MoD Acquisition and the Gray Report
The Ministry of Defence’s (MoD) equipment acquisition system has come under increasing fire over the last decade. The Gray Report
The review of the government's acquisition programme should be welcomed by all who care about equipping our Armed Forces with the right equipment, at the right time, within an affordable programme - and it is to be hoped that this includes both present defence ministers and their successors after the next election. House of Commons censures defence equipment delays
The House of Commons Defence Committee has published a damning report on Defence Equipment, highlighting the failure to translate strategy into an affordable equipment programme.
The Ministry of Defence (MoD) has recently published a Strategy for Defence. This strategy, focused on the period to 2014, maps out the path to the Defence Review which will take place after the General Election. The immediate goals are clear, even before we undertake a review; we have to succeed in Afghanistan, and any other contingent operations we are asked to undertake in the years ahead; we need to continue to meet our standing tasks against direct threats to the UK and overseas territories, including provision of the UK's independent nuclear deterrent.
Sir Bill Jeffrey detailed the crucial role that people across defence, both military and civilian, play in tackling these challenges.
Listen to the speech:
Full Text of Speech
The last four years - since I took on this job in late 2005 - have been turbulent times for the Ministry of Defence, among the most demanding in the Department's recent history. If the military deployments in Iraq and Afghanistan have stretched the Armed Forces - which they have - they have also stretched the Department that exists to support Defence Ministers, generate military capability and support these deployed forces.
So a great deal has happened in these four years, but I can still remember two early impressions. The first is the sheer diversity of Defence, the jobs people do, the enthusiasm with which they do them, the extent to which they depend on each other. The second is the extent to which it is a joint enterprise between military and civilian.
I scarcely need to make the point at RUSI, but one of the things that is not widely understood outside the defence community is that, compared with most Defence Departments internationally, we operate an extraordinarily integrated model. The Head Office of the MoD combines the functions of a Department of State and a strategic military headquarters. The Chief of Defence Staff (CDS) - who made his own very profound lecture here - and I have different roles: his to lead the Armed Forces, provide strategic command for deployed operations, and provide Ministers with military advice; mine to be Head of Department, Accounting Officer, to lead the civil servants, and to advise on policy, just as my opposite numbers do elsewhere in Whitehall. But he is my closest colleague, and at every level in the MoD one encounters similar relationships. Defence depends on them. At their best, they are mutually supportive, and the whole effect of the military and civilians combined, is a great deal more than the sum of the parts.
This morning, I want to talk about the challenges the MoD faces, but also about the people, the remarkable diversity of what they do, and the huge enthusiasm, energy and dedication they bring to it. The military side of this is, I think, better understood and receives more attention, and that is exactly as it should be. MoD civilians are among the Armed Forces' biggest admirers. But today I want to spend a little more time talking about the civilian contribution.
Turning to the challenges, the first and most obvious one is Afghanistan. We have been clear from the outset that support for the operation is the Department's highest priority. In the summer, the Defence Secretary, the CDS and I reinforced that message by saying that Afghanistan was our main effort. Not our only effort, because there are important standing tasks, such as the provision of the nuclear deterrent, which still need to be done, and there are long-term interests that need to be protected. But our main effort, in the sense that where there are judgements to be made about priorities, we give priority to support for the operation. The same message is central to the Strategy for Defence which we recently promulgated in the Department.
What does this mean in practice? It means teams of people - military and civilian - working in the most committed way to deliver logistic support and equipment to the front line, in a rapidly changing military environment. I think of the counter-IED team that briefed me a few months ago in Abbey Wood, project staff, MoD scientists, military officers, all working long hours, brimming with evident enthusiasm, knowing that if they get it right, keep pace with and exceed the enemy's development of IEDs, through their hard work and innovation they will save lives.
I think of the teams working, again in Abbey Wood, on urgent operational requirements (UOR) - again mixed military and civilian - striving to get better protected armoured vehicles into theatre. A Defence Select Committee report published in February said that the UOR process has 'continued to prove highly effective in enabling vital equipment to be provided in quick time to our Armed Forces in Iraq and Afghanistan.' New vehicles, such as Jackal and Mastiff, have been delivered much more rapidly than would be possible through the normal processes, by dint of huge efforts both by our own staff and by our suppliers.
