Click here to view the embedded video.

Oh, yes, of course there is

MoD Gifts £26million to the Northern Ireland Assembly (H/T UK Defence Forum)

And there’s more where that came from

“A crucial question for the Ministry of Defence is whether it can use strategic financial management to stop living beyond its means. The current Strategic Defence and Security Review will provide an opportunity for the MOD to balance its books in the short-term. The greater challenge will be to keep spending plans affordable in the longer term. The Department is not at present placing enough emphasis on financial management to be able to do this.”

Mr Amyas Morse, head of the National Audit Office, 21 July 2010

I will maintain this over time but this is version 1

Party	Pledge or Promise	Reality
Lib Dem	With strong Treasury involvement, review all major defence procurement projects through the SSDR to ensure money is being spent effectively. We will not purchase tranche 3B of the Eurofighter.	Mo news on 3B but there will be strong treasury involvement in the SDR
Lib Dem	Rule out the like-for-like replacement of the Trident nuclear weapons system. At a cost of £100 billion over a lifetime it is unaffordable, and Britain’s security would be better served by alternatives	Trident replacement has been confirmed but value for money will come under greater scrutiny
Lib Dem	Reinvigorate Franco-British and wider European defence co-operation to ensure procurement costs are kept low.	Unclear, no real news or indications yet
Lib Dem	Give a pay rise to the lower ranks so that their pay is brought into line with the starting salary of their emergency services counterparts.	The budget has placed a pay freeze on all ranks except those on £21k or less, which is more or less Lance Corporal and below. Those under will get a few hundred pounds increase
Lib Dem	We will reduce the number of civilian staff in the Ministry of Defence	No news yet but can I suggest we start with diversity coordinators
Conservative	establish a new Permanent Military Command for Homeland Defence and Security to provide a more structured military contribution to homeland security	Interesting one this, especially since there was already one in existence
Conservative	we will press other members of NATO to take their fair share of the military burden	Nothing in the news as of yet
Conservative	We support the decision to renew Britain’s submarine-based nuclear deterrent, based on the Trident missile system.	Its looks like they are following through on this one
Conservative	We will release spending on unnecessary and bureaucratic EU defence initiatives and spend the money on our Armed Forces. As part of that process, we will re-evaluate our position with the European Defence Agency.	Nothing in the news yet
Conservative	We will double the operational allowance	Completed, well done
Conservative	maximise rest and recuperation leave	No news on how they are going to achieve this yet
Conservative	ensure our servicemen and women are treated in dedicated military wards in hospital	Another interesting one, given they were already in place
Conservative	Provide university and further education scholarships for the children of servicemen and women killed while on active duty	No news yet
Conservative	Immediate negotiations to achieve cost reductions from major suppliers	mmm
Conservative	it would also not be appropriate to make in-year reductions to the existing defence budget in 2010/11	Confirmed
Conservative	We will publish all items of spending over £25,000 online	No news yet
Conservative	place an obligation to manage taxpayers’ money wisely at the heart of civil service employment contracts	No news yet
Conservative	strengthening the role of the Chief Information Officer to get a grip on government ICT projects	No news yet
Conservative	We will review the structure of the Ministry of Defence to reduce running costs by 25 per cent	I know, lets reduce costs by running a LGBT seminar and giving GD (of BOWMAN infamy) a contract for £500million for 7 prototypes
Conservative	We will reform the procurement process to ensure the delivery of equipment on time and on budget.	No news yet

Whilst in Afghanistan recently

“I will give you my promise that we will do everything we can to ensure that, whatever you are asked to do, you are properly, fully equipped to do so, to maximise your chance of success and minimise the risk to you.”

His welcome speech on the first day of his new job

“Resources will be tight for the country as a whole and Defence is no exception. We must make sure that we make every penny spent on Defence count. This means we will have to look again at all that we currently do, including the organisation and structure of the Department, each of the Services and the support area to ensure that we can undertake confidently and effectively the key tasks for which MOD is responsible.”

Before getting his new office

“Now we have 99,000 in the army and 85,000 civilians in the MoD. Some things will have to change and believe me they will.”

In a speech in June this year

“We intend to create a more efficient and leaner centre where everyone knows what they are responsible for and who they are accountable to – with the deadlines and budgetary disciplines taken for granted elsewhere”

So one might think the entire MoD was on a war footing, focussing 110% of their energy on the business of achieving some kind of desirable outcome in Afghanistan, the Indian Ocean or any of the other operations we are involved in?

If not that, then working out how they can achieve meaningful cost savings to preserve capabilities?

No, OK, what about getting involved with the Strategic Security and Defence review?

Don’t we have a new broom sweeping clean, new politics, a laser like homing in on getting things sorted out?

What do you think?

Compare and contrast.

The MoD wonders why it has such a poor reputation?

How many man/woman/transgender hours have been spent organising the event, publicising, putting it on the intranet and web sites, managing the seating arrangements and writing speeches and PowerPoints?

Business as usual.

So what will be festering in the in tray?

A Budget Cut/Strategic Defence Review to manage

How to get out of Afghanistan with any shred of credibility

An equipment programme that is more or less out of control (see above)

They will be remembered for an ignominious withdrawal from Afghanistan, shutting down a range of sacred cows/equipment programmes, disbanding historic regiments and squadrons, decommissioning naval vessels and basically, managing yet more decline.

Which begs the question, why would anyone want the job?

More MoD staff appear in this this list than any other department, accounting for 16% of the total number and £14% of the £29.3 million annual salary and allowance bill. Defence is about 6.5% of total government spending.

The non execs work between 30 and 40 days per year

Plus of course, the ministers themselves;

Dr Liam Fox – Secretary of State for Defence
Nick Harvey – Minister for the Armed Forces
Gerald Howarth – Minister for International Security Strategy
Andrew Robathan – Minister for Defence Personnel, Welfare and Veterans
Lord Astor of Hever – Under Secretary of State for Defence (spokesman in Lords)
Peter Luff – Minister for Defence Equipment, Support and Technology

Value for money?

A former Guardsman with experience in Northern Ireland, Hong Kong and Malaysia he should be another strong appointee with plenty of experience.

He was previously an opposition spokesman on defence and is President of the Motorsport Industry Association.

The UK has a vibrant and innovative motorsport industry and there is absolutely no doubt, closer links between it and the MoD should be beneficial, technology transfers have created many advances for military vehicles.

