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Parliamentary and Political Monitoring Report w/c 29th January 2018

By DPF Admin5th February 2018August 6th, 2019Area Updates, Latest News, Northern Updates, Southern Updates

Defence Secretary Gavin Williamson has been remained prominent in the media over the past week: warning of the dangers of Russia to the UK’s power supply; admitting an affair with a colleague in a previous job; with allies of the Defence Secretary also criticising Foreign Secretary Boris Johnson and sources close to him for briefing against Mr Williamson. The spate of headlines regarding the Defence Secretary comes amidst renewed scrutiny over Theresa May’s position as Prime Minister (although Mrs May has insisted she intends to stay in post and fight the next general election). Mr Williamson (along with Boris Johnson) has been touted as a candidate in a possible leadership contest, and the Defence Secretary’s comments and admissions in the past week have been perceived by commentators as part of a leadership strategy.

In other news, the National Audit Office has published a report criticising the MoD’s 2017-2027 Equipment Plan, finding that it is “not affordable and does not provide a realistic forecast of the costs the Department will have to meet over the next 10 years buying and supporting the equipment it has determined the Armed Forces need.” Defence Procurement Minister, Guto Bebb, issued a statement acknowledging the financial risks that the Plan is exposed to and identified the Modernising Defence Programme, the defence review recently separated from the National Security Capability Review, as how the Government will address it.

Outsourcing giant Capita, with which the MoD has a £752m contract, has issued profit warnings this week. The news follows the collapse of fellow outsourcing provider Carillion, which held significant contracts with the MoD.

Overview

·      Defence Minister answers question on MGS

·      NAO published report on Ministry of Defence Equipment Plan

·      Army recruitment firm issues a profits warning

·      Defence Secretary criticised for separating defence review

·      Security chiefs call for defence cooperation with EU

·      Forces chief is paid double his US counterpart

Defence Minister answers question on MGS

The Defence Minister with responsibility for the MDP and the Ministry of Defence Guard Service (MGS), Tobias Ellwood, has answered a question by Michelle Donelan, the Conservative MP for Chippenham, on the MoD’s plans for the MGS. Mr Ellwood responded saying that “security remains a priority” and that “no decisions will be taken which would compromise the security of our personnel, information and assets.” He explained that “it is too early to determine” how an ineffective unarmed guard service will be deployed through the UK’s defence establishments to achieve “maximum value for money for taxpayers.”

Ms Donelan’s questions follows speculation the work of the MGS could be outsourced. The Federation is monitoring for further news related to the future of the MGS and will communicate this to members – along with any implications for MDP – when available. The DPF is also meeting senior parliamentarians this week and will use these opportunities to clearly define the roles of the MDP and MGS.

NAO published report on Ministry of Defence Equipment Plan

The National Audit Office has published a report on the MoD’s Equipment Plan 2017-2027 in which it condemned it as unaffordable and unrealistic. It calculated that there would be “a minimum affordability gap of £4.9bn” and that the “potential affordability gap could be £20.8bn.” The report stated that “the Plan does not include £9.6 billion of forecast equipment and support project costs” and that “the Department has understated forecast costs of equipment and support projects by a further £1.3 billion.”

The report outlined a range of credible risks that would increase the costs to the MoD, including a £3.2bn potential understatement in the cost of buying and supporting equipment; a £4.6bn deficit resulting in the decrease in the value of the pound; and that £8.1bn of efficiency savings have yet to be met by the MoD. It criticised the MoD’s costings as being optimistic and the exchange rates as unreflective of the market rates at the date of the Plan.

In a statement, Defence Procurement Minister Guto Bebb acknowledged there was “a high level of financial risk and an imbalance between cost and budget” but the Modernising Defence Programme would look into ensuring the Armed Forces were sustainable and affordable. Wayne David, Mr Bebb’s Labour Shadow, said, “this serious failing by the Government has grave consequences for our defence capabilities and national security. You cannot do security on the cheap and it is time for Ministers to get a grip and ensure that we have the investment in our nation’s defences that the public rightly expect.”

