TAVRAs
- The TAVRAs are an essential component of the Reserve Forces and Cadets management structure. They provide an important link between society and the Armed Forces by involving local communities in the support for and running of Reserve and Cadet units.
- But the TAVRAs must be kept up to date if they are to provide the Reserve Forces with the support they need. The SDR is therefore making changes to the TAVRA system to reflect:
- the increasing integration of Army regulars and reservists;
- the need to enhance the lines of accountability, responsibility and personal delegated authority.
- The main points are:
- the TAVRA administrative areas will be brought into line with the Army's regional command structure;
- TAVRAs will consequently reduce in number from the present 14;
- funding for the TA and Army Cadet Force executive functions will be delegated through the appropriate local Divisional/District Commander. Budget arrangements for the RN and RAF will be unchanged;
- the TAVRAs, the single Services, the National Employers Liaison Committee, cadet organisations and other interested parties will be consulted throughout the planning and implementation of the reorganisation.
Cadets
- Although cadet organisations have not been specifically included in the scope of the SDR, some of its measures may affect them. Areas of potential impact include the support received by cadets from the Reserve Forces and from local TAVRAs, especially accommodation within TA centres. Where a TA Centre is affected by the Review, alternative arrangements will be made to provide for the cadets.
- Whilst it is too early to predict what the SDR implementation process will recommend in this area, Ministers have consistently expressed their commitment to what are recognised as major national youth organisations, and have stated that their existence and ethos must be preserved. As part of that commitment, staffs involved in the SDR implementation process have been made aware of the need to safeguard cadets' interests and to ensure that any impact upon them is kept to a minimum. In the meantime, we are planning to make a modest increase in planned expenditure on the cadets.
CHIEF OF DEFENCE LOGISTICS
- The SDR has emphasised the increasing need for joint operations in the modern world. This shift in emphasis means that defence logistics must be organised to provide increasingly unified support as our front line maritime, ground and air forces work increasingly together.
- Much has been done in recent years to rationalise single service logistics areas and to increase cooperation between the Services. However, our three current logistics systems remain separate and scope exists to improve the delivery of logistic support through more unified arrangements.
- A Chief of Defence Logistics (CDL) will therefore be created to bring together the logistic support areas of all three services to deliver joint support to combat forces. CDL will be a four star military officer whose tasks will be:
- to develop a unified logistics organisation;
- to harmonise logistics systems and spread best practice;
- to develop a common approach to supporting front line forces without diluting the diversity necessary to support operations at sea, on land and in the air;
- to deliver the benefits of the Smart Procurement Initiative (see separate fact sheet) within the logistics area;
- to ensure a common approach to industry in the support area.
- CDL will provide support to front line forces but on a joint, defence-wide basis. The single Service Commanders in Chief will continue to have responsibility for the logistic capability which forms part of our front line forces.
- As the holder of the largest budget in the MOD, CDL will have the authority to act as the central focus for logistic issues at the highest level.
- The introduction of CDL is a very significant change which will take time to complete. The following steps are currently planned:
- CDL (designate) will be nominated shortly to take charge of an implementation team to complete preparatory work;
- CDL will take up the formal appointment on 1 April 1999, assuming responsibility for the work and financial expenditure of the three existing support organisations (headed by the Chief of Fleet Support, Quartermaster General and Air Member for Logistics), whilst developing plans for a unified organisation;
- From 1 April 1999 CDL will report directly to the Chief of the Defence Staff.
- There is much to be done in developing the CDL concept. Once in post, CDL will examine the detailed way ahead in conjunction with the Chief of Fleet Support, Quarter Master General and Air Member for Logistics, and there will be full consultation as plans develop further.
- The creation of CDL is a change of the greatest strategic significance to defence. It will ensure that our management and delivery of logistics enables us to provide effective support to joint operations in the next century.
DEFENCE LOGISTICS
- Logistics is a key enabler of military capability, particularly in support of deployed forces. Enhancing our logistic support has been one of the main themes of the SDR.
- We plan to improve defence logistics capability in both the operational and base support areas.
- For operational logistics this will mean:
- increased holdings of some weapons and spares;
- creating additional support units to sustain two concurrent operations using separate lines of communication;
- providing support for deployed air operations at a range of operating bases;
- establishing enhanced joint structures for the control of logistic support in theatre, including the creation of Joint Force Logistic Component Headquarters with integral communication and information systems.
- In the base support area, there will be an increasing emphasis on joint or lead-service arrangements. These will include:
- creation of a Chief of Defence Logistics to provide a defence-wide support organisation which can build on recent work to rationalise single Service support areas and maximise cooperation between the Services (this is set out in detail in a separate fact sheet);
- improvements in equipment procurement practices through the implementation of the new processes and procedures identified by the Smart Procurement Initiative;
- greater use of IT to converge processes and systems within the support area;
- a significant reduction in stockholdings and a move to a demand led system, based on the assumption that stocks should only be held when they cannot be regenerated within the readiness time of the forces they are to support;
- creation of defence-wide organisations to provide aircraft repair, storage and distribution, transport and movements and the management of fuels and lubricants for the three Services (see the separate fact sheet on Defence Agencies).
