What is the TRUE position on Defence finances?

[Dundiggin']

Having suffered financial constraints on defence over the last 9 yrs, what is the true financial position and is there any light at the end of this dark tunnel?

[BEagle]

1. There aren't any.

2. The light is merely a train coming the other way.....

[Pontius Navigator]

Quite good according to Des, I understand. The FRES programme has been brought forward 2 years to 2010 for the utility variant only problem is it will only fit in the A400M and the C17.

Can't disagree that over the years that Labour has probably been as generous as the other side. They started the bomb programme. Then F4, C130, probably Nimrod, possibly Jaguar although I know Ted Heath ordered a large batch to replace the Gnat. True the forces' friend, Dennis Healey pulled us out of East of Suez, actually he didn't it was Michael Stewart - Healey wanted us East of Suez and out of Germany. Still when push came to shove they continued the WE177 programme when that could easily have been cancelled and been an excellent reason for disbanding the nuclear deterrent in 1965.

Apparently the Ops are 'free' too as they come out of the contingency reserve.

[tucumseh]

If I were Gordon Brown or Des Browne, I’d put a freeze on defence funding until the likes of DPA and DLO have implemented the recommendations of a host of auditors and select committees who, over the last 15 years or so, have recommended the same thing time and again.

STOP WASTING MONEY.

As they have been told so many times, and have failed to act, then one assumes their actions are deliberate.

[Wyler]

Is it any wonder we are in such a state when, as an example, you shoe horn more and more people into places like High Wycombe, a rediculously expensive piece of real estate. The ERA bill alone must be eye watering.

[chevvron]

There's no money left, it's all going into that bottomless pit laughingly called the NHS.
Suggest you recruit more ethnic minorities and homosexuals; that will qualify you for Lottery funding.

[FormerFlake]

Having suffered financial constraints on defence over the last 9 yrs, what is the true financial position and is there any light at the end of this dark tunnel?
The tunnel to has been cancelled, the money saved will fund a new project, the VC10 2050.

[GlosMikeP]

Having suffered financial constraints on defence over the last 9 yrs, what is the true financial position and is there any light at the end of this dark tunnel?

I sort of covered this in another strand on defence procurement. In short: bankrupt and digging holes. At length:

The introduction to a recent conference by a 2-star (no names, no pack drills) could be summed up as: 'this is what we want; these are the advantages of our having this capability; this is what we do with it when we can get it (pretty impressive it was too!); and we can't afford it so need you industry chaps to give it us for free. I exaggerate only a little. On another tack, a major system's upgrade hangs in the balance because the budget is substantially short of the minimum necessary to do the job - and yet without said system warfighting will become extremely difficult. Not upgrading it may even compromise national obligations. But no one seems to have grasped that particular nettle yet.

Lots of MOD (in the widest sense) activities in cost reduction are in fact risk ramping - and of course, risk transposes directly to cost increase. At present it seems there is death by study going on - hoping to find money that isn't there and wasting time, people and money in the process, and failing to deliver capabilities and systems to minimum acceptable standards (I'm deaf to political banter about it's all OK really). An example:

We were invited to tender to write a Systems Requirements Document (SRD) recently to map onto the already written User Requirements Document (URD). For the non-technical reader, the URD states the problem without indicating a solution and the SRD proposes what measures can be taken to address the URD, but again without stating a solution. The solution starts really at the Architectural mlevel of design.

On inspection, the URD text was clearly good UR stuff, at which military guys are really first class at coming up with if guided well on technical issues. But the actual list of 'requirements' were nearly all SRs. In a nutshell the consultants had c:mad: ed it up. What to do! No bid, tell the IPT and be ditched as non-compliant, or bid as expected and then do some decent consultancy and put it right?

We decided the latter as we knew we could do the job better and more quickly than expected (because the major work was already half done of course!) and offer time and resources back to the IPT to use elsewhere or even take as a saving. In effect we played to win so we could then re-negotiate the contract to MOD's advantage after winning. Contrary to common belief good consultants don't just take the money and run; they add value - especially those of us who once wore a uniform, who still have a commitlent to the Reserves and who have considerable empathy with the military mission and regard for the lives of our friends still serving.

The military guys had done a fine job with the introductory URD text but the external support 'consultants' (employed at much lower rates than used to be the norm, to keep tight control on cash) had messed up the URs, had not scoped a 'context' - and of course the military guys had then been allowed to do what they should not do and jumped straight into solution space instead of staying at problem 'what we want is' level. The latter is a consultancy failing, not a military one. It's what we should be expected to do and be paid a good fee for doing well.

