Ministry of Defence
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National Audit Office report - Red Dragon
The National Audit Office today published its report into Red Dragon, a joint project by the MoD and Welsh Assembly to develop part of the St Athan site near Cardiff into an aerospace business park. The report acknowledges that, while the Red Dragon project did not deliver the anticipated savings, the MoD has saved more than £1.4 billion through a restructure of fast-jet aircraft repair that led to Red Dragon's early closure.
Defence Minister, Quentin Davis said:
"It is vital that we get the most from defence expenditure, which is why the closure of the Red Dragon project was the right thing to do to secure greater savings in the longer term. We welcome the findings of today's NAO report and its acknowledgement of the billions of pounds that the MoD has saved. The Red Dragon super-hanger will now be used as part of the Defence Training Academy."
The MOD accepts that lessons have been learned as a result of Red Dragon. However, the decisions taken in 2004 to transfer fast-jet repair work to RAF frontline bases from St Athan resulted in savings worth more than £1.4 billion. The move offered better support to the RAF at lower cost.
The St Athan site will now accommodate the new Defence Training Academy, under the Defence Training Review. It will create 2,500 jobs on site, with a further 750 to 1500 additional jobs in the wider economy and up to 1500 jobs in the construction phase. The aircraft super-hanger originally built as a part of Red Dragon will be an important part of the new academy.
ENDS
NOTES TO EDITORS:
* The Red Dragon project began in 2000. Before the contract was signed, the Defence Aviation Repair Agency (DARA) Ministerial Advisory Board concluded that the project offered savings of £20M per annum. As a result, the Red Dragon contract was signed in February 2003.
* In July 2003, an internal report (E2E) recommended that repairs and support for MOD aircraft and helicopters should be concentrated at single "hubs" for each aircraft type. The study team believed that these hubs should be at front line bases. As a result, it was decided that the hubs would include RAF Cottesmore, RAF Marham and DARA Fleetlands - but not St Athan.
* Following the review, it was concluded that the Red Dragon super-hanger would need to attract non-MOD business if it were to remain viable.
* In November 2004 Minister AF announced that the DARA fast jet business at St Athan would close by April 2007. This was part of a series of decisions to save aircraft logistic support costs by £1.4B over six years, well in excess of the MOD net expenditure on Red Dragon, estimated at £57M.
* The Defence Training Review Programme seeks to improve and modernise the delivery of certain areas of specialist Phase 2 (trade training) and Phase 3 (professional training). It consists of 2 separate Projects termed Package 1 and Package 2. Phase 1 is Basic Training completed by the individual on joining the Services.
Package 1 is being taken forward as a Private Finance Initiative Project with the Metrix Consortium as Preferred Bidder. The Package 1 Project aims to "transform specialist technical training of the three Services, delivering it from first class facilities, to meet operational needs over the next 30 years". Subject to approval of the main investment decision for Package 1, the proposal plans to rationalise the current training sites to a new site at St Athan in 2015 which will make use of the Red Dragon Hangar. Construction is anticipated to begin at the St Athan site in 2010, and it is estimated that the Colleges will relocate to the new site in 2015.
* The Welsh Assembly Government (WAG) still intend to proceed with the aerospace park which could create up to a further 2000 jobs if it is successful. The NAO / Welsh Audit Office report also makes clear that the Welsh part of the site is worth some £45M and the WAG would therefore be likely to cover its costs if sufficient land could be sold for development.
