Monday, 4 October 2010

Note To Michael Smith And The Sunday Times

On page 2 of the Sunday Times dated 3rd of October 2010 is an article by a journalist named Michael Smith.

In this article the following claim is made about the Royal Navy's new Queen Elizabeth class aircraft carriers:

"The price of the two ships is put at nearly £6 billion,but their overall price over 10 years,with aircraft and running costs included,is about £35 billion."

This latter figure is repeated in an editorial on page 22 of the Sunday Times.

No source is given for these figures.

No breakdown of these figures is given.

Nor is it specified which 10 year period these figures refer to.

The costs of the new aircraft carriers are amortised over a project life which is likely to span 60 years from the signing of the production contract in 2008 to the expected Out of Service Date of the second carrier in 2068.

About half of the carrier's cost is incurred during the construction phase from 2008 to 2018.

To quote the cost of such a project "over ten years",including the construction phase, might be interpreted as a deliberate attempt to give a misleading impression of the project's cost.

We can come to a very rough estimate of the construction and operating costs of the Queen Elizabeth class carriers over the next 10 years by using publicly available figures.

The new Queen Elizabeth class aircraft carriers cost £5,133 Million,according to the Ministry Of Defence Major Projects Report 2009.

This is less than the "nearly £6 billion" suggested by Michael Smith in his article.

It is not clear whether that figure of £5,133 Million includes the money spent during the assessment phase which ran up to and including 2008.

The manufacturing phase of the Queen Elizabeth class aircraft carriers runs from 2008 to 2018.

It is not clear what the spending profile is over that period.

In Parliament on the 3rd of June 2010,Peter Luff,The Minister for Defence Equipment, Support and Technology said:

 "To the end of April 2010, around £1.2 billion has been spent on the Queen Elizabeth Class Aircraft Carriers. Our current estimate of total programme cost is £5.25 billion."

Which suggests that a further £4,050 Million will be spent on procuring the Queen Elizabeth class aircraft carriers between May 2010 and the commissioning of Her Majesty's Ship (H.M.S.) Prince of Wales in 2018.

That leaves us another £30,950 Million to account for in order to reach the "about £35 billion." mentioned by Michael Smith in his Sunday Times article.

In addition,there will be operating costs for H.M.S. Queen Elizabeth from her commissioning in 2016 and for H.M.S. Prince of Wales from 2018.

There are a variety of figures relating to the operating costs of the Queen Elizabeth class.

The following was said in evidence to the Defence Committee in 2010:

 "But, presumably, the older carriers
are more expensive, in efficiency terms, to operate in
some respects?"

 "Yes, but, depending
on how long you have to extend them, you might not
have to refit them.""

A parliamentary answer from 2008 gave the operating cost (including capital costs) of both HMS Illustrious and HMS Ark Royal as £138 Million in 2007-2008.

This would give an upper ceiling of £69 Million per ship per year which tallies with the figures of £44 Million given elsewhere.

Using this pessimistic upper figure gives us £414 Million for the 6 "ship years" between the commissioning of the two new carriers and 2020.

Adding the figure we came to earlier for constuction costs over the 10 years to 2020,we get a total of £4,464 Million.

Which is still £30,536 Million short of the "about £35 billion." mentioned by Michael Smith in his Sunday Times article.

The question of the cost of the air wing is rather more complex than the cost of the ships.

Often the cost of the entire buy of F35 fighter aircraft is attributed to the carrier project.

However,most of those aircraft are intended to be land based and are not needed for the Royal Navy's carrier wing.

The Sunday Times also neglected to mention that the carrier air wing will be replacing at least twice it's number of largely land based aircraft - it is not an "additional" cost to the defence budget.

It is known that the carrier wing will need 36 aircraft for major warfighting operations.

However,there will be a need for additional aircraft to cover training,trials,maintenance and attrition.

During the Falklands War in 1982,28 of the Royal Navy's 34 Sea Harrier aircraft flew in combat from Her Majesty's Ships Invincible and Hermes.

That is 82% of the total fleet surged for war fighting operations.

If the Royal Navy were to surge the same percentage of it's F35 fleet for major war fighting operations,it would require a total fleet of 44 F35s.

On the other hand,for every 4 aircraft sustained in frontline service with the Royal Air Force,there is typically 1 aircraft with a training unit and 2 more in maintenance or reserve.

Which suggests that 63 F35s would be required to sustain 36 aircraft in fhe frontline squadrons of the carrier wing.

Both of these figures are a small proportion of the planned total buy of F35s.

Officially the United Kingdom is planning to buy 150 F35s,as was made clear in evidence to the House of Commons Defence Committee in 2010:

"Chairman (James Arbuthnot):

 "I have said this before, and it is
perhaps a bit mean, but we all know what “up to
150” means—it means fewer than 150, particularly
nowadays with the pressure that there is on defence
budgets. Do you have any sort of rough ballpark
figure? If you were putting this “up to” figure into
ministerial speeches now, what would be it be?"

Mr Guy Lester (Director Capability Resources and Scrutiny):

"It would be up to 150, I think. One thing
I can say is there has been some speculation that we
have cut the number of JSF we are planning on
buying, but we have not, so up to 150 is still right.
There has not been a cut which is somehow buried
within that figure."

