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MoD COMMITS TO £700 MILLION IN SAVINGS

24 Mar 10. Today’s U.K. budget confirms the commitment made at the 2009 Pre-Budget Report to further real terms increases in the defence budget in 2010-11.

The MOD has a strong record in recent years of generating efficiencies, ensuring more resources can be devoted to the front line. At the PBR, the Government announced that £11 billion further efficiency savings are being made across Government to ensure key services are protected, and the MOD would identify £700 million of efficiency savings. The savings form part of the Operational Efficiency Programme (OEP) and Putting the

Frontline First: Smarter Government.
The MOD is fully committed to the recommendations of the OEP and to the rest of the package of Smarter Government efficiencies. In December, the Secretary of State for Defence announced plans to reprioritise the budget to free up an additional £900 million on capabilities important to Afghanistan and also to future capability – including 22 new Chinook helicopters.
Current plans to deliver the £700m of efficiency savings include:
• £550m to be saved across the Department, including up to £120m from greater use of collaborative procurement on construction, food and IT as well as better management of the Defence estate, savings through greater efficiency in equipment support, and further prioritisation in the Strategic Defence Review;
• £130m of savings within the MOD through replacement of legacy IT systems;
• £30m to be saved by further reducing the use of external consultants and expenditure on marketing and communications, including significantly reducing the number of MOD publications. The MOD has already cut consultancy spending by 75 percent since 2002.
• The results of an independent review of Defence civil servant numbers, led by Gerry Grimstone, which is looking at the distribution of tasks between military and civilian personnel and the scope for further efficiencies. This is on top of the 40,000 reductions since 1997.

Savings may be significant

Findings from the report are expected in May 2010.
The scale of the savings to be made within the MOD should be seen within the context of an upcoming Strategic Defence Review.
The MOD is committed to delivering significant savings necessary and is making real progress through ambitious efficiency savings and value for money plans.

A|D|S Comment

A|D|S, the trade organisation representing the UK’s world-leading, high-technology, high-skilled AeroSpace, Defence and Security industries today (Wednesday) commented on the Chancellor of the Exchequer Alistair Darling’s Budget speech to the House of Commons.

Ian Godden, Chairman of A|D|S, said, “We welcome the Chancellor’s focus on recovering from recession and investing in our industrial future, especially his focus on encouraging exports, supporting trade and discouraging protectionism as well as his warm words for advanced manufacturing, especially aerospace. His recognition that economic growth is the key to our recovery and reducing borrowing is encouraging and the sectors that we represent can deliver the goods in this regard.

“The British aerospace, defence and security sectors are number one in Europe and second only to the US globally. They can deliver on the Chancellor’s aim to generate long-term prosperity for Britain. There is considerable room for growth in the export markets for these successful sectors that would contribute to the recovery from recession and deliver a sustainable industrial future with many additional jobs. For example a recent study by Oxford Economics has shown that an additional Government investment of £100m in defence would deliver an output of £227m. That investment would also bring about an estimated additional 1,885 jobs.

“We will shortly be publishing manifestos for each of the four world-leading sectors that we represent to demonstrate to the political parties in the run-up to the General Election what we can deliver for the cou

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