This report further highlights the funding crisis in the MoD and will make a strong case for the Government to increase funding to the Department. It is likely that this will be subject to a Select Committee inquiry, for which the DPF will submit evidence as appropriate about the importance of funding for the MDP for the security of MoD personnel, information and assets.

Army recruitment firm issues a profits warning

The shares of Capita, an outsourcing company that has a £752m contract with the MoD to manage Armed Forces recruitment, have plunged to a 15-year low. The firm, which employs nearly 70,000 people and generates revenues of £4.9bn a year, issued its first warning 16 months ago and has since been awarded almost £200m in 193 state contracts. Capita announced that 2018 profits would fall short of expectations at between £270m-£300m. This follows the collapse of construction giant Carillion, which the Government had been criticised for continuing to award contracts to after it had become apparent that Carillion was in trouble, which is contrary to public procurement rules. Capita has said that it is “not the next Carillion.”

A Government spokesperson said: “We do not believe that any of our strategic suppliers are in a comparable position to Carillion.”

Defence Secretary criticised for separating defence review

The Defence Secretary has been accused of “playing politics with defence” for having defence separated from the National Security Capability Review, The Times has reported. Speaking to the Joint Committee on National Security Strategy, Lord Ricketts, a former national security advisor, called the decision a “backward step” and contrary to the efforts over the past 10-15 years to improve departmental cooperation and integration. He said that politics was the only reason for the separation “as far as I can see.”

Robert Hannigan, former director of GCHQ who gave evidence to the committee alongside Lord Ricketts, supported these comments saying, “pulling [the review] apart now doesn’t seem very coherent,” and referenced the increased threat from cyberwarfare as being “a perfect example” of the need for a joined-up approach as the threat “cuts rights across public safety, security, intelligence through to defence.” Sir John Sawers, former head of MI6 from 2009-2014, agreed with the sentiment but noted that the hole in the MoD budget was “a problem.”

Security chiefs call for defence cooperation with EU

Mr Hannigan and Sir John told have also the BBC that that it would be “absurd” to use security as a bargaining chip in Brexit negotiations. They said that the UK might have to accept some rulings from the European Court of Justice to protect the cross-border flow of intelligence. Sir John said that intelligence “is based very heavily on having access to data” and the Government needs to address “how we continue to retain data.”

This comes after the UK was instrumental in gathering intelligence on the perpetrators of terror attacks across the continent. The former chiefs called using security in the Brexit negotiations “a zero-sum game” noting that the consequences would likely “be negative on both sides.” Sir John said that “Europe is going to be our security backyard forever” and that the EU’s “security benefits our security. The more secure France is, the fewer dangerous people are likely to cross from Calais to Dover.”

Forces chief is paid double his US counterpart

The Times has reported on the difference in salaries between the most senior military officers across a range of countries, noting that the head of the British Armed Forces is paid almost double that of his American counterpart. Air Chief Marshal Sir Stuart Peach has an annual salary of between £255,000-£259,000 before tax, compared with General Joseph Dunford, US Chair of the Joint Chiefs of Staffs, who is paid £133,800 with a £2,820 personal allowance. This comes out of respective budgets of £36bn and £451bn. The head of the German Army, the Inspector General of the Bundeswehr who is currently General Volker Wieker, earns approximately £147,000. The highest paid generals are in Australian and New Zealand, who earn £314,000 and £326,000 respectively.

According to the Institute for Strategic Studies, the US defence budget pays for 1.3m active personnel, compared to 152,350 in the UK. It also notes the comparative salaries of the echelon below the commander, such as the Army’s Chief of Staff, General Sir Nick Carter, who is paid between £180,000 and £184,000, whereas his American counterpart is paid “tens of thousands of pounds less.”

Defence Select Committee member and DPF supporter, Madeleine Moon, said about the figures “it doesn’t feel right and more to the point it isn’t right.” Former Labour Defence Minister, Kevan Jones, said that the Armed Forces “are top heavy” and called for increased scrutiny over the number of senior officers.

Michael Clarke, a former director-general of the Royal United Services Institute think tank, defended the figures saying, “I would be surprised if the boys and girls in uniform felt it was wrong when put in context.” An MoD spokesperson said that such like-for-like comparisons were “misleading.”

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