Telegraph: "MoD £2bn 'Cash Pile' Scandal As Thousands Of Troops Sacked"

"The Armed Forces are suffering “unnecessary” cuts because the Ministry of Defence has failed to spend almost £2 billion of its shrinking budget, senior commanders warn"

Ministry of Defence £2bn 'cash pile' scandal as thousands of troops sacked - Telegraph

 

Without knowing what proportion of the underspend is DE&S's, I suspect that it will be music to Bernie Grey's GOCO ears. In his Business Plan 2010 - 2013 https://www.gov.uk/government/.../des_businessplan201013U.pdf

If he has missed his Target using Civil Servants, would a Contractor, sorry Partner have done it better?

Reading on,

and

countered by

shows incredible naivety. The Treasury and, for that matter, MoD (centre), probably will argue that less money will be needed in later years. If the Defence Finance courses are still run, I wonder if they still warn of the perils of underspend and the financial equivalent of pilot induced oscillation.

 

I'd argue we're doing the exact opposite, all the savings we are making are in the early years and we're shoving all the costs as far right as possible - we're re-creating the bow wave.

DE&S can't spend it because we're dumping 000s of millions in year at them and meanwhile constantly stopping them to make contracts changes and re-confirm savings options instead of letting them get on an deliver what we asked for last year.

We are in a huge mess, with no simple way out.

 

Your middle Para looks about right. Your 1st para also may well be true but the Defence averse beings that infest the Treasury will probably see it as the sharp knife they need to demand further savings in later years. It's also not clear what proportion of the underspend belongs to DES. It's also not clear if the Grey man met his target. The man's a businessman and thinks politically. I do think he would use a missed target as a stick to beat Civil Servants and certain Mil types with.

 

Thin Pinstriped Line: Underspending, not under investing - the MOD budget debate.

This guy has a different take on the subject. But do you agree with him

 

Yer man makes some good points and seems to have a reasonably good insight. Taking one of his fair examples;

That's a reasonably realistic, simple example of how a Staff budget can underspend. A bright visionary in the TLB directs down the food chain, thou shallt travel less, overnight less and represent less. If those further down the food chain are lucky, they might be invited to offer Impact Statements. What we don't know is what the impact was; we only know that the money wasn't spent. We also don't know how long the bright visionary hung on to the funds that weren't being spent and whether they were correctly reflected, in good time, in the Forecasts of Out-turn. The effects of not being properly represented at meetings or rocking up well travelled and knackered might not be apparent for years.

The thing that worries me is that inflicting pain and grief in that simple example for a year demonstrates that that you didn't need the money. What it doesn't demonstrate is how long you can sustain it without nasty side effects popping up in the future. That's simple, though; document the pain and grief suffered (assuming it was, of course) and bid for fund reinstatement to prevent recurrence in later years. That's a good time to start believing in Father Christmas and the Tooth Fairy.

 

Broadly yes, but:

"As posters have pointed out on ARRSE and elsewhere, an underspend is actually a very good thing for the MOD right now. Firstly, it provides a reserve of cash which can go towards meeting the reductions in expenditure demanded under the next spending round – in other words its preventing further job cuts to the Army. Secondly, if as promised the cash can be held by the MOD, then it starts to provide a small pool of funds to look at gently regaining capability in areas where risk has been taken in planning rounds – e.g. buy back training exercises, increase stockpiles, improve in small areas which never get any public interest, but without which the Armed Forces would struggle."

This isn't quite how it plays out - we can't use an underspend to offset against any reductions in the next planning round (ABC15) because that is based upon a different allocation of funding by which time the underspend will have been returned to HMT.

Secondly, we've previously not had an ability to make use of underspends, we're doomed to fail by annuality the process by which HMT requires MoD to consume resources in-year with only a minor ability to carry tiny sums over into the next FY. This was meant to have been changed to allow programmed funds to be carried between years, I don't believe we have reached that yet.

