Wednesday, August 05, 2009

Making the point

One does not need to dwell too long on this. Channel 4 News this evening ran as its lead an item on an internal MoD report which reveals that £2.5 billion is being wasted on equipment each year.

This is a report by Bernard Gray, a former MoD official, commissioned by John Hutton last December. It was supposed to have been published before the Parliamentary recess but has been withheld, supposedly because it was "too embarrassing".

There is a brief summary in The Times which offers some limited detail, but since the report has not been published, there is very little to go on.

What the report does though is reinforce the thesis made again and again on this blog (and DOTR), that there is no cash shortage per se in defence. Simply, the budget is being chewed up by massive waste and inefficiencies.

Further, we argue that, even if there was a cash shortage, there would be no point in throwing money at defence. Given the dire state of this department, all that would happen is that it would waste even more.

Clearly, the case is made for a massive reform of the MoD, not only in terms of how it spends money – which, I suspect is the focus of Gray's report – but also what it is spent on.

In the interim, however, we need to kick the mantra of "underfunding" into touch. Sort out the waste and incompetence – and then look at the department again, with a critical eye, working out what is really needed and how to deliver value for money.

And we can understand Liam Fox wanting to make political points – as he does here, saying that: "This is a damning indictment of twelve years of incompetence. By trying to suppress this report, the Prime Minister has demonstrated that he cares more about the reputation of Labour than he does about the wellbeing of the Armed Forces."

Fox, however, needs to display a little more sophistication, if not sense. Many of the procurement issues that are currently draining funds started under the Conservative watch – and John Major's Tories left the procurement system in a colossal mess.

He needs to understand that getting value for money out of defence has defeated virtually every government since the war – irrespective of party – and thus should be looking for the systemic faults, rather than making cheap points. In less than a year's time, he or his successor is going to be in the hot seat and exactly the same problems are going to materialise. Creating hostages to fortune at this stage is not going to make the reform task any easier.