Getting a ‘grip’ – Funding Defence Leadership Not Rocket Science

DS has been following, researching, inputting to and commenting upon UK Strategy and Defence issues for many years, including two major Strategic Defence and Security Reviews (SDSR 2010 and 2015). A nadir was reached following SDSR 2010 and, although SDSR 2015 offered much to approve of, it was still a case of ‘jam tomorrow’ where government aspirations were not matched by the reality. Indeed, despite comforting words about the level of defence spending “we are spending £178bn on procurement over 10 years” the downward spiral in the numbers of personnel and assets continues unabated. To paraphrase a former Chief of the Defence Staff in the House of Lords debate recently, ‘Quality is fine so long as you have enough of it’.

Underpinning much of what DS assesses wrong with UK defence planning and execution is an adequate supply of planned money. However, unlike some that press for an increase in Gross Domestic Product (GDP) for defence, DS is more circumspect on the point. We strongly believe that whilst more money for defence would be welcome, before more is allocated, HMG/MOD must undertake a ‘Reality Check’ into how wisely the current allocation is being used, where the most serious gaps are and how much is needed to fill them. To this end DS opens this debate with a short paper exploring Professional Service and Political Leadership and Principles that should underpin defence spending.

 

Getting a ‘grip’ – Funding Defence Leadership Not Rocket Science

Summary

Who would want to be a government minister? It seems that every day a spokesman or woman, association, union, royal college or politician joins the queue to harangue Her Majesty’s Government (HMG) for more money. Health, education, local government, law and order, the arts, environment, energy, infrastructure and yes, in defence too, the instant solution to any problem is, more often than not, a cry for more cash.

In this febrile atmosphere opposition parties in particular jump on the extra cash bandwagon conveniently ignoring that there is a limited pot of revenue from tax and borrowing and, depending upon party priorities, the cloth will be cut accordingly. Is it any wonder that politicians on the government benches seem reluctant to confront the obvious case for cutting and using the cloth that can be afforded in more innovative ways?

In the case of Defence more money is always welcome but unless the budget can be managed and used more wisely the danger is that the ever increasing price of major ticket items will continue to fuel a descending spiral where more money buys less hardware and personnel numbers suffer because they are an easy hit. Simply asking for a higher percentage of Gross Domestic Product (GDP) does nothing to ensure capability if underlying systemic problems are not addressed first.

In this short paper DS focusses on Funding Defence but arguably the methodology could be adopted by other departments. Moreover, as what is proposed is not rocket science, this paper will not be long winded nor will it be full of statistics and esoteric facts. It will focus upon five principles that DS believes are essential if the Ministry of Defence (MOD) – other government departments too – are to maximise value for money from budget allocation as follows:

1. The first principle is Professional Leadership – A department structured and manned by those with a full understanding of the principles of and requirements for the defence and security of the realm.

2. The second principle is understanding the Operational Requirements that defence is required to achieve rather than a nugatory focus on INPUT.

3. The third principle is an acceptance that Money is Finite and MOD, especially defence procurement, must maximise operational capability and negotiate tight contracts extremely robustly with industry.

4. The fourth principle is An Integrated Approach – the Whole Force Effect concept.

5. The fifth principle is Flexibility – agility of mind, agility of requirement, agility of design, and an ability to accept that circumstances change and require adaptive reasoning.

 

Main Discussion – Putting the Principles into Affect

Much has already been written, said and done to reorganise Defence management structures. Suffice to say here that once the consultants, politicians and analysts have made their inputs and the MOD has shuffled the deck the natural hierarchical order remains. The British Armed Forces are rightly not a democracy but a disciplined force with a top down Tri-service rank structure having at its head an appointed single service Chief of the Defence Staff (CDS). Therefore, one would assume that establishing inter-service Professional Leadership would be the least of MOD’s worries. Sadly that does not seem to be the case. It is unclear from the many MOD Head Office committees and the interaction between MOD Head Office and the commanders in chief, how CDS ensures combat Capability coherence across the military chain of command (in the traditional military direct command sense) of the, now four, Service Commands (RN, Army, RAF, JtCmd). Without a truly ‘Joint’, a-partisan, and MOD-wide experienced CDS at the pinnacle of the military command chain having dominion and direct command authority over all Top Level Budget holders, this negates any ‘levelling of playing fields’ that is required to minimise internal in-fighting. Inter-service rivalry has always been with us, but seemingly more intense today as budgets get ever tighter, fewer equipments are evermore expensive per item, and manpower numbers are decimated to pay for equipment.

