Ajax Programme: Cost

Defence – in the House of Commons on 10th January 2022.

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Photo of Nick Smith Nick Smith Labour, Blaenau Gwent

What recent estimate he has made of the cost of the Ajax programme.

Photo of Jeremy Quin Jeremy Quin The Minister of State, Ministry of Defence

As reported by the Infrastructure and Projects Authority in July 2021, the budgeted cost of Ajax is £6.354 billion to manufacture the vehicle and bring it to full operating capability and for its first period of service. Forecasts are updated twice yearly and our current forecast is that we will deliver under budget at £5.915 billion, though that is subject to change. That includes our £5.5 billion firm contract with General Dynamics.

Photo of Nick Smith Nick Smith Labour, Blaenau Gwent

Thank you, Mr Speaker, for the short tribute to our comrade Jack Dromey.

The latest document on Ajax is enough to make anyone weep. It points to an alphabet soup of accountabilities and a saga of poor procurement, and says that the vehicle thus far is not fit for purpose. And of course it has been a health and safety minefield. This project matters for our military capability and for the 4,000-strong workforce in south Wales and across the UK. In his December statement, the Minister ended on an optimistic note when responding to a question about the workforce from my hon. Friend Gerald Jones. Can the Minister give us the expected timeline for fixing these issues?

Photo of Jeremy Quin Jeremy Quin The Minister of State, Ministry of Defence

The hon. Gentleman is correct to say that I sounded an upbeat note in terms of the jobs in south Wales. We were right to commission the report. It was a thorough report and I believe it was right to publish it so that this House knew exactly where we stood on Ajax. On the question of employment, there are some 4,100 jobs across the country in 230 companies, and the programme is particularly important to south Wales. I was upbeat to the extent that I believe that we must work together with General Dynamics to fix this issue. We have now received a draft report from Millbrook, as I outlined in my last statement, and there is work to be done on that. We may not really get to grips with that until July, but progress is being made. Certainly I believe that the independent work that General Dynamics is doing in Horiba-Mira and elsewhere can resolve these issues. We need to test that very carefully, but we have invested very heavily in this project, it is an important capability and we are determined to make it work if we possibly can.

Photo of Caroline Dinenage Caroline Dinenage Conservative, Gosport

I would also like to express my condolences on the loss of Jack Dromey, who made his maiden speech the same day that I made mine. I was very fond of him.

I have no doubt that some of the procurement processes that were inherited from the last Labour Government led to some of the flaws in the Ajax programme. I say that because it is emblematic of a catalogue of wasteful decisions such as the selling off of the Royal Naval Hospital Haslar in 2009 for £3 million when it had reportedly been valued at £52 million. Could the Minister please assure me that the MOD’s procurement and disposal decisions, such as that involving Fort Blockhouse at Gosport, will maximise the benefit for the taxpayer and for local communities?

Photo of Jeremy Quin Jeremy Quin The Minister of State, Ministry of Defence

I congratulate my hon. Friend on her elevation; that is good to see. She refers to the approval process for Ajax, which was indeed under the last Labour Administration. I think it passed maingate business approval in March 2010, around the same time that the National Audit Office was pointing out the multi-billion pound black hole that the Labour party was leaving in Defence at the time. I do not believe that Fort Blockhouse will be disposed of until 2023, so there is time to get it right. I would be more than happy to meet my hon. Friend if that is helpful.

Photo of Chris Evans Chris Evans Shadow Minister (Defence)

I join other voices in expressing my own sadness at the loss of our colleague Jack Dromey. Jack was someone who committed his entire life to improving the lot of others. He was, and is, an example to us all.

Last month, the Government’s own report found that Ministers were in the dark about the serious issues surrounding Ajax for a whole two years before the current Minister was informed in 2020. During that time, soldiers were put in a vehicle that could cause harm. What new measures have been put in place to ensure that Ministers are fully on top of what is going on in their Department?

Photo of Jeremy Quin Jeremy Quin The Minister of State, Ministry of Defence

There is a whole raft of measures. I have met the hon. Gentleman and he is aware from reading the report of what has been set out. We immediately accepted the vast majority of recommendations. There are about two recommendations that need to be worked on, but the intent is there and our intent is to adopt them. One of the most important aspects is to make certain that all people with a view on safety are part of the decision making process, so that everyone with a view has an opportunity to air it and everyone is listened to with respect. We are also putting health and safety input into the highest ranks of the decision making process, so that major decisions cannot be made, either by Ministers or by other parts of the organisation, without that health and safety input right at the top of the organisation. These measures will help to ensure that such a situation does not reoccur.