MoD cutting staff ‘without predicting impact’
As a new report accuses the MoD of prioritising value for money and risking a military skills shortage, a defence expert tells Channel 4 News the impact of cost cutting “could be profound”.
Over 54,000 staff will lose their jobs at the MoD as part of the department’s attempts to make financial savings.
However a National Audit Office report found that the department is making cuts without having an understanding of how it will cope.
The Whitehall watchdog found that the urgent need to cut costs has dictated its redundancy programme, without anyone planning in advance how it will operate in the future.
This risks making the current skills shortages worse, it added.
The MoD is planning to cut its civilian workforce by 29,000 and its armed forces by 25,000, and has set up a redundancy programme and a voluntary early release Scheme.
While this is in accordance with good practice, the department reduced its headcount before planning how it will operate in the future, say the NAO.
This is upside-down change management and will almost certainly ensure that skills gaps will occur. The impact of this is less certain, but could be profound. Dr John Louth, Rusi
“The Ministry of Defence is in the difficult position of needing to maximize financial savings by cutting headcount before it has detailed plans for how it will operate in the future,” said Amyas Morse, head of the National Audit Office.
“A more targeted approach is needed to restructure the workforce and retain the skills that will be required in future.”
Cost cutting
The most recent MoD estimates are that the process will save around £3bn in total.
But potential savings depend on the timing of redundancies – a three month delay in the second round of military redundancies alone has reduced savings by an estimated £100m to £138m to 2015.
By 2015, the department has to reduce the army by a further 5,000 but there are so far, no detailed plans as to how this can be done.
The NAO also warned that a significant reduction of staff risks the current skills gap worsening.
Military recruitment in particular tends to bring in younger people, meaning the department will struggle to maintain the current skills levels, the NAO said.
“It has taken some steps to retain critical skills, but there is still a risk that some of the skills it needs now and in the future may be lost,” the report read.
Skills gap impact ‘could be profound’
John Louth, deputy head of a defence programme at the Royal United Services Industry (Rusi) told Channel 4 News the findings are “far from surprising”.
“The MoD has instigated significant reform to save money – necessarily perhaps – rather than to develop or maintain organisational and operational effectiveness,” said Dr Louth.
“In other words, the numbers to be released were decided before new processes and structures were considered. This is upside-down change management and will almost certainly ensure that skills gaps will occur. The impact of this is less certain, but could be profound.”
Shadow Defence Secretary Jim Murphy said that the drive for redundancies was “rushed and wrongheaded”.
“Real savings have to be made, including from personnel reductions in the military and civilian workforce, but they must fit within a clear plan of how the MoD will do more with less at home and overseas,” he said.
Defence Secretary Philip Hammond said the NAO had found the redundancy programme was working well and that compulsory redundancies would only be used as “a last resort”.
“Of course, the scale of the financial black hole in MoD’s budget that the coalition has inherited meant action was needed urgently. We recognise the risks the NAO identifies and are actively managing them,” he added.