COMMONS

Army 2020: adequate consultation was not carried out by MOD

05 September 2014

Public Accounts Committee publishes its report into Army 2020 as HC 104, Eleventh Report of Session 2014-15

The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, today said:

"It is astonishing that the Ministry of Defence went ahead with plans to cut back the regular Army by 20,000 and increase the number of Reservists without testing whether this was doable and without properly consulting the Army itself.

The decision to reduce the size of the Army was driven by the need to make financial savings in a time of austerity. However, it is remarkable that the Chief of the General Staff was not involved in all stages of the decision-making process given the magnitude and importance of the change required, and its impact on the service which he commands.

The MoD did not test the feasibility of recruiting and training the 30,000 reserve soldiers it needs by 2019. The strength of the Army Reserve has stayed at around 19,000 for the last two years, and we remain to be convinced that the MoD will recruit the required numbers in time.

The Army told us that shortfalls in recruitment are increasing the risk of capability gaps emerging in some parts of the Army’s structure. This in turn increases the risk of additional pressure being placed on regular troops.

The Army’s recruiting partner, Capita, missed its regular soldier recruitment target by 30% in 2013-14 and recruited fewer than 2,000 reserves against a target of 6,000. Yet Capita was paid as though it had delivered the full 6,000.

“The MoD's bungling around the recruitment contract with Capita has meant at least £70 million of the planned £267 million savings from the contract have already been lost. There was no clear understanding of the scale of the recruitment challenge, poor information about potential recruits and the MoD did not provide Capita with the IT infrastructure it needed.

Army 2020's smaller Army will be even more vulnerable to the under-manning that was common before the recent conflicts in Iraq and Afghanistan, so it is wholly unacceptable that the MoD's current 'Plan B' is to get 'Plan A' to work.

What contingency plans we heard of could have long-term negative consequences. Extended tours of operational service for regulars, for example, could lead to lower morale and more people leaving the regular Army.

The Department prevented full Parliamentary scrutiny of its Army 2020 plans by withholding timely information from the National Audit Office. This must not happen again."

Margaret Hodge was speaking as the Committee published its 11th Report of this Session which, on the basis of evidence from: Jon Thompson, Permanent Secretary, Ministry of Defence; General Sir Peter Wall, Chief of the General Staff, Ministry of Defence; Dawn Marriott-Sims, Chief Operating Officer, Capita and Simon Fovargue, Vice President and General Manager, HP Public Sector Defence, ATLAS Consortium, examined the subject of Army 2020.

The Ministry of Defence (the Department) determined the future size of the Army based on the need to make financial savings while maintaining enough military capability to deliver required defence outputs. However, it did not adequately consult the Army on its plan to reduce the regular Army by around 20,000 and increase the Army Reserve, or fully assess the feasibility of that plan. The Army needs to increase the trained strength of the Army Reserve to 30,000 by 2019, but its strength has remained at around 19,000 for the last two years. The Army tells us that there will be an increased risk of capability gaps emerging in parts of the Army structure until it reaches the 30,000 reserve target. The Army has some mitigating actions it can take if recruitment performance does not improve, but it has not worked these into a fully developed contingency plan with clearly defined trigger points. The Army's recruitment contract with Capita was not established on the basis of a clear understanding of the scale of the recruitment challenge and at least £70 million of the planned £267 million savings from the contract have already been lost.

Conclusions and recommendations

Army 2020 is an ambitious programme of change and restructuring which responds to the Government's need to reduce public spending, including on defence. It seeks, for the first time, to integrate fully a regular Army of 82,500 with a larger and more frequently used Army Reserve of 30,000.

This represents a significant change from pre-2010 levels of some 102,000 trained regular soldiers and 19,000 trained reserve soldiers. The Department projects that this revised force size will reduce the cost of the Army by £10.6 billion between 2011–12 and 2021–22.
The Department did not test feasibility, or adequately consult the Army, before deciding to reduce the regular Army and increase the Army Reserve. We recognise that the decision to reduce the size of the Army was driven by the need to make financial savings in a time of austerity. However, it is remarkable that the Chief of the General Staff was not involved in all stages of the decision-making process given the magnitude and importance of the change required, and its impact on the service which he commands. We were also surprised to learn that the Department did not test the feasibility of recruiting and training the number of reserve soldiers it needs by 2019. The Department is confident that it can still recruit and train the required number of reserves by 2019, but we remain to be convinced given that its confidence is based on unevidenced assumptions.

