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30 June, 1926.]

Sir WALTER F. NICHOLSON, K.C.B., Major

[Continued.

General Sir WILLIAM A. LIDDELL, K.C.M.G., C.B., Air Vice-Marshal DAVID MUNRO, C.B., C.I.E., F.R.C.S., and H. W. W. MCANALLY, Esq., C.B.

2738. Was it erected in the war?-Yes. It was mainly in timber huts. We have now provided barrack accommodation for men and the biggest work at present in hand is an officer's mess which will be for 108 officers, I think. A flying training school is going to Spittlegate.

2739. Then we get to item 56. You have got here a series of items, 56 to 59. The first three I want to deal with. These are lump sums which refer to a number of different items scattered over

a

number of different stations?—Yes, that is the case.

2740. Have you no general rule that sums over a certain amount should be shown individually. £650,000 is over half a million of money. It is quite impossible for any Member of the House of Commons, looking at that, to know where that money is being spent, how it is being spent or what it is spent on, except that it is improvements to regimental and other temporary accommodation. Do you think that is reasonable? -(Sir Walter Nicholson.) That is a financial question that perhaps I ought to answer. I think the answer is firstly -I do not suggest this is an adequate answer that the Treasury, of course, very much look out for the precise points that you mentioned and they have been satisfied that in the circumstances it is reasonable for us to put in items in this form. The general picture is this. have a certain authorised married establishment which would mean a certain number of quarters. When these items were started, perhaps in 1920 or 1919, of course, there was a very big programme in view, an inevitable programme, and it was recognised that it would have to be brought about gradually, the men on married establishment meanwhile being given lodging allowance where necessary. It has been going on by degrees ever since and it is a question that the Treasury recognise can in substance best be left to the Air Ministry to determine in what particular place in a particular year they shall initiate further quarters within the scale.

You

2741. I would like to point out this to you. Here we have these three items, £650,000, £410,000 and £920,000, nearly two millions of money, with no explanation as to where this is being spent, and

for all we may know, these items may be expenditure in many of these other previous items which vou show as alterations and additions to accommodation; that is to say, that instead of alterations and additions to accommodation to one of these individual places being whatever it may be shown as. it may really be considerably more and it is hidden in one of these three items. Now I do not think, to put it to you fairly, that is really reasonable from the House of Commons point of view, and if any Member got up in the House and criticised from that point of view, it would be very difficult for the Minister to reply. If it was a question of £20.000 or £30,000, it would be another matter: but this is two millions of money which is being spent somewhere in the United Kingdom, we do not know where. We do not know whether it really means that several of these items on previous pages are very much higher than they are shown, because it is hidden here and we do not know whether the money in our opinion is justified or not, because we do not know where it has been spent, and I think you should seriously consider whether in future you should not put a footnote or another page showing for items down to say £10,000 or £5,000, where this is being spent. Do you follow my point? I follow your point.

2742. It is a very considerable sum of money to ask the House of Commons to vote without any explanation as to where it is being spent?-I agree; but the Committee will accept an assurance that it is not in the slightest degree the intention of these items to conceal anything.

2743. No, I do not suggest it is for a moment. It is probably that you do not look at it from our point of view; but we are responsible and these are all items, I gather, as Captain Bourne has pointed out, which are over £2,000 individually, and therefore they are all items of some substance, and it will probably save yourselves criticism if you would show, in a statement, which probably a Member, unless he was particularly interested in the subject, would not study very closely, what these items are and where they are being spent. It is a little difficult otherwise and you lay yourselves open to the argument that you may be trying to conceal expenditure in those items? I recognise your point, exactly.

[Continued.

30 June, 1926.] Sir WALTER F. NICHOLSON, K.C.B., Major General Sir WILLIAM A. LIDDELL, K.C.M.G., C.B., Air Vice-Marshal DAVID MUNRO, C.B., C.I.E., F.R.C.S., and H. W. W. McANALLY, Esq., C.B.

2744. Would you mind telling us what Item 59 is: Recreation Facilities?(General Sir William Liddell): The Government provides a certain amount of recreation for the troops, and in respect of football grounds and cricket pitches and that sort of thing it is recognised that the skilled labour and supervision might be charged to the public up to a certain amount—it is generally, say, £100 for a football ground-and that the rest of the labour shall be provided by the troops themselves. That £5,000

is the total amount spread all over the whole of the Air Force.

