MoD & Bernard Gray report. Interesting reading.

Discussion in 'Current Affairs' started by alacrity174, Aug 7, 2009.

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  1. Well not that I'm at all shocked, but it seems Bernard Grays report is painting the MoD as exactly what the average man in the street thought, without spending all that money.

    MoD in denial
    MoD late in admitting there is a problem
    Smart Aquisition has made no difference
    Approvals process need to be changed
    MoD puts unreasonable pressure on DE&S

    How can they answer this one then, more spin, lies and brown n smelly stuff?
  2. wave_dodger

    wave_dodger War Hero Book Reviewer

    I'm not sure what you mean "how can they answer that" ? The report was commissioned by MoD to help inform PACE and the Green paper that is needed before the forthcoming Defence Review.

    Its not to be answered, it is to inform!
  3. Well once you inform people what a shambles the MoD is doesn't raise a lot of interesting questions that need answering?

    From what I see, admittedly only a small picture but pretty damming anyway, the whole Dept needs to be gutted and started again from scrtatch.
  4. Couple it with this article titled The Cowardice of Downing Street >

    Quote from the article [my bold]:-

    Defence industry executives briefed on the report say it is no surprise that Downing Street is nervous. It presents a devastating critique of procurement processes that waste an estimated £2 billion a year. It also makes it chillingly clear that huge cuts in planned spending are inevitable, with very serious consequences for one of Britain’s biggest industries.

    The problem is that the military chiefs want everything they see in the sweet shop and the officials and politicians can’t say no. When they run out of money, as they always do, orders are merely postponed, which raises costs and stores up more problems. In the case of the recently postponed aircraft carriers, which were clearly unaffordable when first ordered, the extra cost was £1 billion.
  5. Bergan

    How do we define unaffordable though, using the Carrier example how unaffordable do they become when we loose our current capability? Yes the Senior Officers of all ther services need to think about a nice to have v a must have but we still have to have the kit for the boys n girls to go do the Governments dirty work for them.

    I know I don't have all the answers, but there are supposedly much brighter minds than mine looking at this problem thankfully. The postponing of any project always raises the cost and just moves it into a new budgetry year, even the dumbest of us know this, why doesn't MoD / HM Govt? Would we be better off going back to RN Dockyards and Royal Armaments factories and having a War Dept?

  6. Alacrity - I don't know is the short answer. Certainly the need to increase defence spending can be justified by the fact that we have a lot of people in harm's way. Problem is that UK Plc is effectively broke and so......... projects that really matter to the defence of the UK will be abandoned to fund current commitments.

    Don't sell yourself short about 'brighter minds'; the decision on appropriating defence spending will be made by the same barstewards whose over-riding focus in recent years has been how to best fiddle expenses.

  7. Purple_twiglet

    Purple_twiglet War Hero Moderator

    Its a very interesting report - the key problems that MOD has stem more from a chronic lack of long term secure funding and planning, and also a desire to totally piss off the existing workforce.

    For starters, we have the fact that we keep having to do planning rounds, each year, to balance our control totals. This has led to massive insecurity on programmes (a whiff its facing the chop, or an option and the price balloons). We can't plan for years 1-10 properly as we keep reducing the size of the goalposts, and incrasing the size of the required savings measures. No10 won't let us cancel any programmes, and as we're driven by DSG and the SDR, we have to buy kit that we're doctrinally mandated to do, rather than buy ops kit.

    If we can't plan properly and cancel something, then we have to slip programmes, meaning that delays to carrier occur, increasing costs, but not losing capability. Slipping programmes costs more, but means in year savings and not having to cancel projects if possible.

    The DE&S description is also pretty good - we've managed to annoy good CS by undermining their career structures, and making it so that getting promoted to any reasonable level of responsibility requires you to leave DE&S and become a generalist. You have hacked off staff who can't get promoted either waiting out their time, or leaving in droves - hence the vacancies at Abbey Wood.

    At the same time we post in fast stream armed forces types who are 'high flyers' for 2 years, who then dissapear hating the place, or post in bitter and passed over staff to see out their careers.

