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Lord Levene Study - June 2011

Published: 06 Jul 2011

To ensure the attempted progress to MOD Reform is recorded, herewith a copy of an article in The Times:

‘Our review was overdue. Change is fundamental’ - Lord Levene Commentary - From The Times 27th June 2011.

Last summer Liam Fox, the Defence Secretary, asked me to lead an independent review of how Defence is structured and managed. I worked on the review with a group of senior leaders from the private sector and a team within the MoD.

It is arguably the first root-and-branch examination in more than twenty years of the way that Defence works. Many of those we spoke to felt that it was long overdue. They argued that the incremental changes of recent years were no longer enough; something more fundamental and far-reaching was needed.

Some aspects of how Defence is run are admired internationally. Most importantly, Defence can count on its many committed Servicemen and women and civil servants.

The new model for Defence management that we have proposed aims to build on the strengths of the individual Services. But it aims to do so within a stronger single Defence framework, which ensures the whole is more than the sum of its parts.

The financial crisis in Defence has been well-documented. Last year’s Strategic Defence and Security Review began the difficult process of bringing the over-heated programme back into line with the budget. Our view is that the existing model for running Defence contributed to the loss of control over the programme.

Running current military operations and preparing for future operations is, of course, at the heart of what the MoD is here to do. But equally, financial management across Defence must be significantly strengthened. The financial gene needs to be a core part of the Defence DNA, so that staff work to make the programme affordable and keep it under control. Ultimately, an overheated programme simply leads to deeper and less coherent cuts.

We have also made proposals to strengthen decision-making in the MoD. A new, smaller Defence Board chaired by the Defence Secretary is at the heart of that structure. Senior individuals should be responsible for delivering within their budgets.

An increasingly “joint” approach has been a feature of Defence over the past generation. We believe there is more that the MoD could do. We include proposals to improve the way critical joint military capabilities, such as intelligence assets, are managed and championed across the Services. It also sets out a more joint approach to the appointment and promotion of senior military officers. We recommend, too, that people stay in post longer, rather than continually changing jobs.

We believe that our proposals provide a more effective basis for running Defence, to serve Dr Fox and his successors, and to support the Armed Forces now and in the future.

The taxpayer and our Forces deserve better.

From the Daily Telegraph 27 June 2011.

The Defence Secretary is to be applauded for challenging his department so boldly.

A quarter of a century after Lord Levene of Portsoken first tried to make the Ministry of Defence more efficient and businesslike, he has returned for a second bite of the cherry. In the intervening years the MoD has cornered the market in Whitehall inefficiency. It has twice the number of senior civil servants as any other department, yet has become a byword for incompetence. Perhaps the two are linked. An investigation commissioned by the last government unearthed a state of near-anarchy in a procurement programme that was £35 billion over budget and five years behind schedule.

The primary reason for this sorry situation is an organisational structure the Levene review describes, accurately, as “bloated and dysfunctional”. The supreme authority is the Defence Board, on which sits, incredibly, not a single minister: it comprises senior military officers and civil servants. As a consequence, inter-service squabbling is rampant – as we saw in last year’s Strategic Defence and Security Review (SDSR) – and there is a total absence of business expertise. It means that a year into the job, Dr Liam Fox, the Defence Secretary, still has no clear picture of the financial outlook for his department. Our Armed Forces deserve better, and so does the taxpayer.

The Levene reforms envisage a more streamlined top management with clear political control and an injection of outside expertise. Just one senior officer – the Chief of the Defence Staff – will sit on the Defence Board, which will be chaired by the Secretary of State. Outside experts will be brought in to give independent advice. The board will focus on strategic operational and procurement issues, while the Armed Forces will be disengaged from policy making and left to get on with the fighting. At the same time, the commanders of each service will have greater responsibility for their own budgets. There will also be a thinning of the “star count” in our top-heavy military establishment. It is unacceptable for the Royal Navy to have more admirals than ships and the RAF more star-rank officers than the far larger United States Air Force.

The other theme of the Levene reforms is greater joint activity by the three services, including a new joint forces command. This will start to blur the boundaries between services, though ministers should not underestimate the institutional resistance they will face. But in an age where flexibility and swiftness of response are paramount, traditional service rivalries look anachronistic. Dr Fox is to be applauded for challenging his department so boldly, but he knows he has a fight on his hands. It is one he must win.


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