The upshot is we lost the bid to a less capable and cheaper company who will (we are quite sure) compound the problems. Hence by going cheap, MOD has added risk and will eventually get its system at a higher price than if it had paid the proper market rate for the consultants in the first place. Indeed in the present climate it is quite possible the procurement will hit the rocks and fail (sorry, become a saving). You get what you pay for.

It's really too rich by far to blame the IPTs, or even DPA/DLO procedures -which have in fact got a lot better over recent years - and it certainly isn't fair to blame the servicemen and civil service folks caught up in the mess. People on all sides are doing their best to make things work but the cash constraints are now so harsh that cost cutting below that which is wise has become the norm, even expected; at very senior level, it's demanded; indeed it's institutionalised.

Changing the situation is now, I believe, a matter of leadership: of someone senior saying 'something has to give'. Stop looking for someone to blame other than the government, just address the problem with honesty and frankness and by exposing the problems for all to see. It's a problem only the government can reverse or alternatively, in my view, chiefs contain by cutting out major capabilities and accept the obvious implications on warfighting abilities.

We're considering moving out of defence altogether. It doesn't pay well enough and has perhaps (I live in hope to the contrary) become more trouble than it is worth.:ugh:

[tucumseh]

GlosMikeP

I don't doubt a single word you say, and recognise much of it from personal experience. However, the one person you don't mention here is the project manager in the IPT you deal with. What on earth is he doing? CDP has ruled that he MUST be able to carry out the work you mention if DEC or whoever is meant to do it can't, or won't. URD, SRD, ITEAP, ILSP, QP, PMP, and so on. He MUST be able to fulfil EVERY role in his team, even though he is often a junior member, which is itself a ludicrous position.

The fact that so many cannot do this, and are never tested on a fraction of these disciplines during their meteoric rise, is one of the biggest problems. (So why does DPA insist on applying the rule to some, but not the majority?). Their c.v. looks impressive - worked on this and that project. But there is no substance, it's all style. Very few have initiated a project (the difficulty bit, as you so rightly point out), managed development and production, delivered the kit to Service or, God forbid, supported it. Most of them target posts where Main Gate has been achieved, do a two year stint and disappear on promotion before the crunch. Or take over when the kit is in service and the remaining task is to effect transfer to DLO.

Faced with this, is it little wonder we don't see the strong management you seek. Most no longer understand the question.

[GlosMikeP]

TUCUMSEH

Troublesome isn't it? Actually you raise 2 good points from one - both carry a hint of MOD not knowing 'how to do it' but in fact come down to lack of money. And you're pretty much spot on.

Taking your obvious point first, it's ludicrous, as you say, to expect the PM to take on everything no one else is doing/can do. That's taking PRINCE2 to a daft extreme, but the inexperienced do fall into such traps and, I agree, it's commonly seen. Resolution: needs people in support who know 'how to do it' without thinking, and who can both advise and do to a high standard time after time.

But that would need consultants of proven track record (premium rates of course) brought in as 'customer friend', to make sure risks and issues are captured and managed well; plans written and put in a proper industry standard tool (not MSProject); and that interdependencies are managed as Issues (how many know it should be done, let alone do it?); and that specialist areas such as requirements engineering and management are handled properly, and not left in a tangle; etc, etc.

Turning to the second point. Most big/complex/costly/long-term procurements should really be treated as acquisition Programmes, not projects. Programmes and projects aren't the same and require completely different handling. I've yet to meet anyone in an IPT who can without hesitation tell me the difference between a programme and a project and then go on to explain how they should differently be managed - and give me an 80% decent answer.

Both can be covered with budget by employing consultants with proven track records at decent rates - but not at the rates MOD can afford to pay at the moment. The upshot is in fact that systems houses and management consultancies are sending their best consultants towards the financial sector and covering defence by fronting bids but using new start-up companies and associates to staff them, on low fees with modest mark-ups (typically 20%) or moving out altogether.

The penny pinching is adding invisible, unmitigated risk to procurement that won't be solved by employing more outsiders at low rates or by insiders working harder and doing more cost reduction studies. Truly sad.

[Vifferpilot]

We're doomed....doomed I say :sad:

[BEagle]

"URD, SRD, ITEAP, ILSP, QP, PMP....."

WTF?

[tucumseh]

Beagle

If you don't know, be glad, because the story has no ending.

[GlosMikeP]

Beagle

If you don't know, be glad, because the story has no ending.

Hear, hear! And if anyone invites you to a place where they are terms of common usage, run like bu:mad: ery and look for a better posting that might give you a career!

[GlosMikeP]

Going back to the main question posed in this thread, if anyone wants to get an overall view on the scope and broad impact of the spending shortfall, check out:
-Future Carrier
-Defence: Public Ignorance, the media and cutbacks
-Parliamentary questions re Hercules Safety
-UK Defence Procurement Crunch Coming
-Privatised Battlefield Support Helos

There is an air of desperation mixed with exasperation at times!