2745. It is £60,000 ?-It is £5,000 for next year.

2746. You mean £60,000 is a maximum? (Sir Walter Nicholson): £60,000 is the total running over a number of years. (General Sir William Liddell): In point of fact we very often do not spend this £5,000; we generally allow £3,000 this £5,000 a year but do not spend it all because of the difficulty of getting the regimental labour to do the unskilled work

2747. I gather that this item is separate and that in these other items of alterations and additions to accommodation you do not there also include recreation expenditure?-That is so.

2748. This is the only item dealing with recreation ?-Yes.

General Charteris.

2749. How was the original figure of £60,000 arrived at, do you happen to know, going back to the original Estimate ?-No, I am afraid I cannot answer that.

2750. It was probably many years ago? -Many years ago. (Sir Walter Nicholson.) It is based generally on a scale. There is a scale laid down.

2751. If the Air Force is expanding so quickly and if £60,000 were based on the scale of 12 years ago, it will probably be increased?-That first column, total estimate for the work, is revised yearly. When it first appeared as £60,000, I could not say, without reference.

2752. It is almost the only item in the page which has not had one of these letters to say that the Estimate is under revision or is being reduced. That is what attracted my attention to it.

(General Sir William Liddell.) I am afraid it is almost impossible to say, really.

Chairman.

2753. Then we get to Egypt. Under Item 70, Officers' Mess Kitchen.. Was there no Officers' Mess Kitchen there before? (Sir Walter Nicholson.) It was condemned on sanitary grounds. (General Sir William Liddell.) It was a temporary structure erected during the War which did not provide sufficient accommodation and was condemned on sanitary grounds.

2754. What do you mean by item 76, fire protection? It is the only item of its kind that I can find among this Vote. Was there some special necessity for fire protection there?-(Sir Walter Nicholson.) It is stores.

2755. It is a store depot, is it? It is not a store depot, but it is for the protection of stores. (General Sir William Liddell): We have in the aerodromes to adopt a rather elaborate system of fire protection, naturally, because of the value of the aeroplanes, as you must deal with fires extremely quickly. If you allow fire to spread, it means loss of many thousands of pounds.

2756. I was not criticising it; I was asking for information.-That is the explanation. In all these new stations, of course, fire protection is included in the estimates.

2757. The same remark that I made just now applies, you will notice, also to to certain Votes in Egypt, items 82, 85, and 86. As a general estimate it may apply to any of the stations you have in Egypt. As far as item 82 is concerned, it is practically all spent?-Yes, item 82 is spent.

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2758. Now item 92. What improvements to water supply are you making there for what building?-I regret to say I cannot wholly identify that. think it had something to do with storage, including the water supply for the baths, but I am afraid I cannot say definitely.

2759. I am asking you because you told us that there was a possibility of your altering your hospital arrangements, and I was wondering whether the money was being spent on hospital water supply.— No, it is not in connection with that hospital.

2760. Now Sarafand, item 98. Is that in Palestine ?—Yes.

30 June, 1926.] Sir WALTER F. NICHOLSON, K.C.B., Major

[Continued.

General Sir WILLIAM A. LIDDELL, K.O.M.G., C.B., Air Vice-Marshal DAVID Munro, C.B., C.I.E., F.R.C.S., and H. W. W. MCANALLY, Esq., C.B.

2761. If you propose to do away with your hospital accommodation in Palestine and evacuate your cases to Egypt, why are you spending £17,250 there?That, I am afraid, is entirely a matter of policy. When that hospital was decided upon an entirely different policy was in force in Palestine. Sir Herbert Samuel met the C.A.S. and there was considerable doubt about building work generally, but the one thing that they did think was essential was that hospital. At that time there was a cavalry regiment there, the R.A.F. was stronger than it is now, and there was also Palestine gendarmerie.

2762. When was that started?-That was started, I think, two years ago. We had on the site the framework of a considerable number of huts that the War Office previously sent out to Palestine. We utilised those huts and made them into a hospital.

2763. If the policy you suggest or outline is carried, probably these huts will become useless?-When I heard ViceMarshal Munro speak of it, it was the first time I had ever heard of the hospital being evacuated. I have heard that it will be reduced, but I doubt whether it will ever be evacuated. The Palestine Government will make use of it.

2764. As a civil hospital?-Yes.

General Charteris.

2765. The expenditure is recoverable, I notice in the note, from the civil Government in any case.-Yes.

2766. So in any case it is a civil expenditure in the Middle East Depart

ment.

Chairman.] The Middle East is our own Vote, the War Office; but that does not alter the matter that the money has been spent.