We have not always got it right. A little-noticed National Audit Office report earlier this year on support for operations in Iraq and Afghanistan identified several shortcomings and lessons for the future, which we accept. But it also contained more positive references to successful support for operations than I have seen in a working lifetime of reading NAO reports. I quote. 'Confidence in UOR vehicles reliability and protection among Armed Forces personnel we spoke to in both theatres is high'; the supply chain is 'becoming more stable and resilient'; they found 'widespread confidence in the healthcare system' in both theatres; 'personnel in theatre were in the main complimentary about the quality of kit they received'.
I think also of the much-maligned 'pen-pushers', working at Joint Headquarters and in the Main Building, in the most intensive conditions, to ensure that Ministers get intelligent, properly thought through, reports on campaign progress and advice on policy and Parliamentary business. These are unsung roles, nowhere near the front line, but they are essential to the overall effort.
In theatre, the nation owes a huge debt to the brave men and women who are facing severe risks and - as we saw with the one-hundredth fatality the other day - taking horrendous casualties at and close to the front line. But again there are others playing essential supporting roles, including around 100 MoD civilians. I notice the award of campaign medals to these deployed civilians, all of whom are volunteers, was recently condemned by one national newspaper. They include staff who provide close support and advice for military commanders, some who deal daily with angry Afghans seeking compensation for damage or injury, and a woman police officer I met recently who voluntarily deployed to Afghanistan for six months to train and mentor the Afghan National Police, and spent her time developing and training female Afghan police officers and promoting their standing within the organisation.
I won't enter a bidding war to estimate just how long, but Afghanistan will, in my judgement, remain the Department's biggest challenge for some time to come. And the commitments announced by the Prime Minister and President Obama last week give the international community, with the Afghans, a real opportunity to change the dynamic and make progress. It is absolutely essential that as a department we are ready and able to play our part. That means, crucially, keeping our people - all of them - motivated, building on their natural enthusiasm and, as leaders, leaving them in no doubt about where our priorities lie.
One last word on Afghanistan. Amidst the speculation about troop numbers, too little attention has, in my view, been given to the approach recommended by General McChrystal. With its emphasis on building Afghan capability, including close partnership with Afghan security forces, counterinsurgency and above all integrated military-civilian effort, it is very close to UK thinking of recent years. As the joint team in Lashkar Gah demonstrates, we have ourselves learned a great deal in the last few years. What matters most is what happens on the ground, but within Whitehall my Foreign Office and DFID colleagues and I have been doing our best, in support of Ministers, to improve the way our Departments work together. Early next year, we will make our fifth visit to theatre together, to give the strongest possible signal to our people of the importance of making Afghanistan a genuinely cross-Departmental effort.
The second big challenge for the MoD is to balance the cost of our programme with the money available to pay for it. This is not a new issue. Although the phenomenon known as 'defence inflation' is not fully understood, there is no doubt that the unit cost of equipment at the leading edge of technology has for many years been increasing more rapidly than general inflation, even if pound for pound one is acquiring more capable equipment. Likewise our people costs, military and civilian - which, in a people business, account for more than a third of our budget - have been growing more rapidly than general inflation. And, as Bernard Gray's recent report highlights, we tend to underestimate the cost of equipment projects and, in responding to budgetary pressures, to reprofile them over longer periods, thereby increasing their eventual cost and adding to the pressure.
Our biggest challenge - and it is not unique to us, I hear about similar issues on a larger scale whenever I visit Washington - is to get out of the cycle I have described. This is important not just because we have to live within the money Parliament provides, but because a predictably affordable programme is also one in which it is easier to respond rapidly to changes in requirements arising from experience in theatre. As I have said, a lot can be and has been done through the Urgent Operational Requirement process, but a more confidently affordable core budget would also be more flexible, where we can respond more quickly.
The steps that the Defence Secretary announced in publishing Bernard Gray's report - a ten year indicative budget, greater transparency about the affordability of plans against that budget, stronger central control of the programme, greater clarity about responsibilities and accountabilities of the main players within MoD - these are all definitely steps in the right direction. The post-Election Defence Review, to which all three major parties are now committed, and about which I will say more in a moment, is also an opportunity to get this right for the longer term.
However Ministers decide to do that, improved efficiency is bound to be part of it. The MoD, perhaps more than any other Government Departments, has demonstrated that it is possible to use efficiency savings to make more money available for the front line. In the 2004 Spending Review, we committed to £2.8 billion worth of efficiency savings. We met and exceeded that by £200 million by the end of the period, through initiatives such as logistics transformation; better management of our vehicle fleet; reforms in real audited savings, personnel management and rationalisation of the Defence estate. In the 2007 Spending Review, we committed to another £2.7 billion of savings - subsequently increased to £3.15 billion - and we are working hard to deliver them.