Recommendation: For future significant reviews of the armed forces, the Department should involve relevant stakeholders fully in the decision-making process, and ensure adequate testing of the feasibility for proposed actions.

Shortfalls in Army recruitment are increasing the risk of capability gaps emerging in some parts of the Army's structure. To achieve the ambition of Army 2020, the Department needs to grow substantially the size of the Army Reserve. It also needs to reduce the size of the regular Army while at the same time recruiting enough regular soldiers to sustain the future Army structure. However, the Army's recruiting partner, Capita, missed its regular soldier recruitment target by 30% in 2013–14 and it recruited only around 2,000 reserves against a target of 6,000. A huge step up in performance is required if the Army is to hit its ambitious target of recruiting 9,270 new reserves in 2016–17. The size of the regular Army is reducing faster than originally planned but the size of the trained Army Reserve has not increased in the last two years because more people have left the reserve than joined. We are deeply concerned to hear that a capability gap could be emerging in some parts of the Army structure that could increase the risk of additional pressure being placed on regular units.

Recommendation: The Army should establish clear trigger points for enacting contingency measures if recruitment and retention rates are not improved and gaps emerge in the Army’s structure.

The Army lacks a fully developed contingency plan or clear criteria for using it if gaps emerge in the Army's structure. Army 2020's smaller Army will be even more vulnerable to the under-manning that was common before the recent conflicts in Iraq and Afghanistan, so it is wholly unacceptable that the Department;s current 'Plan B' is to get 'Plan A' to work. The Army has some mitigating actions it can take if recruitment performance does not improve, such as calling up ex-regular personal with a service liability or extending tour lengths for regulars, but it has not worked these into a fully developed contingency plan. The Army also acknowledges that some of its proposed mitigating actions could work in the short-term but may have long-term negative consequences, or be difficult to put into action. For example, extended tours of operational service for regulars would meet a short-term need to cover any gaps that emerge in the Army structure, but could lead to lower morale and more people leaving the regular Army, thereby exacerbating the problem. Additionally, the Army is not able to say with certainty that all those with a service liability are available to be used. Some 40% of the records the Army holds on these individuals do not contain details of medical fitness that would determine whether they could be used on operations.

Recommendation: The Department should evaluate the options available to it to address any gaps in military capability, assess their potential short-term and long-term impact on the Army, and develop a strategic contingency plan to respond.

The Department's approach to recruitment has put planned savings at risk and is not delivering value for money. The Army signed its contract with Capita before the Department took the decision to substantially increase the size of the Army Reserve. As a result, the Army's recruitment contract with Capita was not established on the basis of a clear understanding of the scale of recruitment challenge. The Army's poor management information also meant that it passed Capita 12,000 potential candidates for recruitment at the start of the contract rather than the 55,000 Capita had been led to expect, and half of the 12,000 were contacts from more than a year earlier and so were not all realistic prospects. The operation of the contract and the application of its performance regime were then undermined because Capita did not get the IT infrastructure it needed to deliver its contract, primarily because the Department and the Army failed to integrate their separate contracts with two suppliers. The Department acknowledges that this was unacceptable, and at least £70 million of the planned £267 million savings from the contract have already been lost. The Department has also had to pay Capita as though they met all of their recruitment targets in 2013–14 despite, for example, falling 4,000 short of its 6,000 target for reserve recruits.

Recommendation: The Department should ensure that it is able to hold Capita to account for its performance in delivering the Army recruitment contract, by finalising and agreeing an interim performance regime.

The Department prevented full Parliamentary scrutiny of its Army 2020 plans by withholding information from the National Audit Office. The Department claims it has evidence to support its confidence that it can increase the trained strength of the Army Reserve to 30,000 by 2019. We were shocked to read in the National Audit Office's report that it was unable to test these assumptions because the Department failed to make evidence available for audit. As a result, we can have no assurance that the Department's planning assumptions for reserve recruitment are reasonable and based on evidence. The Department was also unable to explain why, despite agreeing the facts in the National Audit Office report, defence officials subsequently briefed national newspapers criticising the evidence in the report.

Recommendation: The Department should fulfil its obligations for accountability to Parliament by making all evidence available for scrutiny in a timely manner and follow established convention in commenting on National Audit Office reports.

Further information

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