The Performance Of The Ministry Of Defence 2009 10

The Ministry of Defence (MoD) is unaware of the location of radios worth £184 million, and is unable to provide evidence of the existence and condition of assets worth £6.3 billion. This shortfall in accounting is reflected in the decision by the National Audit Office to qualify the MoD accounts for the fourth successive year. The Committee thinks this year's qualification should have been foreseen, given that it was a clear requirement on all Government departments to adopt the relevant reporting standards from 2009-10. It is unsatisfactory that the MoD expects their stock control problems to continue for another two to four years. The report notes the period of intense change that the MoD is going through, and recommends that any cuts to staffing levels must be appropriate for future business need and managed with care. The Committee will study the outcomes of the report of the Defence Reform Unit (ISBN 9780108510663) to ensure that the MoD retains the right skills. This will need to be reflected in decisions on redundancies through voluntary exit and otherwise so that the Department is not left without the right skills and experience required for effective performance. The Committee wishes to be assured that decisions on the scrapping of assets before the end of their useful life have been made on the basis of a sound cost-benefit analysis, taking into account the savings to be achieved and the effect of the loss of capability.

The Ministry of Defence (MoD) must put into the public domain the full cost of military operations in Afghanistan. This report notes that although there are obvious standing expenses, the Afghan deployment brings with it additional costs in terms of training opportunities cancelled or deferred and equipment wear and tear that will eventually have to be met. The Committee is also disappointed by the Department's inability to provide the detailed information requested about expected write-offs such as Nimrod and the Type 22 Frigate. The MoD was not clear but the Committee deduce that some of the 2010-11 provision for depreciation and write-offs will be carried forward to 2011-12 or even later years. There is also concern that the voluntary redundancy programme has been over-subscribed and that applications (or even resignations) have been received from individuals who might have achieved high command and asks the MoD to show how it will ensure that the voluntary redundancy process does not impact on the future leadership capability and effectiveness of the Armed Services

Government response to HC 760, session 2010-12 (ISBN 9780215560414)

This report examines the administration, expenditure, activities and achievements of the MoD during the 2008-09 financial year, as detailed in the Ministry of Defence annual report and accounts 2008-09 (ISBN 9780102962239). It continues a series of inquiries and, indeed, the Committee sees it as cause for concern that the NAO found the need to qualify the MoD's resource accounts for the third consecutive year. Whilst it is acknowledged that capability in theatre must be the Department's first concern, failing to maintain accurate and full information on personnel and to keep track of assets has the potential to threaten the long-term capability of the Department, including operational capability.

This report notes mounting concern that UK Armed Forces may be falling below the minimum utility required to deliver the commitments that they are currently being tasked to carry out let alone the tasks they are likely to face between 2015 to 2020 when it is acknowledged that there will be capability gaps. The Committee is concerned that UK Armed Forces will be continually operating at the maximum level envisaged by the Defence Planning Assumptions. The Committee is not convinced that this aspiration can be achieved by co-operation with our allies given the challenges of aligning political with operational needs. The SDSR identified seven military tasks and the Defence Planning Assumptions that underpin them. However the Review fails to show how decisions such as those on the Aircraft Carriers and Nimrod MRA4 will lead to the Armed Forces being able to undertake those military tasks. The Committee has serious concerns over the realisation of what is called "Future Force 2020", the Government's intended shape of the Armed Forces from 2020, particularly as the provision of the necessary resources is only a Government aspiration, not Government policy. The MoD must reform, and ensure substantially improved transparency and control over, its finance and budgetary practices. When committing to undertake new operations the Government should state from the outset where that operation fits in the Defence Planning Assumptions and which of the military tasks it is meeting. The Committee is concerned that the Government seems to have postponed the sensible aspiration of bringing commitments and resources into line, in that it has taken on the new commitment of Libya while reducing the resources available to MoD.

Technologies such as GPS, vital to the financial markets as well as the military, are known to be vulnerable to the effects of space weather or the EMP resultant from a nuclear weapon exploded at altitude. It is also possible to build non-nuclear devices which can disrupt electronic systems, though so far only over a limited area. A severe space weather event is not necessarily seen as a military problem in the first instance, but it would be likely to meet the definition of an "emergency" under the Civil Contingencies Act 2004 and call for the help of the Armed Forces. The reactive posture described by the Government appears somewhat complacent. The Committee is very concerned that there appears to be no one Government Department identified to take immediate lead responsibility should there be a severe space weather event. The Government must make clear exactly where lead responsibility in relation to EMP disturbances lies both nationally and within the MoD. Defence alone cannot protect against the threat of EMP. It must be a concern of the National Security Council and civil contingency planners, with proper standards of protection developed with the vital service industries most at risk. The effects of a High Altitude Electro-Magnetic Pulse Event as a result of a nuclear weapon exploded at high altitude, would be so serious that only government action could be expected to mitigate it. Security of satellites is a matter of growing concern as our reliance upon such systems and the sheer number of satellites in orbit increase.

The Defence Committee believes that the Government will need to make some difficult decisions on prioritisation if it embarks on a future mission similar to the Libya operation now that the Strategic Defence and Security Review (SDSR) is taking effect. Although the UK was able to satisfy both operations in Libya and Afghanistan and its other standing tasks and commitments, the Libya operation was conducted before the implementation of many of the SDSR decisions on capability reductions. The Committee commends UK Armed Forces for their significant contribution to the successful conclusion of the Libya operation and comments on particular aspects and equipment used in the operation. It notes that at times the Royal Navy was unable to carry out several other important tasks owing to meeting the Libya commitment. Given the high levels of standing maritime commitments it is likely that this type of risk taking will occur more frequently as the outcomes of the SDSR are implemented. For the time being, there will continue to be a heavy reliance on US command and control functions for future NATO operations. The Committee also concerned that future NATO operations will not be possible if the US is not willing or able to provide capabilities such as unmanned aerial vehicles, intelligence and refuelling aircraft. It should be a priority for NATO to examine this over-reliance on US capabilities and assets. This challenge will be heightened by the US stated intention to shift its military, geographic and strategic focus to the Asia-Pacific region.

The ability of the Defence Equipment and Support organisation within the Ministry of Defence (MoD) to deliver the equipment programme is overshadowed by the existence of a funding gap which the NAO estimates could be as much as £36 billion over the next ten years. Both the National Audit Office "Major Projects Report 2009" (HC 85-I, session 2009-10, ISBN 9780102963342) and Bernard Gray's "Review of Acquisition" for the MoD have confirmed that the MoD's ten year equipment programme is unaffordable. Furthermore the MoD's practice of delaying projects so as to reduce costs in the early years of a programme is adding to overall procurement costs and so further increases the funding gap. The MoD has apparently made no attempt to calculate the full extent of the costs of delays and it has taken decisions to delay projects without understanding the full implications of those decisions. The report examines: progress on the many key programmes; defence research spending (declining from £540 million in 2007-08 to £471 million in 2009-10 and will decrease further in 2010-11 to £439 million); the response to and implementation of the Gray report; balancing the equipment programme and the use of regular Strategic Defence Reviews to maintain an up-to-date strategic context for the equipment programme; clarifying roles and accountabilities, including better leadership and decision-making; injecting key skills and tools into DE&S.