Lets hope those industry connections don’t get in the way, like the unfortunate Gerald Howarth MP, who rumour has it, is on the wrong side of an MoD revolving door because of close links with the defence industry.

Oh, hang on…

In 2007, the Motorsport Industry Association initiated the Motorsport to Defence Initiative to foster greater co-operation and develop business opportunities, here is a quote from Lord Astor;

“The MIA Motorsport to Defence Programme has already delivered many new positive business opportunities for our Members in the defence sector. I am delighted that real business has been created.”

In this article and this one

Last week BAE representatives met the Motorsport Industry Association to discuss how innovations in racing can benefit the defence and aerospace industry

Here

Lord Astor and Gerald Howarth MP, Shadow Spokesman for Defence in the House of Lords and House of Commons respectively attended the event and were able to gain a first hand experience of the considerable effort the industry is putting in to support the FRES programme.

See if you can spot Lord Astor at the Autosport International Show where Supacat were exhibiting in support of the MIA Motorsport to Defence initiative.

The same Supacat that are bidding for the LPPV contract that Lord Astor might have some part in awarding.

Click here to spot him

To what extent is it legitimate for politicians to have links with manufacturers or their industry associations?

The defence and security aspects are as below

8. DEFENCE

The Government believes that we need to take action to safeguard our national security at home and abroad. We also recognise that we need to do much more to ensure that our Armed Forces have the support they need, and that veterans and their families are treated with the dignity that they deserve.

We will maintain Britain’s nuclear deterrent, and have agreed that the renewal of Trident should be scrutinised to ensure value for money. Liberal Democrats will continue to make the case for alternatives. We will immediately play a strong role in the Nuclear Non-Proliferation Treaty Review Conference, and press for continued progress on multilateral disarmament.

We will aim to reduce Ministry of Defence running costs by at least 25%.

We will work to rebuild the Military Covenant by:

• ensuring that Service personnel’s rest and recuperation leave can be maximised;
• changing the rules so that Service personnel only have to register once on the Service register;
• exploring the potential for including Service children as part of our proposals for a pupil premium;
• providing university and further education scholarships for the children of Servicemen and women who have been killed on active duty since 1990;
• providing support for ex-Service personnel to study at university,
• creating a new programme, ‘Troops for Teachers’, to recruit ex-Service personnel into the teaching profession;
• providing extra support for veteran mental health needs; and
• reviewing the rules governing the awarding of medals.

We will double the operational allowance for Armed Forces personnel serving in Afghanistan, and include Armed Forces pay in our plans for a fair pay review.

We will ensure that injured personnel are treated in dedicated military wards.

We will look at whether there is scope to refurbish Armed Forces’ accommodation from efficiencies within the Ministry of Defence.

We will support defence jobs through exports that are used for legitimate purposes, not internal repression, and will work for a full international ban on cluster munitions.

15. FOREIGN AFFAIRS

The Government believes that Britain must always be an active member of the global community, promoting our national interests while standing up for the values of freedom, fairness and responsibility. This means working as a constructive member of the United Nations, NATO and other multilateral organisations including the Commonwealth; working to promote stability and security; and pushing for reform of global institutions to ensure that they reflect the modern world.

We will take forward our shared resolve to safeguard the UK’s national security and support our Armed Forces in Afghanistan and elsewhere.

We will push for peace in the Middle East, with a secure and universally recognised Israel living alongside a sovereign and viable Palestinian state.

We will work to establish a new ‘special relationship’ with India and seek closer engagement with China, while standing firm on human rights in all our bilateral relationships.

We will maintain a strong, close and frank relationship with the United States.

We want to strengthen the Commonwealth as a focus for promoting democratic values and development.

We will work to promote stability in the Western Balkans.

We will support concerted international efforts to prevent Iran from obtaining a nuclear weapon.

We support reform of the UN Security Council, including permanent seats for Japan, India, Germany, Brazil and African representation.

We will work to intensify our cultural, educational, commercial and diplomatic links with many nations beyond Europe and North America to strengthen the UK’s relations with the fastest-growing areas of the world economy.

We will never condone the use of torture.

21. NATIONAL SECURITY

The Government believes that its primary responsibility is to ensure national security. We need a coherent approach to national security issues across government, and we will take action to tackle terrorism, and its causes, at home and abroad.

We have established a National Security Council and appointed a National Security Adviser.

We have commenced a Strategic Defence and Security Review, commissioned and overseen by the National Security Council, with strong Treasury involvement. We will also develop and publish a new National Security Strategy.

We will urgently review Control Orders, as part of a wider review of counter-terrorist legislation, measures and programmes. We will seek to find a practical way to allow the use of intercept evidence in court.

We will deny public funds to any group that has recently espoused or incited violence or hatred. We will proscribe such organisations, subject to the advice of the police and security and intelligence agencies.

We believe that Britain should be able to deport foreign nationals who threaten our security to countries where there are verifiable guarantees that they will not be tortured. We will seek to extend these guarantees to more countries.

Others

The next items are presented in summary format

We will take steps to open up government procurement and reduce costs; and we will publish government ICT contracts online.

We will require full, online disclosure of all central government spending and contracts over £25,000.

The Government believes that even in these difficult economic times, the UK has a moral responsibility to help the poorest people in the world. We will honour our aid commitments, but at the same time will ensure much greater transparency and scrutiny of aid spending to deliver value for money for British taxpayers and to maximise the impact of our aid budget.

We will honour our commitment to spend 0.7% of GNI on overseas aid from 2013, and to enshrine this commitment in law.

We will introduce full transparency in aid and publish details of all UK aid spending online. We will push for similarly high levels of transparency internationally.

We will keep aid untied from commercial interests, and will maintain DfID as an independent department focused on poverty reduction.

We will stick to the rules laid down by the OECD about what spending counts as aid.

We will support efforts to establish an International Arms Trade Treaty to limit the sales of arms to dangerous regimes.

We will provide a more integrated approach to post-conflict reconstruction where the British military is involved – building on the Stabilisation Unit in Whitehall and creating a new Stabilisation and Reconstruction Force to bridge the gap between the military and the reconstruction effort.

Link here 01st April 2010

Helpfully, the MoD website lists Related News (bottom right of the image) so what do these links reveal.

This one 24th February 2010 discusses the DCSU and states that it will come into being officially in April 2010, as above

The other link covers the DCSU again but this story describes the launch of the new unit.