- In sum, there will be major enhancements in sustainability which, combined with improved strategic lift and an increasingly rationalised and coherent logistics base, will provide the building blocks necessary for the successful support of joint operations into the next century.
DEFENCE MEDICAL SERVICES
- The Armed Forces must be properly supported in the field. A key aspect of this is the provision of timely, modern and effective medical support.
- Shortfalls in personnel and equipment have reduced the ability of the Defence Medical Services to support substantial deployed operations effectively. The Government has therefore made enhancements to our medical capabilities an important theme in the SDR.
- A series of operational enhancements are planned to restore the capability of the Defence Medical Services. These include:
- addressing current personnel and equipment shortfalls across all three Services as a matter of priority;
- procurement of a 200-bed primary casualty receiving ship, with a second one available on contract at longer notice if required;
- ensuring that an additional 800 field hospital beds are available at a guaranteed higher readiness, along with their appropriate surgical and other support;
- enhancing the Army's Regular ambulance evacuation capability;
- establishing a Regular operational medical supply organisation;
- providing an additional Regular RAF aeromedical evacuation flight and 18 air escort flights;
- enhancing our capability to provide Regular medical support for deployed operating bases and support helicopters.
- In peacetime, operational military hospital personnel work in the Defence Secondary Care Agency. Shortfalls in personnel have meant that they are spending too little time at home between operational deployments. And many of those who work closely with the National Health Service have difficulty in maintaining their military training and ethos.
- A further series of enhancements will therefore be targeted specifically at the Defence Secondary Care Agency, including:
- the recruitment of approximately 250 hospital specialists, nurses, technicians and other personnel to bring the Agency up to its establishment;
- renegotiation of the MOD hospital unit contracts with NHS Trusts to allow personnel more time for military activities;
- better access to mess facilities and accommodation for all ranks;
- funding to enable potential recruits to be medically evaluated more quickly by specialists when required;
- enhancement of the community psychiatry service.
- In restoring the capability of the Defence Medical Services, there will be a vital role for medical personnel of the Royal Naval Reserve, the Territorial Army and the Royal Auxiliary Air Force. We will rely increasingly on their skills and dedication, both as volunteers and through compulsory call-up in times of crisis. For example, it is envisaged that a major overseas operation of the scale of the British contribution to operations in the Gulf in 1990/91 would involve the compulsory mobilisation of reserve medical personnel.
- We are committed to restoring operational medical capability to the required level as soon as possible, and a major investment will be made to achieve it. We recognise, however, that recruiting and retention uncertainties mean that in some areas the remedial programme will be a long-term undertaking.
DEFENCE AGENCIES
- 44 defence agencies (plus two candidate agencies) now provide the bulk of defence support. They already employ 30,000 Service personnel and 63,000 civilian staff, as well as contractors, and account for over a quarter of the defence budget.
- The SDR's drive to extend defence-wide approaches will involve some re-organisation of defence agencies in the logistics field.
- This means:
- creating a Defence Aviation Repair Agency (DARA) by 1 April 1999, bringing together all third line aviation repair activity. DARA will later become a trading fund, receiving its funding from departmental and other customers rather than directly from Defence Votes;
- creating a Defence Transport and Movements organisation with responsibility for land, sea and air movements, subsuming the responsibilities of the Defence Transport and Movements Executive, the Air Movements Executive, and the Joint Transport and Movements Staff;
- bringing together all storage, processing and distribution activity into:
* a Defence Storage and Distribution Agency for non-explosive stores under the Quartermaster General; and
* a division of the Naval Bases and Supply Agency handling all explosives storage and distribution
By 2004/05, the aim is to establish a single Defence-wide storage and distribution Agency;
- completing studies into the best way of developing the Defence Evaluation and Research Agency's capabilities in conjunction with those of the private sector, and pursuing the concept of a Defence Diversification Agency to encourage transfer of technology to and from industry;
- developing the Procurement Executive as a Defence Agency, as part of the wider reforms of the equipment acquisition organisation;
- completing studies in the other remaining candidate areas for defence agency status, the Army and RAF equipment support organisations.
- These measures will
- produce further efficiencies which, across defence agencies, will be running at a rate significantly higher than the level for the rest of Defence over the next four years;
- make a significant contribution to the spread of activity controlled or run on a defencewide basis.
- In addition, to achieve yet better quality of performance or lower costs, we will:
- develop more sharply focused methods of measuring and targeting agency performance;
- encourage the spread of best practice through benchmarking projects and the appointment of experienced external members to agency and owners' boards;
- introduce improved approaches to the higher, strategic management of agencies.