General Charteris.

2767. I suppose that is how Sir Herbert Samuel came into this?--Yes. (Sir Walter Nicholson.) I think I am right in saying that very considerable stress was laid on the cavalry regiment in deciding this. (General Sir William Liddell.) The cavalry regiment was there at the time and the existing hospital accommodation was really a scandal.

Chairman.

2768. On the other hand, I think I am right in saying that Palestine is not an unhealthy country?-No, it is not.

2769. It is not like Iraq?—No. I think the hospital was for 70 beds, as far as I remember at the moment.

2770. When will it be finished ?-It has been finished.

General Charteris.

2771. I want to ask first about the general organisation of the Works Department. You are not yourself a member of your Council, are you?-No.

2772. Which Department do you work under?-Immediately under the Chief of the Air Staff.

2773. Are your relations with the Chiet of the Air Staff approximately the same as your relations were with the Master General of Ordnance in the War Office? -Yes.

2774. Do you get the same amount of liberty in the way of suggesting alterations? Quite. I am not only an architect and builder, but I am very often a critic as well.

2775. It is, of course, a marked difference, working directly under the Chief of the Policy Section on the Council, as opposed to working under one of the administrative officers in the War Office ?-I am perfectly free to criticise or make any suggestion.

2776. Your staff is, in the main, civilian? It is entirely civilian.

2777. Have you worked out, in connection with that, the percentage of the staff charges under sub-heads of new works and repairs separately?—No, but I can give you them approximately. On works it would vary between 5 and 7 per cent.; that is, on new big works. On repairs it might be anything between 20 and 25 per cent.

2778. And on the total ?-On the total I have worked it out for last year. It you exclude lands, and take into consideration all our work, including civil aviation work, the total, without the Air Ministry staff, is 10.2. If you take into consideration the whole of the Air Ministry staff, which, of course, does a certain amount of administrative work as well, it comes out to 13-8; but that, of course, is providing for works abroad as well as works at home. If you take

SELECT COMMITTEE ON ESTIMATES.

Sir WALTER F. NICHOLSON, K.C.B., Major

[Continued.

30 June, 1926.] General Sir WILLIAM A. LIDDELL, K.C.M.G., C.B., Air Vice-Marshal David Munro, C.B., C.I.E., F.R.C.S., and H. W. W. MCANALLY, Esq., C.B.

into consideration home alone, the percentage all-in is about 10 per cent.

2779. Do you happen to know how those percentages compare with similar percentages in the War Office?-I have not got figures for the last two or three In the War Office overheads are years. are not certain other charges that allowed for in our figures; but I should say that we were about 4 to 5 per cent. below the War Office, on the whole. 2780. Mainly because you are employhave purely ing civilians? military civilian staff; they have duties.

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2781. And the Office of Works percentages; have you compared with them? -I found it impossible to arrive at the Office of Works percentages, because their budget on their works expenditure is based on quite different lines. We had a sub-committee of the Inter-Departmental Works Committee investigating overhead charges of the three fighting departments.

Chairman.

2782. Are you a Member of that Committee? I am a Member of that Committee. The sub-Committee reported to the parent Committee and it was agreed that for inter-Departmental transactions between the three Services an all round rate of 15 per cent. should be charged. Of course, we should gain on that in England and in Egypt (say), and probably work we if out we had to carry would lose on it in Mesopotamia and other places; but that was the general agreement to give an all round figure between the three. The Office of Works percentage is stated to be 7 per cent., but they do not put in their, what I may call, salary charges, certain things that we do include. And again in their works expenditure they put down expenditure on electricity, water supply, and other Services like that, which in the Army would be paid for by the Q.M.G.'s Department and in the Air Force under Vote 2.

General Charteris.

2783. Would there be any difficulty in your opinion in so arranging the Estimates of the Army and the Air Force that this percentage could be worked out comparably year by year on those two

main classifications of works and repairs and appear in the Estimates?-None at all.

2784. Would it not be a great advantage from the point of view both of efficiency and comparison that that should be done?-Yes, I think it would be quite reasonable.

2785. Would it not be part of the normal work of the Co-ordinating Committee to suggest that it should be done? -I think you are getting rather into the Works CoYou mean finance.

ordinating Committee?

2786. I mean the Works Co-ordinating out amongst Committee. We worked

ourselves the percentage, and are making a recommendation to the Treasury. I do not know that the form of the Estimates would quite come within our scope.

Chairman.

