By Richard Johnstone | 25 May 2012
The Ministry of Defence is cutting staff numbers before it has a ‘proper understanding of what skills it will need in the future’, the Public Accounts Committee has warned
Examining the department’s plans to reduce its civilian personnel by 29,000 and its military personnel by 25,000, the committee said it had ‘acted decisively’ to implement reductions. These form part of moves to close a £38bn funding gap in the department over the next ten years.
However, with the MoD currently changing its way of working to adapt to the priorities set out in the Strategic Defence Review, the MPs warn job cuts are taking place before reforms are finalised.
The October 2010 report included a new focus on conflict prevention. A new ‘operating model’ for the department should be agreed by next April, but the workforce reductions will be well advanced before this plan spells out the detail of how it will meet its objectives.
The MPs say they are ‘concerned’ that this has been driven by the need to cut costs quickly, creating the risk of new skills gaps developing. This may lead to an increase the department’s use of consultants, the Managing change in the defence workforce report added.
Committee chair Margaret Hodge said: ‘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.’
Although the department has to take ‘tough financial decisions’ to reduce spending by 7.5% a year by 2015, she added: ‘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.’
Defence minister Peter Luff said that the reduction in posts was a necessary response to the ‘MoD's financial black hole’.
He added: ‘We are now transforming defence to create a smaller, more efficient, professional Ministry of Defence that is back in balance.’
However, he said that ‘it is a serious distortion of the facts to say that expenditure on consultancy at the MoD has risen’, insisting that it has been reduced from £106m under the previous government to £26m in the last year.
The spending highlighted by the committee was the department’s Framework for Technical Support, which Luff said was not used for consultancy work.
‘All work commissioned under FATS is vital to the successful delivery and support of military equipment to our troops. This is often technical assistance for services the MoD cannot legally conduct in-house, such as independent airworthiness certification.’
