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Defence Reform

Statement Last August I asked Lord Levene to undertake a fundamental review of the way in which the Ministry of Defence is structured and managed. Today I am publishing the independent report led by him. Copies of the report will be placed in the Library of the House. I would like to thank him and all the members of his steering group both for that excellent report and for setting us all an example by delivering it early. Lord Levene's group has recommended a radical new approach to the management of defence, and I am pleased to say that I agree with him, as do my ministerial colleagues, all the chiefs of staff and my permanent secretary. We have already taken forward some of the recommendations. No one in this Government was under any illusions about the scale of the challenge that we inherited in defence, which Lord Levene's report confirms. We have already introduced changes to budgetary control, the reform of procurement, export promotion, small and medium-sized enterprise development and changes to our armed forces. The strategic defence and security review set a clear direction for policy and will deliver coherent, efficient and cutting-edge armed forces fit for the challenges of the future. As a result, Britain will remain in the premier league of military powers. However, the vision of the SDSR cannot be achieved without tackling the drivers of structural financial instability and the institutional lack of accountability in how defence is managed, and Lord Levene's report provides the blueprint for the necessary transformation. Before I set out his recommendations in more detail, let me first acknowledge the great strength that resides within our people in defence. They are professional, committed and often frustrated by a system that all too frequently lets them down. Among other things, the report describes a Department bedevilled with weak decision making and poor accountability, in which there is insufficient focus on affordability and proper financial management. Lord Levene's steering group proposes a new, simpler and more cost-effective model for departmental management, with a clear allocation of responsibility, authority and accountability. That will build on the strengths of the individual services within a single defence framework that ensures that the whole is more than the sum of its parts. It will be underpinned by a number of core themes. First, to date individuals in defence have been asked to deliver defence outputs, but not given the means with which to do so effectively and efficiently. Authority must be aligned with responsibility, and budget holders should have the levers that they need in order to deliver. They should then be held robustly to account. In the past, the decisions that should have been made centrally have been ducked, and head office and Ministers have delved into tactical-level detail. The defence reform unit recommends a strengthened decision-making framework for defence, centred on a new, leaner defence board based around the Defence Secretary, who will chair it and make the decisions. He will be supported by the permanent secretary and the Chief of the Defence Staff, who will bring to the meeting the views of the single service chiefs. I have already established that new board, and I chaired the first meeting last week. The new group will offer the type of decisive and focused strategic direction that has been so lacking in recent years. Secondly, financial management must be tightened and a risk-aware and cost-conscious mentality must permeate every level of the MOD. The review recommends a new planning and financial model. Within that framework, we will empower the chiefs to run their individual services. Our single service chiefs are the custodians of their services, the fundamental building blocks of defence. Sadly, they are currently forced to devote far too much of their time to trying to influence policy and haggle over funding in London, which is a pointless waste of time and talent. In the new model, the service chiefs will get clearer direction from the defence board, carry out the detailed military capability planning needed across equipment, manpower and training, and then propose how best to deliver that strategic direction. Once that is agreed, they will be given greater freedom to veer and haul between priorities within their own service to deliver what is needed in defence. They will enjoy long-denied freedoms, and they will be held robustly to account for doing so. Allowing the chiefs to spend more time with their service reduces the requirement for commander-in-chief appointments, which will be phased out as part of a general reduction in senior posts. We will work closely with the Treasury on how to deliver that major change, but I am confident that when they are properly supported, trained and directed, our people at the point of delivery are best placed to run their business, not those at the centre. Micro-management must be consigned to the past. Thirdly, the service chiefs have an established role as advocates for their service, but powerful single-service advocacy can sometimes be at the cost of joint or cross-cutting capability. The report has recommended that we create a new Joint Forces Command. It will manage and deliver specific joint enabling capabilities and set the framework for other joint enablers within the single services. It would include the permanent joint headquarters and be led by a new four-star commander. Joint Force Command will therefore be an important organisation in its own right but also have a symbolic purpose, reflecting our view of how conflict will develop, and providing a natural home for some of the capabilities of the future, such as cyber, as well as reinforcing joint thinking, joint behaviours, and the new generation of officers in defence. It offers a new opportunity for career progression right to the top and a challenging and intellectual career for those who otherwise may not have been attracted to defence. It is a fundamentally meritocratic reform. It may also be a path for service personnel who are injured on operations and unable to serve on the front line, but who are still determined to serve their country. Fourthly, the report rightly challenges us to consider whether we maximise talent across defence. Be it in promotion, the development of key skills, or helping our people choose the right career path, more can and should be done. The report has concluded that we must pursue more vigorously the principle that posts be filled by the right person, with the right skills, for the right length of time. Buggins's turn must not interfere with the promotion of the right person for the job. Nor can we have the sort of musical chairs that occurred in the past. Lord Levene has therefore recommended that we move to a system whereby most senior civilian and military individuals stay in post for longer than at present, as a rule for up to five years. That will allow our people to establish themselves in their roles, and invest the time they need to make a real difference to defence and be held to account for their performance. To ensure that we maximise delivery on the front line, Lord Levene has recommended that we review all non-front-line posts across defence, beginning at the senior and management levels, including an assessment of the most cost-effective balance of regular military, reservists, civil servants and contractors. We are top heavy and that must end. Most significantly, Lord Levene recommends that we adopt a new, more ““joint”” model for the management of senior military personnel to make the promotion and appointment processes more transparent and standardised, and to encourage the development of officers with strong joint credentials. Lord Levene's report covers far more than I have been able to address here. It is a thorough and compelling analysis that deserves close attention. I am confident that when the people in defence review the recommendations, they will recognise this work not as a criticism, but as a constructive critique of a Department in need of reform, and that they will relish, as I do, the challenges that it represents.