We have to be careful about this. The Haddon-Cave report on the tragic Nimrod accident demonstrates how important it is not to lose sight of vital elements of our job of which safety is the most important. But safety and value for money are not in conflict. We simply have to organise ourselves so that we achieve both.
Over the last twelve years, partly as a result of the efficiency programme to which I've referred, the number of MoD civilians has fallen from 133,290 to 86,200, a reduction of more than 45,000. Some of these represent jobs outsourced to private sector providers. But most reflect change in the way we do business, such as programmes to reduce staff numbers in our central London offices, an extensive business improvement change programme within our Defence Equipment and Support function, improved ways of working across Defence and the continued rationalisation of the Defence estate.
That process has to continue, and we are already assuming further reductions over the next few years. We need an intelligent debate within Defence about how best to achieve that, which takes account of what our civilian staff actually do, and doesn't treat them - as some media comment does - as if they were merely an overhead to the main effort.
I have already spoken about the civilian contribution to Afghanistan, but consider these facts. Of the MoD's 86,000 or so civilians, around half directly support the front line commands. These include about 1000 firefighters, 1400 teachers, nearly 2000 instructors and 1800 scientists, engineers and technicians. Around 11,000 are industrial staff, many of them like the Defence Support Group staff I met at Donnington a few weeks ago overhauling tanks to be returned to Afghanistan, doing manual work which in many other countries would be done by uniformed military staff. Almost 10,000 are locally engaged overseas, 9700 are in trading funds like the Met Office which generate income and largely pay their way, 2300 are in the Royal Fleet Auxiliary, providing essential support to Naval warships at sea, a role undertaken by Naval personnel in other countries. Only 2 per cent are in the Head Office in London.
These are people who deserve our gratitude and support. They are all intrinsic to the Defence effort. As General Sir Peter Wall, Commander in Chief, Land Forces said recently
'I've worked in the Ministry of Defence in a number of guises and I have worked very closely with civil servants. They are part of the team that delivers defence, whether it is personnel, support or operations.'
Civilians are also central to a process which has been underway for many years, going back to the 1994 report 'Front Line First' and beyond - the civilianisation of jobs which do not require specific military skills or knowledge but which would otherwise have to be done by military personnel. Just as in the police, it has to make sense in Defence for expensively trained uniformed staff to be able to focus on the core military work they were trained to do. The involvement of civilians in key enabling tasks such as the maintenance of aircraft and the delivery of strategic communications to the front line are good examples of the benefits of civilianisation. Good examples also of the essential partnership between military and civilian that underpins Defence.
The third big challenge we face in the next year or so is to support Ministers, whoever they may be, through a Defence Review which is likely to be one of the most challenging and far-reaching for many years. This is core Department of State business. We already have a strong team working to prepare the ground for whichever party wins the next Election. The fact that the Defence Secretary has encouraged us to do this work and plans to publish a consultative paper early next year is both a strength and an opportunity.
The Defence review when it comes needs to be grounded in wider national security policy, and - depending on the outcome of the Election - it is possible that it will be part of a wider security and defence review. Either way it will need to be intellectually robust; to explore thoroughly and imaginatively the future for which we are planning Defence capability; to assess in particular the balance between inherently unknowable but potentially serious longer term threats and requirements that arise more from our current experience; and to factor in a realistic - not pessimistic, but realistic - view of the resources that are likely to be available and how we can get best value from them.
That is a huge canvas, but it is also a huge opportunity for the MoD. It falls mainly, but by no means exclusively, to the civilian side of the Ministry, in our traditional role as advisers to Ministers, although it would be an unwise Secretary of State and a foolish Permanent Secretary who didn't pay careful attention to the views of the Chiefs of Staff and those who support them. It would also be an unwise MoD that failed to take advantage of the knowledge base and intellectual resource that exists in RUSI and the other institutions and individuals who take a close interest in Defence.
These three big challenge - Afghanistan in the foreground; the linked issues of Departmental capability, efficiency and affordability of the programme; and the prospect of a Defence Review - are what dominates the Defence landscape. We will stand to be judged on how well we rise to them. My main message this morning is that they all depend in one way or another on the commitment and enthusiasm of our people. We shouldn't, and I don't, take that commitment for granted. The military rightly receive plaudits, not least for their performance in theatre which is nothing short of inspiring. But the MoD civilians play an essential role at all levels. They are proud to be part of the team, and I am proud to lead them.
The views expressed above are the author's own, and do not necessarily reflect those of RUSI