In the case of MOD the leadership pressures and strains are further amplified by ministerial (political) interference and the very strong influence of an alien, funding-focussed, civil service culture. Speaking truth unto power at all levels in the chain of command can be career defining and requires professional moral fortitude, not always encouraged or supported by higher authority. And, perversely, given that staff within MOD rotate so frequently, holding a responsible individual to account has proved to be so problematic the issue probably deserves an investigation and command paper in its own right.

However, without ‘Professional Leadership and an a-partisan direct chain of command from CDS downward into the higher level of command and political leadership, the other four principles immediately start to unravel. Once attention is focussed on single Service budget survival (what’s in it for the Force Level Commander) then INPUT not Operational Requirement takes priority. This focus on INPUTS is driven by the one universal principle that everyone seems to remember, Money is Finite (or is that Money is Fiefdom?). Therefore, lack of Professional Leadership, some might might say lack of Tri-service commitment and guidance, negatively impacts inter-service integration thus forcing subordinate leaders to choose between their Service careers and the flexibility of thought required to drive and support ‘The Whole Force Effect concept’ – what DS calls in procurement a ‘system of systems’ approach to delivering the desired Operational Effect or Output.

The latter can be illustrated by HMG’s decision to buy the Queen Elizabeth Class (QEC) aircraft carriers. A ‘system of systems’ approach to this particular procurement would have responded to the strategic Operational Requirement (OR) to provide carrier strike to enable UK defence policy for worldwide force projection. Instead, a lack of Professional Leadership led to single Service rivalries intervening thereby unlinking the ship budget, design, build and time lines from the integral fixed and rotary wing air components, the carrier group support and escort vessels, no air-to-air refuelling capability for F-35Bs, and the Cooperative Engagement Capability (CEC) communications infrastructure to link and exploit the desired smart ‘sensor-to-shooter’ combat leverage. The ship, strike aircraft and helicopter borne Airborne Early Warning (AEW) components all having independent project teams, budget lines and in service dates (ISD) is it any wonder that CEC was not procured, and escort and support ships numbers were minimised or delayed. Indeed, it can be argued that a ‘system of systems’ approach would have embedded the design requirement for the QEC to have catapults and arrester gear at some point in its planned 40 year life span. Instead the result has been a disjointed and far less flexible procurement chain, leading to significant operational capability and flexibility loss, and the very limited ‘Carrier Strike Capability’ actually acquired becoming much more expensive across the board than originally budgeted. It also leads to a Type 26 Frigate programme of>£1bn per ship from UK industry, when a Danish Iver Huitfeldt Frigate costs £350M for comparable capability.

What, you may ask, has this to do with MOD value for money? We argue: everything! Unambiguous top down leadership imbues subordinates with common strategy, culture, goals and aspirations that defuse the propensity for inter-service rivalry – what in military doctrine might be described as ‘Understanding the Commander’s Intent’ and ‘Maintenance of the Aim’. But failure in these key areas inculcates a ‘my Service first’, continual requirement change and mission creep attitude, ‘not my responsibility’ carelessness, linked to a ‘not invented here’ approach which prevents true ‘system of systems’ delivery, thereby undermining ‘The Whole Force Effect concept’ doctrine.