2787. It comes within our purview?— Yes.

General Charteris.

2788. The main point is that so far as you see and speaking both from your present position and from your experience in the War Office you see no difficulty in such a thing being done?-As a general guide None. It is extremely difficult to say how much of A's time in the Air Ministry is spent on new works and how much on repairs.

2789. Of course, but after all, the amount of work being done will give a very clear indication of that? Yes.

2790. Then with regard to the general question of co-ordination or combination between the works Services in the Air Force and in the Army, the actual repairs part of the work, with the exception I suppose, of the very small part of technical repair work like hangars, could be done equally well by either Service? Yes. work apart 2791. The constructional from design, could also, I suppose, be equally well done by either Service?-Yes, as far as execution goes.

2792. I mean that. As regards design, what is your opinion; is it possible or advantageous for design to be worked for both of the two services from a combined office? I do not think that would be with a young practicable especially

30 June, 1926.]

Sir WALTER F. NICHOLSON, K.C.B., Major

[Continued.

General Sir WILLIAM A. LIDDELL, K.C.M.G., C.B., Air Vice-Marshal DAVID MUNRO, C.B., C.I.E., F.R.C.S., and H. W. W. MCANALLY, Esq., C.B.

Service like the Air Force which is changing from month to month and from day to day in their requirements and their equipment. Take a small instance, that of parachutes suddenly coming in to use; that means that you have suddenly to put up a lot of storage for parachutes. It is a small matter, but it is typical. Then further than that, there are constant, daily, and hourly references between my staff and the other staff of the Air Ministry and it is only by this constant touch that we can keep designs up to date.

2793. That brings me to the other point. Is the work of your staff precisely the same as the work of the engineers' staff in the War Office as regards dealing with other Departments? In the Quartermaster General's Office, for instance, the Q. Staff Officers do have a considerable say? Yes, unquestionably so; in the Air Ministry what they call the D.O.S.D., the Director of Organisation and Staff Duties; his staff represents the Q. of the Army in Works matters.

2794. Then getting back on to the question of construction in a joint way, it would presumably be possible if you have a liaison officer, were he in the Air Force, to do that interchange of ideas with the local Air Staff and with the Chief Officer, with a certain amount of delegated power to work with the combined office?-I am afraid not. I have spoken on that subject to the Chief of the Air Staff and one point he brought out was this. If he wants to deal with a works and buildings question of any great importance he wants to see the head of the Executive Branch; a subordinate will not suit his purpose. He says it would be impossible for him to get hold of such a man at short notice to be at his elbow whenever he wanted him, because one of the other great Departments of Government would be doing exactly the same thing.

2795. I should have thought if the officer detached for this duty had sufficient delegated powers, it would work all right? Not in respect of powers of execution; you cannot give a liaison officer powers of execution, which is the point at issue.

2796. Is it not a fact that after the design is passed, variations in the construction should be few if at all?-I am afraid that is the policy of perfection.

Take, for instance, the Oxford and Cambridge small installations we have put up for them. The Secretary of State gave orders that those were to be erected by the 1st December. We could not get the ground until October. In such a case somebody has got to get busy and you have to go on doing your designs &c. practically as the work proceeds.

2797. I want to ask you some questions with regard to the method of accounting again, in comparison between the War Office and the Air Force. Is the same system applied in both Services?-We have a Cost Accounting system which is complete except in two main respects. One is the cost of freight for stores, which applies mainly to stores sent abroad; and the other point is that we do not charge against our costs, accommodation for the office staff, and stationery and travelling and a few other matters of that kind.

2798. But generally speaking, it is the same as in the War Service?-For administrative purposes we have got practically the same control as there is in the War Office. Take those sheds for the Palestine hospital. Those sheds were installed, but the value of the material of those sheds was charged to the work and is in these figures.

2799. Can you ensure by your system of accounting that on no occasion is any money paid to a Contractor before the portion of the work for which that payment is made, is completed-No payments in advance are made.-Payments on account are made.

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2800. But payments in advance of the work being done?-No, there would be no payments in advance; there would be payments account to the up prescribed limit which is in the contract. (Sir Walter Nicholson.) There may be some limited number of payments made in advance of the strict contract terms at the end of March under certain arrangements approved by the Public Accounts Committee. It does not bulk at all largely.

2801. Do you mean that the arrangements are approved the Public by Accounts Committee in advance of the payment being made or approved by them after they have seen what has happened? It is in accordance with the policy laid down by the Public Accounts Committee. The great bulk of the

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