So the MoD seems to be taking part in the tired old Labour Party trick of pre-announcing, announcing and then announcing the same thing yet again.

Our hearing identified the serious consequences of failings in the Department’s governance and budgetary processes. Even using the Department’s own, over-optimistic estimates the defence budget is unaffordable by some £6 billion. The exact size of the gap is dependent on the assumptions one makes about future funding, but the gap could easily be £36 billion and potentially even more.

Download it your self, here

It summarises it findings in 6 points;

1. The defence budget is unaffordable by between £6 billion and £36 billion. The deficit is a reflection of shortcomings in the Department’s governance and budgeting arrangements. The implications of the failings are not just about increasing costs and poor value for money on individual projects but, vitally, mean the Armed Forces will not get the operational benefits of new capabilities as quickly as expected and some equipments will only be delivered in reduced numbers. The Defence Green Paper and the Strategy for Acquisition Reform,[2] both published in February 2010, are a start at addressing the issues but do not tackle the fundamental unaffordability of the defence budget. Looking forward, the Department will undoubtedly need to take difficult decisions, including possibly cancelling projects.

2. HM Treasury did not act sufficiently quickly to challenge the growing unaffordability of the defence budget. The Treasury should seek greater assurance over the affordability of new projects in the context of the overall defence budget. The Treasury should also work with the Department to agree how the expertise available in both organisations can be harnessed to work together to ensure future defence equipment plans are constructed and managed on a realistic basis.

3. In future, the Department and HM Treasury will agree a 10 year planning horizon for the Equipment Plan. This is a step in the right direction but by itself will not be enough. The Department must learn from past experience to ensure its future equipment planning reflects the risk that cost increases in other, less flexible elements of the defence budget such as pay, pensions and PFI deals may ‘squeeze’ the funding available for equipment.

4. The Department hasn’t done enough to understand what effect changes in the availability of funding, cost growth on existing projects, or urgent new demands may have on the future equipment budget. The Department should analyse the effects of changes in funding assumptions and combine this with an analysis of its past track record to ensure there is sufficient contingency in the Equipment Plan to deal with possible cost growth and meet emerging operational needs.

5. The Department does not have good information on the overall costs and risks of its programmes. The Department should develop common measures of risk across its top 50 projects, which should include assessments of its commercial skills, the maturity of new technology, and knowledge of the systems used to integrate equipments. Taking into account other key variables (such as defence sector inflation and exposure to exchange rates) these assessments should then be aggregated so that the Department can take a balanced view on the scale of the risks to the delivery of military capability in its portfolio of equipment projects.

6. Delaying projects once they have started increases costs, postpones the delivery of military capability and puts the Department at a disadvantage as it tries to secure value from its commercial partners. In future the Department must ensure that decisions to accelerate or slow down projects, or change the numbers or capabilities of equipments, are supported by quantified operational and financial analyses to enable the full costs and benefits to be identified and compared on a like-for-like basis.

After decades of transformation, improvement programmes, reorganisation and the learning of lessons, the MoD is still a complete basket case.

We often complain of underfunding and it is justified in many ways but if the MoD is this disfunctional how would extra money make a blind bit of difference?

The next Government are going to have to be radical and determined to make a difference.

Conveniently forgetting the last 20 years of MoD bungling, Chief of Defence Material, Sir Kevin O’Donoghue, commented on the MoD’s performance;

To have reached this point in a complex programme so soon after the assessment phase began in summer 2008 reflects highly on the Defence Equipment and Support staff involved

It may well do but please let’s stop blowing smoke up our frocks and suggesting that this is anything but a rushed, back to the wall decision, based on running out of time due to what is possibly one of the most inept programmes in the MoD’s sorry history.

Making such a significant decision so close to an election and Strategic Defence Review is ridiculous. Another few months will not make any difference in the grand scheme of things.

At least it looks like the term FRES has been quietly dropped, perhaps an MP might table a question to inquire about the total cost of the programme, including delays and UOR’s as a result.

The vehicles will enter service, as long as the assessment phase goes according to plan, some time in 2015. Given that GD have yet to actually produce the Scout variant, unlike BAe, does anyone on this planet have any confidence that this date will actually materialise.

No word on contract value yet either, expect this to leak out once contracts have been placed but it is expected to be in the order of £2billion, or about £33 million a piece, although this figure will also include various additions such as logistics, training and other support elements.

We should remain hopeful, at least a decision has been made and the vehicle may well turn out to be the best option.

In other spending news, the MoD has also agreed to buy 3 Rivet Joint aircraft to replace the Nimrod R1’s which are being withdrawn from service in, 2011, in fact 1 has already been withdrawn. The R1 and 51 Squadron were a serious ‘go to’ capability that the UK led the world in.

Again, with no credible alternative the MoD has been forced to buy ‘the last chicken in the shop’ because there was no coherent or credible replacement for an aircraft that’s almost exactly as old as CVR(T)

Before the end of the week, expect more, possibly for the next phase of the Future Surface Combatant.

Getting these orders in before the election sets the Conservatives up, should they win the next election, for a honeymoon period kicking from a newly in opposition Labour party, should they chose to cancel post SDR.

It totally compromises the next strategic defence review and smacks of politics, rather than sane and sensible equipment planning.

Perhaps we should be grateful for at least some investment. Normally, we would be singing from the rooftops but can’t help feeling that the armed forces are being used for political gain.

Some things change, some things stay the same.

PS

This was out 300th post.

The Ministry of Defence

The Ministry of Defence hovers between two uncomfortable positions, the high cost of supporting operations abroad on one hand and on the other, a desire to maintain the mystical ‘balanced capability’. The £32 billion budget means that spending priorities can lurch between these two posts, applying pain equally without having to decisively focus on one.

We fail to adequately resource operations in order to balance future capabilities but these future capabilities are always compromised by budget pressures, a vicious circle.

A serious reduction in budget would force the issue, no hedging, no muddling through and not relying on wishful thinking as a strategic option.

The MoD needs to get lean and focus on core activity and is the only way to achieve this, a big budget reduction to force the issue?