    What we need to do is increase pay scales, and create a proper acquisition service which gives real career structure, and keeps HM Forces and CS personnel motivated to stay there. Do this and a lot will improve.

  8. Part of the problem is the suppliers who seem to find it impssible when asked to develop 'x'to say 'No, sorry, we're out of our depth here'.

    Add in military people with unrealistic ambitions and you have a dangerous mix with both sides too embarrased to stand up and say - this project is broke - and they just plow on hoping it will be all right on the night while the ISD slips and the costs rocket.

  9. A change to the system were an incoming Government has to sit down and decide on a Defence Budget for the duration of the parliament would certainly help. More long term and not having to fight off the Treasury and other departments each year. Defence is too serious a subject to be an annual spending round bunfight.
  10. PT

    I realize you are at the pointy end of this one, but with the current situation with Service folks on Ops all over the world and getting shot at daily, plus the general population getting laid off in droves or no pay increase for 2 years running I can't see a Civil Service pay increase getting any traction, really will have to make do with what you hve like the rest of us I'm afraid.

    I can see the 2 year billet for Service types who then trot off to their next appointment being a problem I agree there must be a better way of managing this, some sort of through life responsibility on that side of the shop sounds in order.

    Also like OS idea of 4-5 year Defence Budget, makes a lot more sense than going year to year, appropriate funds for certain projects and allocate them in advance, this could well go some way to changing the vendor side also as they will have stability for that same period, could even reduce the cost overruns experienced on Every project.

    However I still see a lot of Kingdom building happening in MoD that needs to be stopped immediatly, this could also help morale within CS.
  11. Purple_twiglet

    Purple_twiglet War Hero Moderator

    Alacrity - wasn't just advocating pay increase for CS, but also military procurement types too. one of the problems we have is that the staff we want to retain are feeling forced to leave as they can't afford to stay in the CS. A good C2 in the CS, (roughly SO2 level with 10 - 12 years of experience) will be earning £28 - £33k, while industry is paying more than this. The good ones go to industry, and we need to keep them in the system. If we don't, then we need to accept that they will walk, and our long term middle management (i.e. the ones who make things happen) are the 2nd eleven in terms of quality.

    For service personnel, I would advocate tied postings, with good promotion prospects, but bounce people back to ABW on a regular basis, with op tour intervals, and do staff postings and development jobs there, and use it as a career anchor. Make those staying in see that they can settle in Bristol, in the same way as people settle in Guzz or elsewhere, and let them build lives there. We need to provide family and career stability, and have a career path that leads up to 4* level - in other words, make CDM a procurement tied post.

    We already have a 3 year financial settlement, but we're broke in year, and need to get the books to balance before we can move on. Until we can cancel something big, we're going to continue having this problem
  12. Are the RAF considered big? Could always cancel them.. scouse and Waspie are waiting "in the wings" :wink:
  13. Bergen

    The £1BN additional cost for the carriers is actually a direct result of the postponement. As soon as Hutton stood up at the back end of last year and told the House that the ISD was being moved to "be coherent" (ho, ho) with the aircraft, but that work would still start at the planned time, it was obvious to all that extra cost was going to be incurred. If you have (say) 4000 bods working on a project for 2000 hours a year at £40/hr inc overheads, then thats an extra £300M per year delay. Add in the "accountancy" charges that RAB requires like cost of capital etc and you're pretty soon nudging £1BN.

    The cost escalation of the ships can actually be traced back to around 2002, when it became clear that the £2.8BN in the long-term costing for the ships (based on the original 40000 te concept design of 97-98) was not going to buy the 60000te plus ships actually required to deliver the required sorties. Cue hand-wringing, finger pointing and a two to three year exercise in trying to make the ships smaller and cheaper to fit the existing EP line, rather than a sober - "is this cost justified? Yes, crack on." The redesign exercise itself probably accounted for something like £400M in additional cost, delay and contractual difficulties, whereas had the cost of the design been compared against the EP line on an annual basis, the shock and consequent paralysis could have been avoided.

