MOD's 2nd PUS discusses Defence Reform

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Ministry of Defence's 2nd Permanent Secretary, Jon Day, explains what some of Lord Levene's recommendations on Defence Reform will mean, and why we will see dramatic changes across UK Defence. Report by Lorraine McBride.

The Defence Reform Review, published last month, is the biggest root-and-branch change in Defence in 30 years.

Among the key changes that Lord Levene in his far-reaching review has called for is a smaller, stronger Defence Board, a smaller more strategic head office, cutting the number of senior staff, giving extra powers to the Service Chiefs to run their own budgets, strengthening financial management, and creating a new four-star-led Joint Forces Command.

Defence Secretary Dr Liam Fox, who commissioned the report last August, has accepted all of Lord Levene’s recommendations.

Jon Day supports Lord Levene’s recommendations to create a slimmed down Defence Board (MOD’s key decision-making body) and clarify the responsibilities of the MOD’s leaders and increase their accountability:

It is necessary because power without accountability is a recipe for bad decision-making,” he says. “Under the new system, as the MOD’s accounting officer, Permanent Secretary Ursula Brennan will personally eyeball TLB [Top Level Budget] holders and say, ‘OK you’re not performing here, why not, and what are we going to do about it?’

MOD’s budget black hole has been widely publicised. A key plank of Defence Reform is to strengthen financial management with a greater focus on affordability:

A lot of this is about balancing the budget,” explains Mr Day. “If you hold people to account, there has to be a realistic balance between the money they are given and what we ask them to do. Following the SDSR [Strategic Defence and Security Review], MOD’s budget is broadly in balance, which is an important first step.

Mr Day believes that the MOD is undergoing a culture change. During the Cold War, there was an implicit trade-off between capabilities, the speed at which they could be delivered into service, and value for money. Since then, because of our commitment to real operations, recent governments have concentrated on getting the right capability into service quickly, which was often at the expense of value for money:

We are now in different circumstances”, he says frankly. “The unprecedented budget deficit obliges Defence, and the rest of Government, to make major savings to live within the country’s means.

This is a defence issue because, if we do not balance our financial books, effective armed forces will become unaffordable. So one of the critical things for everyone in Defence is to focus on value for money in every decision that we make.

Mr Day is a veteran of previous defence reviews and reform initiatives, but points out that this review is different because of the financial background:

The fact that the Government has made dealing with the nation’s financial problems its absolute priority means that the context for this defence review is tougher than any I have known,” he says.

Another of Lord Levene’s recommendations is to make the head office smaller and more strategic. Mr Day says he doubts that bureaucracy will reduce simply because there are fewer staff:

Sadly, I don’t think that is the case,” he says. “My strong view is unless we actively reduce our workload, prioritise more effectively and change our culture and behaviour, we will carry on doing the same things we’ve always done but less well, failing to meet our objectives and piling more pressure on people. A vital part of Defence Reform is to change the way in which we do our business so that we can be effective with fewer people.

Trying to change the behaviours and culture of Defence is a problem that has plagued the MOD for decades and Mr Day warns of the danger of not staying the course:

Each time we have a review, we identify the problems but we don’t follow through on what we know is the right thing to do. We somehow lack the stamina to make change enduring. That must not happen this time.

A draft blueprint for the future head office and the relationship with the TLBs will be worked on over the summer for delivery in early September. There will then be a period of consultation to help Defence Secretary Dr Fox reach final decisions:

Thereafter, it will be for the TLBs to go away and redesign their own organisations in line with Lord Levene’s principles and the blueprint we have provided,” Mr Day said.

Defence Reform is part of the broader transformation agenda which is implementing the SDSR. Transformation covers over 70 workstrands, from rebasing the Army from Germany to the Whole Force Concept. Defence Reform is a key enabler to this programme. Mr Day stresses that the Defence Reform agenda is challenging but doable:

The aim is to implement Defence Reform by April 2013. Some measures will be in place well before then and others will take longer to complete. This is a demanding but realistic timetable. We are very good at reorganising ourselves, we’ve done it time and time again. As I stressed earlier, it is much harder to change culture and behaviours. That will be really difficult. But we must succeed this time.

Another big test will be keeping the MOD’s show on the road as radical change is implemented:

You have highlighted a major challenge between now and 2013. Transition needs to be planned properly and given the necessary resources. Part of the blueprint will be about that.

But he makes it plain that the onus is on staff at all levels to identify lower priority activities that we can reduce, postpone or stop doing completely:

We will provide guidance and top cover but everyone in Defence knows things that are less important or unnecessary.

Jon Day is optimistic:

This could be a once-in-a-lifetime opportunity to transform the way in which we work for the better. Defence will be different for everyone by 2013. We should not talk ourselves down. We have the fourth largest defence budget in the world. We can mount complex and enduring operations. We have extraordinary equipment programmes that we are bringing into effect. We can do transformation.

This interview by Lorraine McBride appears in the August 2011 issue of Defence Focus - the magazine for everyone in Defence.