Its a topical discussion, todays events at the Chilcott Inquiry and subsequent controversy over whether Gordon Brown (the then Chancellor) funded all military requests or not. Former senior officers and civil servants are lining up contradicting the Prime Ministers point of view, safe to voice their concerns now their pensions are firmly secured (can’t rock the boat when it might actually have done some good old boy) but do these individuals carry any responsibility or is it simply too easy and lazy to blame the Treasury under Gordon Brown for all the very real equipment shortages; soldiers going over the start line with 5 rounds of ammunition dressed in green and without body armour or desert combats.

£32 billion is not an unsubstantial amount of money and given the systemic problems with the MoD would an extra billion here or half a dozen billion there actually have made any difference or just perpetuated the current cake and arse party that is the Ministry of Defence equipment strategy.

In truth, no one knows, but what is certain is that those doing some of the shouting, maximising those pre election media opportunities, share the blame and no amount of money will ever be enough until we sort out some of the underlying problems.

Money for current operations and equipment supporting those operations aside, strong medicine might be the only way of driving real reform forward, not the shuffling of deck chairs style MoD reform we have become used to.

This Blueprint sets out the future operating model for DE&S in line with the direction set out by our Business Strategy. It describes how the organisation will ‘look’ and ‘feel’ by or during 2012. It represents an aspirational goal for the organisation to achieve over the next few years.

The Defence Equipment and Support (DE&S) Business Strategy 2008-12 sets out the strategic direction for DE&S, its’ Main Board’s priorities over 2008-12 and explains the areas where the Board will drive particular development. The DE&S Business Strategy and DE&S Blueprint are designed to be read together.

Download both from here

Blueprint

Business Strategy 2008-12

Aviation News International is reporting that the deal will see a reduction in quantities but no reduction in order value. So although EADS looks like it is going to be allowed to renege on a fixed price contract it doesn’t like by that much.

AIN are reporting the RAF will receive not less than 22 instead of 25, or roughly a 12% increase although the costs for the RAF version is different because of a strengthened floor to accommodate the Terrier combat engineering vehicle and the final number of aircraft to be installed with full DAS has not been finalised (although it is inconceivable that any RAF aircraft will now come into service without a full DAS)

As we predicted in an earlier post the RAF is also pushing for a fixed price (don’t laugh) for the first 5 years worth of servicing.

Given the rapidly deteriorating state of the nations finances, regardless of right or wrong, regardless of it being more worthy of cash than the welfare or the overseas aid budget and regardless of any other considerations it looks like the MoD is going to be invited to take a substantial cut in its budget.

We already know that it has a £6 billion hole to fill and the next few years are going to be even more difficult.

Pensions, wages, welfare, equipment, units, ceremonial duties; there is nothing sacred. The scope for salami slicing, a little bit here and a little bit there have long since departed, big cuts are needed.

Open question…

If it was your job of achieving a 25% saving off the budget for the next 3 or 4 years where would you start looking?

Towards the end of 2004 the MoD awarded a contract to EDS for the implementation of an intranet based pay and personnel administration system.

EDS were to implement a Joint Personnel Administration (JPA) system for Armed Forces Personnel Administration Agency which was supposed to deliver £600 million savings to the MoD over 10 years with the contract due to end in November 2009

JPA represented a key element of the MoD’s Defence Change Programme and, as a flagship project, was cited as a benchmark for future relationships between government and the IT supplier community.

Commenting on the contract award, Graham Lay, Managing Director of EDS Defence, said:

“The relationship between AFPAA and EDS on JPA marks a turning point in the way suppliers and government work together to achieve the maximum benefit from partnering with each other.

“EDS will significantly improve the ongoing service delivery cost within the new service structure, and has guaranteed this cost saving in the agreement signed today.

“In almost every respect, this is a radical departure from the traditional supplier-customer relationship. In terms of teaming, financial gain share arrangements and delivering an agile government model this partnership sets a benchmark for the future.

“This contract is consistent with the core recommendations of the Gershon Review and provides a template for how suppliers and Government Departments can work together to meet the challenges set out in the Review. We expect this to be the first in a line of similar arrangements paving the way for more productive and harmonious relationships between the government and supplier communities.”

Lieutenant General Anthony Palmer, Deputy Chief of Defence Staff (Personnel) said:

“Today we are taking a major step towards modernising the way in which we deliver pay and personnel services to the Armed Forces. We look forward to continuing the successful working relationship which has been developed with EDS over the last few years..”

A year before, the Inland Revenue had removed EDS and replaced them with another provider but the MoD thought its revised ‘partnering’ arrangements would mean they would be successful where the Inland Revenue were not. Up to this point EDS had managed to win nearly 60% of outsourcing contracts by value but this was a significant blow.

JPA was revolutionary because it shifted the traditional role of ‘pay clerks’ onto the individual serviceman or woman, in the brave new world each unit would be provided with JPA terminals and individuals would manage their own pay, expenses, leave and other HR type issues. It was also to provide statistical reports and returns to the MoD.

Towards the end of 2007 it was being rolled out to Army personnel having already been completed for the RAF and RN starting in 2006.

Any IT project, especially one that is designed to force such a radical change, is going to experience teething problems but almost from the start JPA was having more than its fair share of problems.

Despite this it was incredibly nominated for a Public Sector IT Award in the prestigious Computing Magazine Awards for Excellence 2007

As soon as service personnel were alerted to this rather bizarre (from their perspective) nomination they started commenting on the Computing Magazine web site. The journalists of course started to sniff an interesting story, government incompetence in IT is almost as common a story as ‘leaf falls from tree’ but this one had an additional angle; soldiers, sailors and airmen were serving in Iraq, equipment shortage stories were commonplace and the usual revolving doors between the MoD and industry were revolving as fast as ever.

Here are a few choice comments from the 37 pages of comments on the nomination site;

The system has put us back about 15 years. It takes ages to do a simple posting, and it is virtually impossible to trawl for personnel with particular experience or qualifications. It is not fit for purpose and has just made life 20 times harder.

Please dear God let my eyes be deceiving me! I cannot believe that JPA has received nominations for these awards

If 3 degree level educated officers can’t work the system out what chance have the poor infantry men have?

I wholeheartedly concur with every single negative comment thus far…..Indeed to even see this system nominated for an award is an insult of biblical proportions. The system is complicated beyond reason, ineffective in most areas and fraught with design faults.

You cannot possibly give an award to this appalling system

Ill considered and launched well before it was ready, it was a disaster from the start.

The innovative training package was no different from other on line training except that it failed to address 98% of the system capabilities and the interface was geared for a 5 year old child.