    The biggest cause of MoD inefficiencies (as PT alludes to) is the endless round of "savings options" undertaken every year, trying to reprofile budget lines to fit the arbitrary E&SP RDEL and CDEL limits, which usually assume that no impact on project costs will accrue from a delay, which surprise,surprise is far from the truth.

  14. There in lies the rub. The nipper left Uni with a Degree in IT and cast around for a job. CS would take him but the starting salary of an underwhelming 25K didn't work for him, neither did the thought of staying in grade for a decade before he could get paid something useful. He ended up working for LM doing much the same for £35k and and has excellent promotion prospects. With that reality on the ground it's very hard to get anyone with talent to take the technical side of the CS seriously as a career option.
  15. No big surprise. And dare I judge that this report has been saying what a lot of us have been thinking.

    Oil_Slick and others are partially right, the pay in the CS is rotten compared to the private sector. CS are expected to have degrees and postgrad degrees to get on (that's C2 and above), but postgrads can double the CS salary outside. There's no incentive to stay put, unless there's a recession, and I don't doubt that the most highly skilled CS don't hang around for long.

    The other factor is the postings themselves. CS are expected to be generalists, move around posts, and specialisation - apart from a couple of areas like lawyers - is actively discouraged if one wishes to go for promotion to Grade 7 (middle management, half-decent pay).

    So you have CS in posts for two years, a fifth of the life of an average project. Similarly military staff officers have two-three year postings. The turnover of fresh staff in a project can be very high, and how much experience do they have at procuring? (Or knowledge about the post they've been posted to. This can be said for many in Whitehall, let alone the MOD)

    The only way to sort this mess out is to professionalise DE+S. Stop it being two year postings and invest in proper training for people who are going to stay in the trade. Get apprenticeships in procurement, for example. It needs a complete rethink on how business is being done, not just a change of name from the DPA to DE+S.
  16. Another point to add to the mix. Having a few friends who work on the other sde of the fence for suppliers and contractors, they will often bid at a comparitively low level to gain the contract, and will rely on contract changes to make the profit margin respectable again. This is another factor that pushes costs above budget. The initial budget and tender figure are unrealistically low, any overrun which is therefore guaranteed will push the project over budget. And the reason why the bids are optimisitcally low - industry is told how much is likely to win the bid but the budget will rarely match the capabilities required.
  17. White Rose

    I think you do some of the people in DE&S a great disservice. There are some proper clowns in ABW and the turn-over of military staff (usually requirements types btw) does not help. That said, there are a lot of very professional people slaving away trying to ensure either availability (in the case of in-service kit) or progress (in terms of the E&SP). However, the bigger problem is at the other end of the M4, specifically in the bit of MoD MB that believes "reprofiling" to fit each years RDEL & CDEL budgets is a clever way to do business. It's not. It's utter and absolute b0ll0cks and benefits no-one, not the people who need the kit, not the people who have to live with the exising kit, not the people who buy the kit and believe it or not, not the people who supply the kit. So much time and effort (which = money) is wasted on impact studies, alternative assumptions, new OA studies and god only knows what for both MoD and industry, that the figure of £2Bn pa is the various reports is actually surprisingly low.

    No-one in their right mind would argue that spending over budget is a good thing or to be encouraged, but there should be some flexibility in the budget process to avoid the astonishing amount of nugatory (and probably soul-destroying) effort that goes on now.
  18. Purple_twiglet

    Purple_twiglet War Hero Moderator

    Not-A-Boffin -we all know the reprofiling is dire, but as we're not able to cancel projects, and we don't have anymore money, and we have huge financial issues - how else do we fix it?
  19. Not_a_boffin,

    Er, far from it. I was merely suggesting that the whole CS and military staff officer ethic of moving people around without specialisation - of which DE+S is a part - is shot. I think you've done some folk down in London - there are some very notable exceptions to every rule.

    I think we should have full time, professional procurement specialists. People who know the contracts system, who know industry, not people who sit in ABW for two years counting their days until their next posting.

    I just wonder, too, as an aside, how many procurement decisions are actually political in nature?

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