21 May 12. Defence Committee. Select Committee Report. MINISTRY OF DEFENCE SUPPLEMENTARY ESTIMATE 2011–12. The Defence Committee today publishes its Report on the Ministry of Defence Supplementary Estimate 2011–12. The Committee notes that the MoD requested an additional 8.6 per cent for operations from the Treasury bringing the total additional expenditure on Afghanistan, Libya and the Wider Gulf to some £4.5bn with the additional cost for Libya being some £24m. The implementation of the Strategic Defence and Security Review (SDSR) has resulted in further write-offs of assets. The MoD requested an additional £2 billion (non-cash resource) to cover these write-offs and other write-offs and impairments resulting from work to improve its data on stock and other assets. The Committee believes that the MoD should by now have a greater understanding of the financial implications of the SDSR. The Supplementary Estimate for 2011–12 were laid before Parliament on 8 February 2012 and the House was asked to approve them on 28 February 2012. Chair of the Defence Committee, Rt Hon James Arbuthnot MP, says “It is unreasonable to expect Select Committees and Parliament to scrutinise the Supplementary Estimates in less than three weeks. We have asked the Treasury and other Government Departments to devise a better timetable allowing greater time for Parliamentary scrutiny.”
23 May 12. Committee of Public Accounts, 88th PAC Report 2010-2012.
Managing change in the defence workforce, Chair: The Rt Hon Margaret Hodge. The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, said, “The Ministry of Defence has gone ahead with cuts to its military and civilian workforce without a proper understanding of what skills it will need in the future. We recognise that the MOD must make tough financial decisions if it is to reduce its spending by 7.5 per cent a year by 2015, and that it has acted decisively. But we are concerned that these cuts have been determined by the need to cut costs in the short term rather than by considering the MOD’s strategic objectives in the long term and the skills it will need to deliver them successfully. If the Department loses key skills, it may have to spend even more money on replacing them, perhaps by buying them in from external consultants. Spending on consultants is already soaring, from £6m in 2006-07 to £270m in 2010-11. This would not represent value for money.
“We welcome the Department’s candour about how these cuts are affecting staff morale. That morale is low when jobs are threatened is unsurprising, but it is encouraging to see the Department take active steps to improve the way it communicates with its staff on the need for change.”
Margaret Hodge was speaking as the Committee published its 88th Report of this Session which, on the basis of evidence from the Ministry of Defence, examined the Department’s plans for reducing its workforce.
The Ministry of Defence announced in the summer of 2010 that it had a funding gap of £38bn over the next ten years. As part of the Government’s efforts to reduce the deficit, the Department also needs to reduce its annual spending by 7.5% in real terms by 2015. It intends to achieve a significant proportion of its required savings by reducing its civilian personnel by 29,000 and its military personnel by 25,000, which it estimates will save £4.1bn between 2011 and 2015. In October 2010 the Government published the Strategic Defence and Security Review which set out its future priorities and plans in the context of the need to balance its budget. The Department is currently enacting a transformation programme to change its way of working in order to deliver on these priorities with fewer staff. The Department has acted decisively to put plans in place to implement reductions in its workforce. However, it has done this before it has finalised its new operating model. The operating model will set out the detail of how the Department will meet its object