What this really means is that MoD simply can't discharge its function correctly, its given funding and a portfolio of capability to deliver but is denied one of the key drivers to do this correctly. If it can't move money between FYs it will never be able to properly manage its own portfolio. Doomed.

 

Regardless of individual political views, isn't this what the ongoing SDSR is supposed to be achieving?

What's the problem?

Senior commanders across the services have their own agenda as it's predicted that officer numbers will be cut by 30% by 2020.

Welcome to the real world.

 

Not the issue, the article purports that if MoD didn't need or could have channelled the underspend in a different manner it could have kept an Inf Bn or some other capability (lets say Ark Royal or Harrier).

The article misses the point - we were directed by SDSR to loose capabilities not because we couldn't afford them but because they were no longer deemed necessary for future tasking AND there were funding issues.

The wider debate here is about the ability of MoD to manage funding and for DE&S to actually manage and confirm deliverability of its projects such that MoD can have confidence projected spends will actually be consumed.

The latter point is incredibly contentious because we spend an inordinate amount of time with crawling all over DE&S, checking, confirming and altering [i.e. future carrier] requirements which impose a massive distraction to staff trying to deliver then we're surprised when they can't deliver on time....

 

We have to disagree on this, we as a nation are skint & regardless of what's on the military/MOD wish list we were/are spending/wasting too larger proportion of GDP on the military, & the politicians decided that it had to be reigned in as there are greater needs for the money elsewhere.

It's been mooted that without the Falklands conflict this type of reduction would have been done & completed by 1990 bearing in mind that it had already started in 1977/8.

When it comes to money being spent on "seniors" pensions & welfare who turn out & vote or extremely unpopular overseas conflicts that cost a fortune it's a no brainer which way the current politicians will jump.

This kind of political thinking has been highlighted only this week by the pulling out of exercise Djbouti lion on excessive cost grounds.

As I said earlier it's welcome to the real world for the MOD/military.

 

WD - my understanding when I wrote the piece was that underspends this year led into the demand for CSR cuts - happy to correct it if this is wrong.

 

My understanding is that a significant proportion has arisen due to the inability of DE&S to deliver and go to contract - the rest is due to more people leaving etc etc as reported but without the spin.

It's not a good position to be in because despite taking some extreme measures to demonstrate how fiscally aware we are and how we're taking this seriously we're in the position of having to give back money. Not good and will only lead to worse behaviours at the precise moment we're trying to correct them.

 

Sorry I don't really get what you're trying to say here - welcome to the real world?

The story is a mis-story, it's inaccurate and misrepresentative and Hammond is fair in his response.

The SDSR drawdowns are cracking on, we're making the force adjustments as directed.

The Nott review and subsequent were way over the top for the time - but oddly quite reflect todays intent, scale back from out of area "global policeman' role and move more to support NATO. Then the world changed and we saw vividly how defence planning assumptions are only that..

I don't understand your comment "This kind of political thinking has been highlighted only this week by the pulling out of exercise Djbouti lion on excessive cost grounds" - care to expand?

 

FAAFLYNAVY; I understand what you are trying to say. You make some good points.

More broadly, I resent the assertion that it's DES that's f**ked up. We don't know because we are all too insignificant to be told. If DES has contributed, I'm ashamed. I still ask the question, though, is it feeding the case for GOCO?

I exspect that the Front Line Commands know something about it; don't you? (all respects to Bill and Ben).

 

Broadly yes, much of the underspend is from DE&S but at the same time they've had £000M dumped on them IY to spend, which is unachievable, plus yes, in some areas they've not delivered. Not as bad as it sounds but still food for the GOCO or DE&S+ arguments.

I honestly don't get what FAAFN is driving at - must be having a thick moment

 

What I'm implying is government/party decisions are being driven by public opinion today, with the weak state of the two main parties they are desperate to try & win votes by doing what the public want & not what's the best political/military decision.