- The addition of the Procurement Executive to the list of agency candidates will bring over half the defence budget under the control of defence agencies.
- Agencies are here to stay. They are the cutting edge of the drive for improved management and greater efficiency in defence.
PROCUREMENT EXECUTIVE
- The Procurement Executive will remain an integral part of the Ministry of Defence with responsibility for procurement of new major equipment as directed by Ministers, the Financial and Management Planning Group and the Equipment Approvals Committee.
- Project Management, Finance and Contracts and support staff have recently been collocated at Abbey Wood in purpose built accommodation equipped with an up to date IT system.
- While many projects run successfully to time and within budget, others suffer considerable time and cost over-runs and action is needed to remedy this.
- The Smart Procurement Initiative produced a package of new tools which recognise that procurement of new equipment is central to the capability of the Armed Forces.
- It also identified the structural changes necessary to take advantage of this approach.
- This work was conducted by mixed teams from MOD, Industry and consultants McKinsey & Co. They went back to first principles and considered whether MOD needs to have a specialist acquisition organisation or could safely leave the whole task to the private sector. Scope was identified for outsourcing more acquisition of routine items (e.g. IT catalogue, general stores) and specific functions; but for complex projects MOD, like other managers of large projects, needs to keep core management in-house while buying in specific skills.
- Ownership - various options were considered by Ministers for ownership of the Procurement Executive. The key was to achieve greater clarity in customer/supplier relationships within the rest of MOD, and greater flexibility in personnel matters, whilst not reducing scope for interchanges with the rest of MOD.
- Privatisation, while giving greater access to private sector expertise and incentives, was not seen as a feasible option for an organisation that needed to be close to its military customers and bring together a wide range of interests through the Single Team concept.
- The Procurement Executive already has many of the technical features of an agency and could change status quickly. A key issue was whether the relationship between Ministers reflected in the 'Framework Document' could cover all the complex factors that can affect an individual equipment decision as well as value-for-money.
- Industry saw procurement as an in-house function for MOD.
- This reconfigured PE will have as its heart Integrated Project Teams which will use Smart Procurement tools.
- Core staff for the teams will be drawn from an Acquisition Stream bringing together staff involved in the full spectrum of the defence acquisition business process, from the earliest stages of requirement formulation to the final disposal of obsolete equipment. The team will include military officers responsible for operational requirements issues. It would stay intact through a project's life moving to the Logistics area at around the time an equipment enters service.
- The team will have a customer-supplier relationship with a Central Customer, who will define the high-level mission need.
- Fundamental to the support of such an Acquisition Stream will be the definition of a comprehensive set of new processes and functional competences covering the Systems, Procurement and Logistics areas.
- In parallel with this, training courses, (including joint training with industry), staff development schemes, and interchange and secondment programmes will be developed to support the function, and equip staff to meet the needs of the new organisations and processes.
- We anticipate a reduction in PE operating costs of around 20% by 2001/02. Manpower implications have yet to be finalised but will clearly contribute a major element of the planned savings.
CHANGES IN DEFENCE PROCUREMENT
- MOD has a duty to get value for money for the taxpayer by making sure that its acquisition processes and organisation provide the right equipment, at the right time and for the right price.
- Unfortunately we do not always get it right. There was a clear need for the SDR to examine the reasons why many major programmes suffer considerable delays and cost over-runs.
- The Smart Procurement Initiative was a joint exercise with industry which focused on processes and produced a package of measures which recognise that equipment procurement is a MOD-wide process. An initial exercise identified some new procurement methods:
- incremental acquisition: by not trying to achieve too much when the equipment is first brought into service, risks are reduced and it can be produced more quickly and more cheaply. Once in service it can be upgraded;
- putting in more effort early on in projects so they can be planned better and risks reduced;
- moving to a new partnering arrangement with industry: We now need to work closely with industry to resolve problems, so partnership is now a key theme.
- The Smart Procurement Initiative was the strand of the SDR which looked fundamentally at the MOD's acquisition processes and organisation. Its key elements are:
- a single integrated team for each project within MOD, bringing together all stakeholders and involving industry (except during competition phases) under a team leader able to balance trade-offs between performance, cost and time within boundaries set by the approving authority;
- streamlining processes and tailoring them to different types of acquisition. There would be three tiers:
- making sure that the customer within the MOD is clearly identified at all stages of the project. This may sound obvious but the MOD's complex approvals systems have often resulted in tortuous and sometimes ineffective relationships between acquisition staff and customers.
* Tier I - for smaller items and in-service support, good commercial practice will be followed by streamlining, using credit cards or cash for minor purchases. Industry will be relied upon a lot more for support; in some cases the complete operation might be outsourced.