We are continually informed that this dreadful system is wonderful……It is an unmitigated disaster. It is useless as a management tool. It has failed me and many of my soldiers. It is not acceptable. What is really sad, is that some service personnel and MOD civilians will receive Honours for inflicting this useless system on us.

What an absolute joke, JPA is by far and away the worst HR Admin tool ever. Pay is constantly wrong and individual leave balances are rarely correct.

These comments lit the blue touch paper but of course in the land of the fairies, all was well.

The Annual Report and Accounts 2006/2007 published by the Armed Forces Personnel Administration Agency reported;

The success of the project, notwithstanding the early teething problems, is due to the tremendous dedication and hard work of both MoD and EDS personnel and the way in which they have applied the Partnering Principles of teamwork, innovation and continuous improvement.

Not surprisingly, JPA did not win!

Our old favourite ‘lessons have been learned’ made its regular appearance.

EDS (recently taken over by Hewlett Packard) in this 1^st October 2007 article were singing the praises of, well, itself.

There are also some remarkable examples if you look outside the United States. For example, EDS recently implemented the Joint Personnel Administration (JPA) system for the UK Armed Forces Personnel Administration Agency (now known as the Service Personnel and Veterans Agency).

JPA is an innovative, envelope-pushing application modernization program that makes comprehensive use of Oracle Suite functionality. The program has enabled a world-class business transformation in the way that the Ministry of Defence (MOD) provides pay, pension, and personnel administration services to the UK Armed Forces. JPA has allowed the ministry to harmonize and rationalize pay and allowances across all three services; supports remote secure system access whether on land, at sea, or on operational duties worldwide; and provides self-service access for more than 300,000 users to view pay slips, change personal details, and submit on-line expenses and leave requests. JPA also supports a one-stop Enquiry Centre that handles 20,000 calls a week.

As you’d expect, the benefits for the MOD have been significant. Less administration is required to deliver an improved service; information needs to be entered only once, reducing errors and saving time; management reporting has been improved; and the time to introduce new policy or legislative changes has been reduced.

The business benefits from JPA to the MOD started to flow almost immediately. In its first full year of operation, the program is expected to deliver overall savings of £100 million, which is being redirected to operations.

Computing magazine published a number of rather different stories in the same month;

http://www.computing.co.uk/computing/analysis/2201914/jpa-teething-trouble-causes
http://www.computing.co.uk/computing/news/2201804/armed-forces-face-pay-crisis-3591313
http://www.computing.co.uk/computing/analysis/2201980/never-learn-past-failures-3591600

Things got worse before they improved but they did improve and the public face of JPA went away as issues were gradually resolved, despite a very public legal case brought by an RAF Officer.

Kicking off the very public airing of dirty linen this year was a report from the Commons Defence Select Committee on the MoD’s Annual Report and Accounts 2008-2009. Published on the 18^th of March it commented on the fact that the Comptroller and Auditor General (head of the National Audit Office) qualified the MoD’s Resource Account because of issues with JPA.

Listing a number of failing and weaknesses it laid the blame firmly at the door of JPA. In a very forthright series of comments it went on to say;

It is difficult to exaggerate the magnitude of the failure of the Joint Personnel Administration programme. At a time when the Department is seeking, in many cases successfully, to deal with areas of dissatisfaction in service personnel life, this failure, which affects pay, entitlements and service records, is unacceptable

In developing JPA, the MoD placed insufficient emphasis on financial reporting requirements or the requirements for management information. A system was put in place, presumably with the approval of the Department’s Finance Officer, that provided insufficient evidence of payments and which could have such adverse impacts upon Departmental Accounts. We consider this to be a basic and fundamental error which is unacceptable on a project of this scale and importance.

It remains unclear whether the ability of the MoD to recover such a small proportion of the monies it paid out to EDS for JPA reflects the nature of the contract, a just assessment of the proportion of responsibility for JPA’s weaknesses or both. The decision to implement the JPA programme through an existing contract, which was clearly insufficient to deal with problems that might arise, was short sighted. The lack of clarity in the design in the system at the outset has led significant costs being incurred by the Department which ought to have been entirely avoidable.

Bringing the story up to date, it has been reported that the MoD is considering writing off a large proportion of the £268million worth of errors identified by the National Audit Office. It is anticipated that about half of this figure will be written off. In all fairness to the MoD, the figures are estimates and may well be less.

Still, even that is over £130million

Or,

Roughly the same amount as the recently announced contract for an additional 1,300 Javelin missiles.

Are things getting better, well they could hardly be getting any worse but no doubt progress is being made, let’s all retire for tea, medals, non executive directorships and MBE’s.

Maybe not.

DII(F) the network infrastructure over which JPA runs is being loaded with more applications and to quote the NAO “without the necessary associated development of IT capacity”

The application is due to be moved onto Oracle Fusion as support for the existing system is due to end sometime after 2012, once Oracle has completed its product switch to Fusion. A decision to upgrade to Fusion will need to be taken by mid-2010, but no information is available on how a switch to Fusion would be funded and managed, said the NAO.

Watch this space.

The general thrust of the story is usually that lazy pencil pushing Sir Humphries are feathering their nest whilst hard pressed squaddies have to buy their own ammunition.

The opposition will lazily follow the press position and spout how it is outrageous, just wait till they get into power, we will show them etc etc.

The blogosphere will chip in as well, usually with a few cracking sweary posts.

Then what usually follows is a half baked rebuttal from the MoD and assorted government ministers, but the damage will have already been done and nothing will change the perception that the MoD couldn’t find its corporate arse with both hands.

This is the standard of considered debate in the press these days, both the mainstream media and opposition have a shockingly poor grasp of the reality.

The MoD revealed, in an answer to a parliamentary question from Liam Fox MP (Shadow Secretary of State for Defence,) that it had awarded just over £42 million pounds in bonus payments to civil servants in the seven months from April to October this year with another 5 months to go until year end.

This was reported by all the press and media outlets, each competing with each other to show how disgusted they and the general public were, quoting opposition politicians, ‘defence sources’ and dead or wounded servicemen’s family members.

“Absolutely disgusting”

“What exactly have they done to earn that? How do they justify it?”

“I find it ludicrous”

“It makes me angry that they are being paid £47 million to pat themselves on the backs”

“Obscene”

“Money for old rope”

Liam Fox, commenting on the figures said “At a time when the department is reeling from the Nimrod report and Gray report, many of those in the Armed Forces will be aghast that bonuses are being paid on the basis of outstanding performance, this will only increase the view that the armed forces and the MoD administration are hugely out of balance.”