Both the main parties have less credence in the public's eye then estate agents & their core supporters/financiers are leaving in droves, the press are continuing to highlight all their private & public failings & calling their core supporters "bigots" Gorden Brown, "swivel eyed loons" Cameron, only goes to confirm just how much they are out of step with the masses.

They are also up against a very large switched on group of "seniors" who turn out & vote & who have little interest in "over the horizon issues" such as Trident replacement at £40b or the F35B, they want their money spent on elderly care, hospitals & grand-children's school/tuition fees, & hold the view that if "Johnny foreigner" still wants to go round killing each other, so be it, also they don't want troops/equipment in dockyards/barracks/air bases doing very little, they want police/fire/paramedics units on the streets for their money.

We have two carriers being built that the contract has been twice reviewed & if possible they would have been stopped, the F35B project is now in doubt & it looks likely that if Obama gets his way on his welfare bill they could be shelved to help pay for it, we have already seen the X43 & the F16 pilot-less & it's rumored that the F22 is being fitted out for testing, non of which can be used on the new carriers, so I can see them being sold on to whoever operates the harrier still.

The money going into the exchequer is falling fast due to tax avoidance/the black economy & the public now want to see real VFM for the masses from governments.

Finally as I have said there is no cohesion between the parties on any of the defense issues, both are running scared of the voting masses whose voices are being expressed very loudly & clearly by the likes of Farage, Clarkson & the unions, I don't see any end to the military spending reduction for many a year, you only have to look at the reaction of companies like Westland, BAES & Quinetic to see which way the wind is blowing, they are all looking to get out of defense as their main market & into the civilian world.

It really is a case for the MOD/military of welcome to the real world.

These of course are only my personal opinions on the matter.:salute:

 

So does the blog post that it is underspending and not a deliberate cutbakc hold any claim?

 

Ok, now I get you. Interesting take.

I'm not sure I agree on military spending reducing though. We have agreement for a relative increase from our current position and HMT recognise we need to get back to a contingent footing. That said thats the current deal, post SDSR and CSR15 that could be very different.

Not sure where you worked or if you are still in but industry is knocking down our doors in these parts - we've money to spend over the next 10 years.

I'd be interested to see public reaction if the Armed Forces were cutback much more to be honest. We're are as lean as we can be without cutting tasks and I don't see any Government doing that for fear of losing US, EU or NATO credibility. Re-posturing and adopting more sharing and making better use of MoUs is keeping is largely in step.

But 2015 will be interesting nonetheless.

 

I would argue that the multicultural & poorly educated UK population in the 21st century have little interest in the military per se, & the "seniors" in general consider that of late we've been involved in too many conflicts that weren't any of our concern & too many of their grandchildren have come home in body-bags or suffering serious injuries just to flatter the ego's of the likes of Bush, Blair & Brown, the recent defeat for Cameron has highlighted the changing mood of how the MP's are taking note of the voters & Farage & not the whips.

And contentiously I would also argue that the current political leaders would bin both the Falklands & Gibraltar like a shot if they could get away with it without loosing face.

With this in mind I can't see any great public reaction no matter how large the military reduction is.

 

Not so sure I'd agree. You only have to scan the tabloids and their online forums to find support for the Forces and people have a longer memory than you may think.

I accept that Iraq an Afghanistan have probably taken their toll on the nations ability to reconcile with casualties and would be quite prepared to be vocal about opposing a future suggested intervention would it not be considered a popular move but the Syrian vote was many things but a reinforcement of that.

Firstly I don't believe Cameron needed parliaments approval, he retains the crown prerogative and could have made good the order from his own authority but I believed he played a political blinder by appearing to listen to the people. He knows the posture of UK forces, understands how ragged they are after 10+ years of Ops and understands the political merit of stepping down from Syria which allowed Obama to step back too. Games within games methinks.

"Multicultural and poorly educated UK", is that the broad population or just a segment?