change course now, as he suggests, would undo a great deal of investment that has already been made and add considerably to the final cost.”
[22] At the CPO Inquiry when questioned on ‘synergy’,  Nicola Goodwin-Bailey, Head of Planning (WAG E&T) claimed “complementarity”, quoting the WAG Minister’s statement of 24 March 2006, saying their Aerospace plans were complementary and would go ahead “whatever the outcome of the DTR bid”.  She admitted the DTC (Training College) did not have the “synergies” seen originally with the DARA aircraft maintenance and refitting work. Her evidence said (Appendix 4) the loss of DARA would “seriously weaken” the ABP and “could lose critical mass” (s.4.4) and “if DARA were to fail... undermine the credibility of the aerospace park… remove a major reason for other companies to locate there” (6.6a(i)).  That has indeed happened, as only one company (Bond) remains on site.
[23] PFI In a Spin, Private Eye 4th August 2010
[24] HoC Public Accounts Committee.  Delivering Multi-Role Tanker Aircraft Capability www.publications.parliament.uk/pa/cm201011/cmselect/cmpubacc/425/42503.htm

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