2 days after it released the information to Liam Fox and in a reactive move the MoD issued a statement today defending the bonus payments and its civil service staff. The Public and Commercial Services Union weighed in worth a strong defence. In fact the PCS Union railed against waste in the MoD equipment programme (as if MoD civil servants have nothing to do with that) and even had a go at non deployable military numbers, many due to injuries received whilst on operations, whilst complaining about Liam Fox trying to drive a wedge between the uniform and civil service branches of the MoD, irony evidently not a strong point of the PCS.

Alan Johnson MP (Home Secretary) defended the MoD but confused operational allowances for civil service staff deploying to operational theatres with bonus payments, not the same thing Alan.

Finally, in a clear case of tail wagging dog, Gordon Brown promised to examine the issue.

Lazy thinking from the media and opposition, a desire to characterise the Government as criminally incompetent and a general ignorance all round contribute to the characterisation of the civil service as ‘pen pushers’ whilst our brave boys go wanting.

It is the widely held belief that people should be rewarded for excess effort and improved effect and there is nothing intrinsically bad about this. In order to apply this fairly and consistently across a large number of employees some performance management system must be used, leaving things to manager’s discretion leaves the system open to abuse. As usual with these things, the devil is in the detail so very expensive management and HR consultants would have devised a fiendishly complicated system.

In order to depress pensionable basic salary the bonus is seen as a top up rather than on top payment. Most of the Civil Service would rather a higher basic pay rather than having a bonus payment, of course they would and the vast majority of payments were quite modest anyway.

The MoD stated that bonus payments don’t affect equipment budgets, which is a ridiculous statement and one borne of a culture of having budgets set in stone, of course it all comes from the overall MoD budget.

The Real Issues

Besides the woeful level of reporting and debate we think the real issues are as follows;

1. There is a widespread ignorance of what civil servants actually do in the MoD and the benefit, both operational and financial, that they deliver. The MoD needs to make a much better case for its employees rather than relying on the same old clichés, many of them are ex service personnel or reserves and the vast majority are in non administrative roles.

2. The MoD public relations unit needs to focus on being proactive rather than reactive, it took 2 days to come out with a half baked rebuttal . In every single case of note in recent times the MoD has seemingly gone out of its way to seek out banana skins.

3. The fundamental problem with performance related pay and performance management systems is that, unlike in the public sector where profit is a simple and easily measured target, the public sector cannot create a simple metric for success on which to reward performance. This leads to ever more creative means of measuring anything other than real world performance. Bonus becomes an integral part of the remuneration package and a massive amount of effort is expended on meeting these artificial targets.

Much activity is process based so scope for meaningful improvement is limited and this leads to yet more nonsensical means of measuring improvement.

In light of the Gray report on acquisition and the Haddon-Cave report on air safety and the Nimrod crash which clearly paint a picture of a dysfunctional department the notion that performance is good enough to pay bonus payments is alien to most.

Activity at all levels becomes focussed on targets rather than effectiveness and this has been observed across all areas of the public sector.

So not only is it massively divisive, it absorbs huge effort in administration and more importantly diverts the activity of the MoD towards meeting targets not achieving meaningful outputs.

It simply needs scrapping and replacing with a very limited discretionary scheme or one that can be linked clearly to cost savings or combat effectiveness.

4. That the MoD can even think of paying bonus payments when it can’t find £20million for TA training speaks volumes about priority setting, decision making and the inherent inflexibility of departmental budgets.

5. The media, Government Ministers, unions and everyone else concerned need to try and educate themselves before spouting their usual drivel.

6. Liam Fox needs to improve his performance immeasurably because it is likely he will be the next Secretary of State for Defence, this is an important position and one in which he will need to demonstrate he can harness the military and civil service for maximum effect in Afghanistan and the forthcoming strategic security and defence review. If he assumes that bashing the civil service will endear him to the military then he is very much mistaken.

Change the record Liam and start acting like a future minister

In its reply, the MoD states that it is considering ways to reduce spending on the MoD Police to allow resources to be focused on the front line. In its closing remark, the MoD also state that security of nuclear locations will never be compromised.

In our previous post on the MoD Civil Service, we stated that the MoD Police and Guarding Agency has approximately 7,700 staff, or 11% of our notional civil service figure, but is it the full picture?

Policing in the military is fragmented, many organisations, services and agencies make up the overall picture.

Military

At the basic level you will find soldiers doing their familiar guard duty or stagging on. This happens in the UK and overseas by all units. Small teams of Regimental Police provide the next layer up, responsible for good order and discipline but without many of the powers of the Royal Military Police.

The Provost Branch of Adjutants General’s Corps comprises about 4,300 regular and territorial personnel and is split between the Royal Military Police (the Redcaps), Military Provost Staff and the Military Provost Guard Service.

The RMP provide Close Protection and have an investigative role, this being covered by the Special Investigation Branch or more commonly, the SIB. The RMP also have many roles when deployed into an operational theatre but do not charge offenders as this is dealt with by the Army Legal Service.

Military Provost Staff specialise in custody and detention and man the Military Corrective Training Centre in Colchester, in addition to deploying as necessary.

Military Provost Guard Service is the third component of the Provost Branch of the AGC and provide guarding, access control and dog handling services on sites where soldiers normally live and work, replacing civilian staff and trained soldiers that would be more efficiently deployed on other duties. Although not regular soldiers in the traditional sense, members of the MPGS enlist on a Military Local Service Engagement, they must have served in some capacity in the armed forces and form part of the Army’s establishment.

Carrying out a similar role to the RMP, the RAF Police comprise regular and reserve personnel. The RAF Regiment provides a force protection capability and a number of other specialist functions.

Known as Regulators, the Royal Navy Police perform a similar role to the RMP and RAF Police and in addition, the Shore Patrol has a similar function to Regimental Police staff in the Army.

Responsible for the training of all service police the Tri Service Defence College also houses a number of specialist functions and completes the military policing function.

Civilian

The MoD Police and Guarding Agency is a result of a merger between the MoD Police and the MoD Guard Agency.

A civilian police force for the MoD, the MoD Police comprises around 3,500 personnel. All officers are firearms trained and roles include armed security, uniformed policing, crime investigation and policy development. The MoD Police also guard critical installations, large onshore gas pumping stations for example.