[Dundiggin']

Nice one ... I'll have a shooftie at those. It's a bloody mess for sure.

Unusually and even more depressingly, there does not appear to be any respite on the horizon if and when we vote this lot :E out......:ok:

[GlosMikeP]

Yes, and the real worry is it's going to cost lives, if indeed it hasn't already (Herc). It's an absolute disgrace.

[Dundiggin']

'The penny pinching is adding invisible, unmitigated risk to procurement that won't be solved by employing more outsiders at low rates or by insiders working harder and doing more cost reduction studies. Truly sad.'


Is CAS actually aware of this view?

If so what is/can he to do about it? :hmm:

[GlosMikeP]

I can't believe he doesn't know, or perhaps at least suspect it's so.

[Ali Barber]

You could ask here for more information:
http://www.jonco48.com/blog/****_20creek_20store_small.jpg

[GOLF_BRAVO_ZULU]

Very few have initiated a project (the difficulty bit, as you so rightly point out), managed development and production, delivered the kit to Service or, God forbid, supported it. Most of them target posts where Main Gate has been achieved, do a two year stint and disappear on promotion before the crunch. Or take over when the kit is in service and the remaining task is to effect transfer to DLO.


You highlight a weakness there that seems common within the DPA. In-service support often appears to be an afterthought. The Contractor is invited to offer innovative solutions but little understanding or regard is evident of existing capabilities and constraints. By the time a logistician in the DLO becomes involved, the bright decisions have already been made. This has a direct effect on the end user and resulted in one instance, a class of HM Ship requiring two separate stores accounting systems. If the merger arrangements remove this serious organisational disconnect, it can only be to the good.

The DLO, of course, is not without its own tribulations. It is in initiative overload and beset with joint supply doctrine not matched to every single Service problem. All this is without having to contend with a miserly Treasury. The Brown/Browne double act tell us that the defence budget is keeping place with inflation. That, though, is domestic inflation and it is well known that defence equipment inflation rates are significantly higher. Add to this compensation payments for injuries, unfair treatment, you name it; and the budget gets thinner and thinner.

[tucumseh]

GBZ

Thank you, and you in turn highlight one of the main reasons why the Defence budget has fallen in real terms. The way the Government calculates, and then applies, inflation. Long ago, far away, we used to get increases in funding based on DTI Indices. So, if you managed avionic production projects, you got a certain increase - typically around 5% above headline inflation. Financiers/Beancounters will say I'm over simplifying but they always conveniently forget that they don't manage the funding, project managers do. They have authority but no responsibility. It is the PMs who have to explain to the Users why quantities and specifications are being cut.

The best project managers are those who have worked their way way back through the procurement cycle. If you haven't, how on earth can you initiate properly? You can't possibly understand the real issues affecting the in service phase, which accounts for upwards of 80% of through life costs. You can almost always tell a PMs background by what goes wrong with a project, and conversely predict from his c.v. what will go wrong.

[GlosMikeP]

Even so, without the cash there in the first place problems will occur and may have unforeseen consequences in the longer term.

Sheer shortage of cash is a common theme, if not explicitly then implicitly, in many of the current threads. No amount of good PM or infrastructure can overcome such obstacles.

One thread I looked at this afternoon mentioned (perhaps scaremongeringly, but then I don't really know) that there are rumours cash for ammunition may run out in Dec. I somehow think that even if this is true, priorities will be re-assigned and the bullets will keep moving- but that means something else will have taken a cash hit that is also important.

Sooner or later these 'small' deficits build into a bow-wave of increasing amplitude. Cash + infrastructure + competent PM = happiness and safety.

[South Bound]

While I do not agree with his timing, Col Collins made this point on the news over the weekend - operations should be fully funded. If we spend more on ammunition because we are using more, then more money should come from Treasury rather than other areas of the Defence budget.

Of course, we do need to ask for it....

[GlosMikeP]

While I do not agree with his timing, Col Collins made this point on the news over the weekend - operations should be fully funded. If we spend more on ammunition because we are using more, then more money should come from Treasury rather than other areas of the Defence budget.

Of course, we do need to ask for it....

Now there's the rub. The points I made earlier come to mind, alog the lines it needs someone at defence chiefs level to say something highly public that we're running into dangerous waters.

The trouble is the serviceman's attitude is always to do their best no matter how bad it gets. But someone should know when it's time to wave the flag, and I think we're after the whistle blow now.

(Although I take and accept your specific private points Tucumseh! Unarguable.)