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MPs warn over defence cost-cutting
Mass job cuts at the Ministry of Defence (MoD) are being determined by short-term cost-cutting, not long-term military needs, MPs have warned.
In a critical report, the Public Accounts Committee said plans to reduce the civilian workforce by 29,000 and military personnel by 25,000 were being pushed through without a proper understanding of what skills would be required in the future.
While the move will save £4.1 billion by 2015 it could also fuel spending on outside consultants, which has already soared from £6 million to £270 million in just four years, the MPs warned.
But they said they were encouraged by the MoD's attempts to tackle poor staff morale, which it had acknowledged was "not in a good place" as a result of the changes.
Margaret Hodge, who chairs the committee, said: "The Ministry of Defence has gone ahead with cuts to its military and civilian workforce without a proper understanding of what skills it will need in the future. We recognise that the MoD must make tough financial decisions if it is to reduce its spending by 7.5% a year by 2015, and that it has acted decisively.
"But we are concerned that these cuts have been determined by the need to cut costs in the short term rather than by considering the MoD's strategic objectives in the long term and the skills it will need to deliver them successfully.
"If the department loses key skills, it may have to spend even more money on replacing them, perhaps by buying them in from external consultants. Spending on consultants is already soaring, from £6 million in 2006-07 to £270 million in 2010-11. This would not represent value for money.
"We welcome the department's candour about how these cuts are affecting staff morale. That morale is low when jobs are threatened is unsurprising, but it is encouraging to see the department take active steps to improve the way it communicates with its staff on the need for change."
The MoD was ordered to cut annual spending by 7.5% in real terms by 2015 as part of the Government's deficit reduction plans.
MPs said that while future priorities had been set out in the Strategic Defence and Security Review in 2010, the job cuts were going ahead before detailed operating plans had been finalised.