Comprising just over 4,000 personnel the MoD Guarding Agency carries out a guarding function at MoD sites.

The Sovereign Base Area Police Service covers policing duties for the Cyprus SBA.

Do We Have Enough Police?

As can be seen from the above, the roles of the various agencies and services overlap, of course each has a number of highly specialist roles. Each one will also have its own command staff, admin staff, photocopiers, computers and office chairs.

Is there too much duplication?

Is there room for consolidation and rationalisation?

Perhaps so.

What concerns us is that instead of looking at consolidation and removing expensive duplication we will simply cut posts and back fill them with soldiers/airman/sailors, endless hours of ‘stagging on’ might have been OK in the large conscript force of the fifties but with numbers at an all time low it is simply not acceptable today.

The DIS was widely regarded as a success

mmm, perhaps by the people that wrote it, perhaps by BAe but not by the taxpayer and certainly not by anyone feeling the harsh wind of budgetary restraint in the armed forces, which would be everyone.

Quite apart from the MoD trying to appear trendy by hijacking the 2.0 theme from the web 2.0 the page in question sets out three themes, in no doubt the most expensively obtained management speak.

Speed through decisiveness – by placing a premium on agility and ensuring rigorous prioritisation, greater standardisation and a clarity of processes; captured in our target of a 50% reduction in the acquisition cycle;

Closer and more demanding industry relationships - by being up front with industry about our requirements, by recognising the economic reality of the defence industry, and by working in partnership with industry to deliver to the front line; and,

Breaking down barriers to innovation – by encouraging entrepreneurship throughout our supply network, by maintaining our technology edge, and by harnessing innovation wherever we find it

All fine words but the MoD, the authors of the DIS, is presiding over a series of major equipment programmes, all of which are late and all of which are over budget to the tune of several billion pounds and that is before we take into account the massaging of figures and reductions in numbers/capabilities in order to reduce costs.

These starve the armed forces of funding at a time when funding is scarce and likely to get even scarcer.

Reading the document, one cannot help be impressed, we should be world leaders in buying, sustaining and disposing of military equipment, but we very clearly are not. No Strategic Partnering Arrangements, transformation or paradigm shifts can change that.

Can we relate our DIS with this shockingly poor performance, now that is an interesting question?

The oft quoted Blackhawk helicopter is a typical example of where people put two and two together and get twelve; thinking that buying off the shelf is the answer.

Sometimes it is, sometimes it isn’t.

The problems with the UK defence market are as follows

• There is only one customer
• That customer has a range of budgetary, competence and other issues (the MoD is certainly not the last word in procurement/acquisition)
• We have artificial market influences in the form of requirements to have UK sovereign design, manufacture and support capabilities across a number functional areas
• To gain or maintain a military advantage equipments must often push the boundaries of technology

We are not alone either, in fact no country in the world who has a defence industry and serious strategic position has found the answer. We fool ourselves in a big way if we think that everything with a Made in the USA badge is either cheap or good. Quite often they are neither.

The net result of the strategy is an effective monopoly and enterprise will react to that, they have a fiduciary responsibility to their shareholders to drive profitability through everything they do, so you can’t you blame them for making a profit at Tommy’s expense. BAe isn’t a charity, it isn’t the soldier’s friend, it isn’t patriotic force for good; it is a business, pure and simple.

A dominant supplier will seek to strengthen its position, BAe have purchased the last remaining VT shipbuilding interests in the UK so we are now in a position where we only have one supplier of warships to the MoD. BAe have reinforced their dominant position and there is nothing the MoD can do about it.

In a market where suppliers are consolidating choice becomes very difficult to achieve, looking at the Defence Analytical Services and Advice website the number of private sector organisations that the MoD paid more than £50million is a grand total of 48 and that number includes the phone, gas and fuel bills.

If non military suppliers are removed it comes down considerably, less than 25.

This is a graphic from the DIS itself showing how a few suppliers dominate the MoD’s purchasing.

MoD Top 10 Suppliers

Ah, but what about British jobs for British workers and our defence export successes

After DIS was published BAe aired a veiled threat to take their manufacturing and design capabilities outside the UK should strategy not be published, a strategy that more or less confirmed their dominant position.

The MoD has clearly been bent over the desk and given a very big lesson in power.

What is it that drives this monopoly?

The DIS describes the areas in which the goal is the retention of sovereign capabilities and these are wide ranging, everything from high level crytography to complex munitions to submarines.

Whilst the UK defence industry might export a lot, the UK is one of the world’s biggest arms suppliers if you take out those UK subsidiary companies that are not based in the UK the figures reveal a different picture.

Taking a look at the last 20 years of major projects very few of them has been an export success although the technology might have contributed to others that have, granted, but you cant ignore the fact that the vast majority of the arms buying nations of the world haven’t bought what we are selling, unless they are part of the manufacturing consortium or the deal is part of a wider trade agreement.

The conventional argument states that in order to achieve the best, there must be competition. It’s hard not to have some sympathy with this argument, it is what has resulted in flat screen TV’s that cost less to make than the disposal costs of an old CRT one.

Competition does result in a better outcome for the buyer, the lack of competition means we would all be driving around in Model T’s

But is the defence of the realm the same as the market for TV’s or cars though?

The MoD and Defence industry would argue not, of course they would do, wouldn’t they!

If we do ditch the DIS and just simply buy the best/cheapest on the market we will no doubt achieve better value for money in the short to medium term but long term, our inability to generate our own means of defence will have serious strategic and industrial consequences which might put the cost savings into the shade by a long way.

Perhaps a scaling back of the list of things we must be able to manufacture ourselves, perhaps a better approach to acquisition or perhaps something more radical.

Or do we simply accept that if we want to maintain the means of our own defence we have to accept some financial pain.

I don’t know the answer to the question, in truth I don’t think anyone does.

The Telegraph and other newspapers recently reported off the back of a speech by Dr Liam Fox (Conservative Shadow Defence Minister) that there are two troops for every civil servant and when compared with the 27 NATO nations the UK has a disproportionate number of civil servants.

Liam Fox stated

“We can’t afford to carry the burden of a bloated administration at a time when troops on the front line face shortages. We cannot have a situation where the Armed Forces are at war, but Whitehall is not.”

“How can it be that while we have a navy of only 34,000 we have almost 24,000 people working in procurement alone?”

