MGD - no one I know denies there is a major problem in defence right now - but I think you dramatically overestimate the influence the average CS actually has. The majority of CS are admin officials - people who exist to do the crud that needs to be done by someone to keep HM Forces running, and they really don't have any influence at all.
The number of CS in positions of real power is very low, as unsurprisingly all the main posts relating to operations and decision making seem to be occupied by HM Forces (e.g. all decisions on cuts are made and taken by military personnel). The only really dangerous ones aren't actually CS, but are the Ministers Political Advisors (not POLADS), who provide the political spin to the Ministers, and who really don't have a clue about defence. Thankfully these apparatchiks are Labour party hacks and not CS.
The problem we have, and by this i mean HM Forces and MOD CS is that we have a public 'can do atttitude', and we don't like to admit that we can't do something. We all privately know that Defence is utterly shagged and financially broken, but no one at a level that matters will admit so openly - I think its because we're too proud to admit something is wrong.