* Tier II - for smaller projects there will be a single integrated team approach including industry, but much will be done to make systems more flexible and less paper-driven with fewer reviews by Committees and more authority devolved to the team leader.
* Tier III - for major projects (including those involving collaboration) we will also use the integrated team approach;
- Around these key new ways of doing business - single teams and streamlined processes - some organisational changes are being addressed.
- The main question was whether the MOD needs a specialist acquisition organisation at all. Could we just leave it to industry? The answer was that while scope for outsourcing the acquisition of routine items such as IT and general stores and some specific tasks was identified, it would not be appropriate for us to outsource all acquisition. For complex projects MOD, like the managers of large projects within the private sector, needs to keep core management in-house although it would buy in specialist skills.
- To make sure that these changes actually happen there will be:
- a full-time implementation team including industry and limited consultancy support. This will not be another unnecessary layer of bureaucracy as there is evidence in MOD that such a team will stimulate and promote change;
- development of an acquisition function for both military and civilian staff which would provide core personnel for the integrated project teams. This will be supported by training and personal development and there will be increased interchanges with industry; it should be a two way process with industry people spending time in MOD;
- close definition and monitoring of processes backed by clear performance measures;
- more effort will be focused on the early stages of a project which will have only "candidate" status until the major investment decision;
- a continued Ministerial lead.
MOD HEAD OFFICE
- There will be important changes to the top level budget structure:
- the VCDS and 2nd PUS Top Level Budgets (TLBs) will be merged into a single centre TLB;
- the Chief of Joint Operations will become a separate TLB-holder;
- a range of corporate and personnel services (including a number of joint Service and defence-wide Agencies) will remain in the central TLB, together with the central staff;
- revised management arrangements will allow better allocation of resources.
- The way in which we manage the forward equipment programme will also change:
- as a result of the Smart Procurement Initiative, MOD Head Office will assume a more clearly defined role as the "customer" for the defence equipment programme before such equipment enters service;
- equipment capabilities will be "supplied" by new integrated project teams, which will operate under procedures and managerial oversight supplied by the Procurement Executive until the equipment enters service;
- some staff in the current Head Office equipment systems area will form part of the integrated project teams.
- A new post of Chief of Defence Logistics will be established to maximise the scope for the rationalisation and convergence of defence-wide logistic support.
- A new Joint Defence Centre will be created to develop a joint approach to the development of defence doctrine. It may also take on other tasks. A study into its role and location is under way.
- These are important changes that we believe will make a major improvement in the management of defence.
- The precise implications will take time to work through but there are likely to be some further reductions in staff levels, to implement the changes and departmental efficiency targets.
- Head Office in London will eventually be housed in two buildings. The project to refurbish Main Building will not be affected by the SDR.
DEFENCE ESTATE
- The defence estate is an important defence asset. Its future size will be determined by our changing operational requirements; but any savings we can make help to fund additional military capability.
- As part of the SDR we have therefore conducted a thorough review of our estate holdings, concentrating on the built estate and higher value properties. This has taken into account the changing requirements identified in the SDR and the substantial reductions already in the pipeline.
- In the London area:
- the Duke of York's Headquarters in Chelsea will be sold to the private sector and its occupants re-accommodated as necessary;
- we plan also to dispose of Millbank Barracks, plus some smaller sites;
- Chelsea Barracks will be reprovided (not necessarily on its present site) through a public/private partnership project;
- London headquarters office buildings are now planned to reduce from seven to two (Main Building and Old War Office) by 2004, when Main Building redevelopment is complete;
- we are drawing up a strategic development plan for London properties (including consideration of future requirements at RAF Northolt and RAF Uxbridge, and other major sites in the Greater London area).
Other major disposal plans now include:
- parts of the Army sites at Chilwell and Woolwich;
- storage and support sites at Didcot, Malvern, Old Dalby, Thatcham and RAF Cardington;
- parts of DERA sites at Bromley, Chertsey (north site) and Farnborough (Queen's Gate);
- office accommodation leases in the Bath area; and
- surplus land at various MOD establishments
- Alternative accommodation will be provided for Service and civilian personnel where necessary. Trade unions have been, or will be, consulted on implications for civilians.
- Training land. A shortfall in training land had been identified before the SDR and there is no scope for major reductions at present. The implications of the SDR for military training and rural estate strategy will now be assessed, and we shall seek the views of environmental and conservation bodies on our rural estate strategy.
- As part of this strand of SDR work, we have concluded that more effective central strategic management of the defence estate is needed:
- to ensure maximum value for money for defence; and
- to keep utilisation of the estate under review and identify further opportunities for disposals, the sharing of facilities and the concentration of smaller units when appropriate on larger sites.
Management areas will, however, remain fully accountable for the property that they occupy and for funding it.
- This has been an important part of the SDR, not least in identifying areas in which we can make savings to help fund higher priorities across defence.
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