“It is time for the MoD to get its house in order”

The MoD responded…

“The civilian workforce of the MOD provides vital support for the Armed Forces on the front line and many of their skills are not available within the Services.

“The 85,730 staff includes intelligence analysts, MOD police officers and scientists and engineers developing equipment to protect our forces. Many of them have deployed to Iraq or Afghanistan in key roles.

“We have taken steps to reduce the civilian workforce wherever we can do so without putting troops at risk, and the total number of civil servants has fallen by 23,000 since 2005.”

“These are not just men and women sitting behind desks. We are talking about the thousands of scientists who design protective equipment such as body armour or research antidotes for troops under biological attack, not to mention the MoD police force or Britain’s Merchant Navy — the Royal Fleet Auxiliary”

Adding to the general atmosphere was Nick Clegg who confidently predicted he would, in government, slash 10,000 jobs from the MoD.

Who is right?

In order to get a insight into whether the MoD is chock full of civilians shining their arses on Herman Miller Aeron chairs (RRP £1,000 each although the MoD will have paid much less but strangely was circumspect about saying exactly how much less) or hard working staff with a frontline first ethos, striving to support ongoing high tempo operations, some understanding of the structure of the MoD is required.

The MoD is a complex organisation and the figure of 87,500 staff does not reveal the full picture because of where reporting boundaries lie.

The MoD is divided into a number of areas;

Inside the reporting boundary

TOP LEVEL BUDGETS

There are 8 Top Level Budgets

Navy Command
Land Forces
Air Command
Chief of Joint Operations
Defence Equipment and Support
Central
Defence Estates
Science Innovation and Technology

ON VOTE AGENCIES

There are 6 on vote agencies that fall within the TLB’s

Defence Equipment and Support TLB, including the Defence Storage and Distribution Agency

Central TLB, including the Defence Vetting Agency, MOD Police and Guarding Agency, People, Pay and Pensions Agency and the Service Personnel and Veterans Agency

Land Command TLB, including Service Children’s Education

External to the reporting boundary

TRADING FUNDS

Outside of the MoD reporting boundary are the so called Trading Funds, there are 4 trading funds;

UK Hydrographic Office, profit £12.9m
Met Office, profit £7m
Defence Support Group, profit £9.4m
Defence Science and Technology Laboratory, loss £2.1m

Trading funds are funded by ‘selling’ their services to the MoD, other government departments and enterprise.

PUBLIC CORPORATIONS

The Oil and Pipelines Agency, NAAFI, and Fleet Air Arm Museum are public corporations and fall outside of the reporting boundary.

ADVISORY NON DEPARTMENTAL PUBLIC BODIES

The Royal Marines Museum, Royal Naval Museum, Royal Navy Submarine Museum, National Army Museum and Royal Air Force Museum fall outside of the reporting boundary.

According to the MoD Annual Report, in 2009, the annual civil service compliment was 78,543 full time and temporary staff compared to 192,270 service personnel, calculated on an average basis. Defence Analytics Services and Advice publishes comprehensive statistics and as at April 1, 2009 the total civilian workforce was 86,600 compared to 194,700 service personnel.

DASA defines two categories of civilian employee, Level 1 and Level 0 and at the risk of repetition, it is important to understand the difference.

Level 0, contains all those at Level 1 plus Trading Funds and Locally Engaged Civilians. This will be used for external reporting, including National Statistics publications CPS1 and UKDS, and Parliamentary Business

Level 1, Permanent and casual civilian personnel and Royal Fleet Auxiliaries, but excludes Trading Funds and Locally Engaged Civilians. This will generally be used for MOD internal reporting and planning

Are you confused yet?

Level 0, the 86,600 figure, contains 9,600 people in the trading funds and 10,500 locally employed civilians outside of the UK that support the armed forces. Although the MoD pays for the services of trading funds it could be argued that the figures might be excluded from the argument, especially for the UK Hydrographic Office and the Met Office where external revenue is a significant proportion of earnings. The other two trading funds, DSG and DSTL, are largely dependent on the MoD so for the sake of argument I will include the 3,350 and 3,470 of these.

I also think it reasonable to exclude the locally employed overseas employees so taking Level 1 + DSTL + DSG leaves us with a rough working figure of, 73,220 that I will use for comparison.

Taking DASA information, the TLB’s and TF’s can be summarised in tabular format.

Beyond the Numbers

Looking closer at the claims and counter claims…

MoD – MoD Police Officer, 7,660 people or 10% of our notional total

MoD – Scientists, 3,870 people, or 5% of our notional total

MoD – Royal Fleet Auxiliary, 2,300 people or 3% of our notional total

Liam Fox – 24,000 working in procurement alone, 16,700 people or 23% of our notional total

The MoD has long pursued a policy of civilianisation because if you can get a civilian to stack blankets (be a storeman) or stag on (stand guard on a gate) it will be a lot cheaper than having a trained soldier doing the job. This makes sense but can go too far, leaving the uniformed branch too lean and unable to absorb attrition losses or have a degree of flexibility.

This policy will therefore inflate the civilian totals.

However, the MoD has also pursued a policy of contractorisation, outsourcing where possible and whilst this will reduce the head count it means the costs often remain or even get higher. There are many stories of MoD employees leaving on a Friday and turning up on the Monday, doing the same job and even in the same seat, yet employed by a contractor and charged back to the MoD at a thousand pounds per day.

The numerous PFI deals also serve to reduce headcount but add to costs.

Other nations have yet to take this approach, civilianisation then outsourcing.

Once again, sound bite politics produces ridiculous and ill thought out arguments that pander to the lowest common denominator.

Simply slashing the civil service is not the answer.

There is no doubt that the MoD is over staffed with civilians in some areas but others are woefully short of quality staff so we need less of the types we don’t need and more of the types we do. It might also be argued that the military branch is also over manned in HQ and other areas.

A security and defence review should look into all aspects of civilian and military manning, especially how it supports the generation and support of operations and if this means increases in some areas then political considerations and ‘how it might look in the papers’ should be totally disregarded.

The ongoing overhead of performance monitoring and managing outsource and PFI arrangements should also be closely examined.

A heavily unionised MoD civilian staff must be constantly challenged to accept their role in supporting the uniformed branch in its operational activity,

‘how does this activity support operations’

The MoD must also make a better case for its civilian workforce.