In the process contractors find themselves confused when design cohesion is muddled and, lacking confidence in what, when and even how many their MOD customer requires, resort to building in ‘change risk buffers’ and price inflation to compensate for the induced uncertainty and inevitable programme delays as finance mandarins battle the annual challenges placed on departments by the piecemeal yearly cash handouts from the Treasury. Worse still, they inflate prices because the MOD customer, often driven by political diktat, is not intelligent enough or simply not empowered to challenge absurdity and obviously unrealistic pricing structures or contract terms.

Conclusion

DS concludes that despite an increasing Defence procurement budget – £178bn over 10 years – a lack of Professional Leadership at the political and command level has led to a form of inter-Service and commercial protectionism that stifles innovative and cost effective Tri-service defence delivery. This in turn, abetted by unimaginative requirement design and governance, and poor project management skills, has created circumstances where UK contractors charge higher rates for their products and services than the wider world market, and a smarter and more aggressive military customer, might bare. As a consequence, the procurement budget is effectively out of control, especially in respect of high end major projects. Type 26, QEC, F35b Lightning II, Trident submarine replacement, are absorbing ever increasing slices of the stagnant total budget – thereby affecting all other areas of defence spend. We see the consequences in those areas which are easier targets for savings but that have lower public visibility: manpower reduced across all 3 services; Royal Navy support ships decommissioned early despite recent expensive refits; surface escorts having anti-ship missiles removed; Royal Air Force fast jets mothballed or not combat ready; infrastructure crumbling; across the board sustainment and maintenance stocks reduced; and a shortage of technically qualified personnel to operate what we do have. And rarely is anyone, Service, Civil Service or politician, held to account.

This catalogue of failings only covers the extant Armed Forces – it does not include the Capability opportunity lost because of the lack of Professional leadership. For example, if the right Tri-service funding formula had been found for QEC at the outset it could have been equipped for catapult launch and arrested landings, thereby opening up the Air Group to less expensive aircraft types than the short take-off vertical landing F35B. The AEW cover for the fleet would have been more capable than relying upon restricted helicopter operations, carrier aircraft combat endurance could have been extended with organic air-to-air refuelling, and the carriers would have been future proofed to operate the heavy unmanned air systems that are being developed. Money saved in procurement costs could have been used to ensure appropriate personnel levels, instead of reducing them. Ultimately Capability opportunity lost for lack of funds leads to aspirations overtaking reality. For example: The ability of UK to meet its stated strategic intentions to deploy an Army division (up to 50,000 troops with armour, artillery, combat support, combat service support, Ground-based Air Defence, air cover, etc) is called into question. With the air and maritime logistic enablers funded in SDSR 2015, unless the assumption is that this Force will have several months to assemble, transit and arrive safely in the unopposed designated theatre of operations using commercial carriers (if available and affordable), these Forces, being based in UK, are going nowhere fast.

However, not all of the above is solvable within the current budget. For instance, enhancement to enable organic logistic mobility for a UK Divisional deployment will require extra funding and resources. But with strategically intelligent leadership driving and empowering subordinates to think ‘Whole Force’ not just ‘My Force’ and bearing down on selfinduced cost escalation, the money saved for other Defence budget lines could be enormous.

Think on this: The Danes build a 6500 tonne, 30 knot top speed, >9000 nautical mile operating range, frigate (fully fitted with self-defence and Air Defence and Anti-submarine warfare) for circa £350m, the BAE Systems equivalent, the 6900 tonne Type 26, is slated to be £1bn plus with a lower top speed of 26 knots, a reduced range of 7000 NM. Now, a blind man must see that if the MOD want value for money anything over £500m for a T26 Frigate (ASW variant) is ridiculous, even if the tired mantra to excuse more expense by ‘better Capability’ is used. At this rate eight T26 at £500M each (instead of >1Bn) = a saving of £4bn plus. But, without Professional leadership these sorts of potential savings will not accrue and, of course, nobody will be held to account: thus, there is no incentive to improve the MOD decision making and money spending attitudes and outcome-based effects.

Finally, as we said at the outset, more money for defence would be welcome, but to what end if systemic failure to spend the money wisely has not been addressed first?