Thursday, 27 February 2020

The Equipment Plan 2019-2029

Earlier today I did a thread on Twitter pulling out extracts from the National Audit Office's (NAOs) report on the MoD's 2019-2029 equipment plan. Here I will attempt to condense that down into a more coherent set of thoughts.

Essentially the equipment plan is supposed to be the MoD's proof that it has a long term vision and a long term plan for managing its procurement of a wide range of military equipment. What the NAO report highlights is that for the third year running the MoD has neither of those things. On top of that, this review was in many ways far more damning than some of its previous reports. The NAO did not hold back in laying bare a myriad of problems that the MoD is facing in trying to keep its budgets under control.

Breaking the report down and going a bit deeper into it, it's clear that the MoD is facing three primary challenges as it walks seemingly blindly into the coming Integrated Defence Review later this year:

1) It lacks adequately qualified and experienced personnel in project management and cost estimating. 

2) The senior management at the MoD, both on the milltary and the civilian side, consistently fails to appreciate the scale of the problem and to offer credible leadership.

3) The government is consistently failing in its role of providing political decision making to the armed forces.

I'll try and break these three elements down as best I can.

1. It lacks adequately qualified and experienced personnel in project management and cost estimating. The NAO report was fairly blunt in its assessment that the MoD has failed to recruit an adequate number of staff with the necessary financial qualifications to manage and oversee the sorts of projects that the MoD is involved in.

Part of the rationale of hiving off Defence Equipment and Support (DE&S) to be an arms length body was that it would allow the MoD to recruit the sort of the people that it needed to manage its complex programs, something that was thought impossible otherwise due to the restraints imposed by civil service pay grades. 

Yet the evidence could not be any clearer; the MoD has mainfestly failed to recruit the people with the expertise it needs. Major shortfalls in the number of technically qualified staff have left the MoD with a serious deficiency in its ability to credibly assess the costs of its respective programs and to budget accordingly, including accounting for due risk in the programs in a way that would be considered good accounting practice.

Instead the MoD has attempted to bluff its way out of a hole, using cheap tricks and vague promises of efficiency savings to try and ward off the dogs. This is simply unacceptable. As much as people may dislike it, an organisation such as the MoD cannot realistically hope to function properly and manage such a wide range of highly complex programs without having adequate civilian support.

Admirals, Generals and Air Marshals - plus their associated staffs - are all very well for setting priorities, giving their service input, and providing oversight, but these are not management specialists. And no, just because they commanded a ship, or a headquarters, or a battalion in Afghanistan, that is not comparable experience to running a major equipment program. This is a specialist set of skills, none of which are taught at Sandhurst, Cranwell, or Dartmouth. This is not something you can learn in two years. 

If the MoD is ever going to dig itself out of this endless cycle of trimming, fudging and crossing its fingers in hope of a big payday sometime soon then it needs to treat complex procurement programs as something other than a CV boosting post for senior officers before they head out into the world of corporate management and sitting on boards (quite why any sane organisation would offer a senior management/oversight role to someone who has been a senior officer in the UK armed forces over the last 20 years is beyond me, unless you specifically need their personal network).

A little bit of money invested properly in this area, likely at the expense of a number of senior military posts, could go a very, very long way.

2. The senior management at the MoD, both on the milltary and the civilian side, consistently fails to appreciate the scale of the problem and to offer credible leadership. It has become very common, especially on UK defence Twitter, to bemoan a lack of hard choices being made at the MoD over what to fund and what to cut. It's common precisely because the MoD consistently fails to make these hard choices.

The MoD patently, as the NAO report lays bare, lives in its own world. Let's call it the Main Building Bubble. Senior officers and civil servants simply do not seem to appreciate the scale of what it is they're facing, and if they do then we can only surmise that they consistently opt to ignore it and its implications. 

Prioritising short term budget management at the expense of long term financial planning is a common refrain. It is clear that the 2019-2029 Equipment Plan follows this trend. This is unacceptable and demonstrates a clear lack of leadership on the part of senior MoD management to tackle the real problems facing the services. The endless cycle of delaying projects and trimming the fat at the very limits just to limp over the line this year at the expense of ruining future budget years is not sustainable and smacks of an unwillingness among senior MoD leaders to take responsibility and to make difficult choices.

This is a leadership issue, plain and simple. The majority of the long term problems with the MoD budget could likely be solved just by injecting a bit of reality into the budgeting process and with a candid assessment of current equipment and capability levels. But to do that requires defence leaders to actually lead, to take the reins and make themselves accountable for budgeting failures. Someone needs to step forward and take responsibility for saying "this cannot continue and here is how we're going solve this". Don't hold your breathe waiting though.

3. The government is consistently failing in its role of providing political decision making to the armed forces. Contrary to popular belief, ministers appointed to head government departments are not CEO's. There are perhaps a handful of people at best in the entire House of Commons who have the adequate experience and/or qualifications to be the CEO of a large organisation. In the private sector these people attract remuneration packages in the many millions, precisely because their skills and experience are quite rare and highly valued.

Government departments themselves could function rather happily without ministerial assistance, at least right up until the point that they required a choice to be made that was political in nature. That is what government ministers are for. That is the purpose they serve. It has little do with whether or not they are "across the detail", or though clearly that can help. Their job is not to run the department. Their job is to decide the broad political direction and policy of the department.

In this regard the MoD has been failed miserably for a great many years, stretching back over several governments of differing colours. But the past is the past, we cannot change it, we can only deal with the consequences it has left us. And the reality is that the current government is failing the armed forces, much like its predecessors have, in providing adequate political direction.

It is obvious that the MoD does not have enough money to manage its current committments. It is incumbent then upon ministers to make difficult political choices to help resolve the situation. This might be providing more money at a time when other departments are equally needy, or it might be approving cut backs in capability. Ultimately though ministers cannot simply wash their hands and absolve themselves of any blame in the matter.

They too can provide leadership, such as requiring the MoD to invest more money in skilled support staff, or by leading an internal departmental review into which capabilities and programs should be suspended or indeed terminated to make budgets align with reality. Simply fobbing off responsibility for all the problems onto the senior officers and civil servants is not acceptable. 

Though the NAO report fell short of specifically calling out politicians (while having a brief stab at Gavin Williamson), it is quite obvious that ministers share a degree of culpability alongside other senior figures in the MoD for the continuing failures that underpin MoD procurement and the ongoing troubles with each 10-year equipment plan.

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