The 13 Chosen Mandarins accomplished these impossible accounting miracles by making sure no one else, not even within Defense, knew what they were doing.
The triumvirate controlling the group of 13 was Ursula Brennan; General Sir David Richards, Chief of the Defense Staff; and Bernard Gray, chief of defense equipment. They made sure that only they and their 10 chosen subordinates could see the briefing they were preparing for the National Security Council.
In theory, a Defense Secretary other than Philip Hammond was allowed to see the numbers – Sir Peter Luff, Defense Procurement Secretary – but I’ve interviewed him since and he says no one has told him.
This secrecy was lucky for Richards, Gray and Brennan, as the figures they produced to support the £2bn leaks for catapults were not credible at all.
First, the mandarins have pushed up the cost of US-made catapult equipment by more than £300 million, despite written US cost guarantees. It was also claimed that purchasing this US equipment would mean significant sales tax to be paid – but this was UK VAT!
Not only would UK VAT cost the Treasury nothing, it wouldn’t have to be paid: under the VAT Act, a simple international agreement, which the US would have been happy to sign, would have removed the obligation.
These fictitious “costs” aside, the shipbuilders’ quote for customizing one of their “customizable” ships suddenly jumped 60 percent higher than in 2010.
Even all this, however, was not enough to reach £2 billion: the total was then £1.766 billion.
At this point, the 13 mandarins decided they had to add a significant amount for the inflation that could happen before the slingshot deals were inked, which they simultaneously insisted was imminent. The tangerines were anticipating an inflation of 13.25 percent. This, in 2012.
This meant that the new estimated cost of customizing a customizable carrier came to – good sir – exactly £2bn. Not £1.999 billion, not £2.001 billion: £2,000 billion exactly.
The exact figure had already been leaked by “defense insiders” many months before the 13 mandarins even started working on this estimate.
A remarkable coincidence
The 13 mandarins did not limit themselves to this. With an inexplicable stroke of the pen, they significantly narrowed the price difference between the F-35B and C versions. Putting this hugely low cost against the wildly inflated, fictitious £2 billion slingshot bill, it was simply possible to argue that canceling the slingshot scheme would save money.
An inconvenient report from the Ministry of Defense research bureau just then, marked SECRET – UK EYES ONLY, was simply ignored.
The report stated that it would take a much greater number of jump jets to achieve the same combat power as a given number of F-35C catapult aircraft.
I’ve since been able to look at that report and it also says the total cost of an F-35C catapult fleet would be over £2.4 billion cheaper than the F-35B jumpjet – more than wiping out even the comical estimate of £2 billion for catapults.
Richards, Brennan and Gray forgot to include the findings of that report in their briefing to the Prime Minister.
Even all this creative accounting could not possibly make an aircraft carrier without a jumpjet catapult seem cheaper than an aircraft carrier with F-18 Hornets, so the 13 Mandarins seemed to discount the existence of the F-18 (and the French Rafale).
These planes were not even mentioned in the briefing to the Prime Minister and the National Security Council.
When the 13 mandarins were later asked why these facts were not included, they replied tellingly that they had “ruled out these alternative fighter jets because they would need catapults and a distractor”.
Open and closed. In fact, Richards, Gray, Brennan and the rest of the 13 mandarins weren’t trying to save money, except perhaps in the very short term. They tried to overthrow the catapult-bearer project: and they succeeded – at least so far. In May 2012, the decision to cancel the catapult was announced.
As a result, last year the Queen Elizabeth, several escort ships and 3,700 sailors, pilots and marines went into danger almost unarmed.
Lord Richards, Sir Bernard Gray and Dame Ursula Brennan did not respond to requests for comment.