"Chairman (James Arbuthnot):

"But you know what you are
planning on buying, do you?"

General Sir Kevin O’Donoghue:

"Up to 150.""

However,the Americans seem to think the United Kingdom is buying 138 F35s,according to Page 88 of the current Joint Strike Fighter (J.S.F.) Memorandum Of Understanding (M.O.U.).

The discrepancy between these two figures is perhaps something which the Defence Committee might like to ask the Ministry of Defence about.

The Memorandum of Understanding sets out the current procurement schedule for the British F35s.

It lists 60 British aircraft being procured in the 10 years between 2011 and 2020,and 3 more in prior years - enough to sustain 36 frontline aircraft.

It is difficult to find reliable figures for the procurement cost of the F35.

Australian Dr.Steve Gumley,in October 2007,said:

"There are 108 different cost figures for the JSF that I am working with and each of them is correct."

However,for current purposes we will use figures from the FY 2011 United States Navy budget for the F35B Unit cost (Item Number 7 Page 1 of 8) and combine those with the procurement schedule set out in the December 2009 edition of the Joint Strike Fighter (J.S.F.) Memorandum Of Understanding (M.O.U.).

This gives us a total F35B procurement cost of $7,536.619 Million or £4,760.100 Million at today's exchange rate ($1.58329:£1) between 2011 and 2020.

This is an average of £79.3 Million per aircraft for the 60 aircraft procured over the 10 years in question.

If we add the £4,760 Million cost of procuring the aircraft to the £4,464 Million spent on building and operating the aircraft carriers we get a total of £9,224 Million spent over the ten years to 2020.

Which is still £25,776 Million short of the "about £35 billion." mentioned by Michael Smith in his Sunday Times article.

The 60 aircraft procured between 2011 and 2020 will be in service for 173 operating years over that period.

In addition,the 3 aircraft procured in earlier years will be in service for a further 30 aircraft years over the same period.

We have then to account for the cost of 203 F35B operating years over the 10 years in question.

This report gives the cost per flying hour (apparently excluding procurement costs) of the F35 as approximately £19,000.

If we assume a British F35 will fly 20 hours per month this gives us an operating cost of £926 Million for 203 F35 operating years.

Added to the costs we have already calculated for the procurement and operation of the carriers and the procurement of the F35s we get a grand total of £10,150 Million spread over the 10 years in question.

Which is still £24,850 Million short of the "about £35 billion." mentioned by Michael Smith in his Sunday Times article.

The magnitude of this difference is of such scale that it cannot be explained by the roughness of the above calculations.

This begs the question of where Michael Smith and the Sunday Times got that figure of "about £35 billion." from.

Can they explain how this figure was calculated?

Did they just make it up?

Did someone spoon feed it to them?

If so,whom?

Do they stand by this figure?

Will they retract this figure?

That said,let us consider the case for the aircraft carriers.

All figures are approximations but all can be backed up.

The lifecycle cost of both Queen Elizabeth class aircraft carriers annualised over their 50 year service life is likely to be about £200 Million.

The annualised lifecycle cost of their F35 carrier wing is likely to be about £500 Million.

Giving a total of about £700 Million a year over the next 50 years.

The alternative to the above carrier based air power system is to use land based aircraft.

However,land based aircraft have generated lower sortie rates than carrier based aircraft in every major air war the United Kingdom has been involved in since 1945.

Which means we would need far more land based aircraft to have the same effect on the enemy.

The figures vary from war to war but range from 40% more sorties per aircraft per day for the carrier aircraft during the liberation of Kuwait in 1991 to about 30 times more during the Falklands War of 1982.

Most often carrier based aircraft have generated twice as many sorties per aircraft per day as the land based aircraft of the Royal Air Force (Suez 1956,Kosovo 1999,Iraq 2003).

If we need twice as many land based aircraft to generate the same number of daily sorties our air fleet will cost twice as much.

It would have required a £1,000 Million a year fleet of land based F35s to match a £500 Million a year fleet of carrier based F35s in the Suez,Kosovo and Iraq conflicts for example.

During the 2001 invasion of Afghanistan it would have required a £2,000 Million a year fleet of F35s to match the sortie generation of a £500 Million a year carrier based F35 wing.

It is this cost effectiveness of the carrier wing which allows it to replace 2-3 times as many land based aircraft saving approximately £1,500 Million a year.

In addition the land based aircraft have to fly farther on each sortie and consequently they require more aerial refuelling.

The new Future Strategic Tanker Aircraft will cost about £600 Million for every year of full capability it provides.

Which is about 3 times the cost of the aircraft carriers.

A full capability carrier wing allows that cost to be cut by at least half.

The savings on tanker aircraft alone more than pay for the cost of the aircraft carriers.

On top of that,force protection and logistics costs are usually cheaper for warships than for land bases.

Given the massive annual savings which the carriers will permit,they must be George Osbourne's favourite weapon system,or does he prefer the axe?

The United Kingdom has been involved in 7 major air wars since 1945.

In every case a large aircraft carrier was demonstrably the cheapest way to deliver air power.

The United Kingdom has three options for supporting expeditionary warfighting in future:

1.No air power.

2.Low cost carrier air power

3.Expensive land based air power.

Financial considerations dictate that option 3 is not viable.

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