Select Committee on Defence Eighth Report


THE PROCESS

Intragovernmental Cooperation

66. One aspect of the 'open and inclusive' process of the SDR upon which the Secretary of State and other witnesses laid considerable stress was the inclusion of other government Departments in order to draw on 'the range of civil, diplomatic, economic and military means at our disposal'[190] so as to have 'armed forces which can operate in support of diplomacy alongside economic, trade and developmental levers'.[191] Certainly, we have found evidence of this cooperation in the process of forming the policy baseline of the SDR, particularly for example in the evidence from the Secretary of State for International Development. While we are grateful to the Minister of State at the Foreign and Commonwealth Office for having given evidence to us three times in this Session, we regret that the Foreign Secretary was unable to find time to lend his voice to explaining the context of the SDR to Parliament. While it seems that Stage 1 of the Review was a genuinely cross-governmental exercise, it is less clear that such interdepartmental cooperation fully informed the later stages of the Review. Some convincing attempt to demonstrate a better integration of departmental contributions to national security is needed. Sir Timothy Garden noted that—

    ... the SDR ... points out that the military capability is only one part of the security dimension and there are all sorts of other parts ... it is not clear that the process has been as thorough and as all consuming for the other sections of our security needs as it has [been] for the purely military.[192]

67. We referred above to the disappointment, shared by us, that the outline of a security policy was not published a year ago to provide a basis for wider debate during the ongoing process of the Review within the MoD. We return in the next section to a more detailed consideration of the Chapter of the SDR on Security Priorities in A Changing World, and the extent to which it fully represents an attempt to define an overarching security policy. However, we believe that a one-off demonstration of inter-departmental cooperation is not enough. Sir Michael Alexander, responding to a question about the durability of the SDR, said—

    I think that the discontented nations and groups ... are going to be prompted to move into a quite different kind of confrontation which is going to involve not the professional armed forces but the civilian populations ... in this context ...we are going to have to have a great deal more interdepartmental discussion in this country about how we deal with those kind of threats and a great deal more public education about how we deal with them.[193]

We agree. We are not convinced that the SDR process has initiated this interdepartmental discussion on how to respond to asymmetric threats on a consistent basis.

68. We discuss at some length later the financial settlement underpinning the SDR. The Secretary of State told us—

    The Treasury were involved right from the very beginning ... I wanted to avoid any ambush at the end of the process.[194]

When asked if this had been a successful strategy, the Secretary of State expressed the view that it had been.[195] He told us that he believed that—

    ... the settlement I have got allows me to deliver the package which I believe is right for the defence and security interests of this country ...[196]

and that—

    Whatever one's view or one's prejudice about the Treasury, the fact is that they did not at the end question the coherence of the outcome we produced.[197]

On the whole, on the evidence available to us, we find the claim that the Treasury did not mount a successful surprise attack on the force package element of the SDR in the last stages of the process convincing. This may be a tribute to the cross-departmental support for the process which arose from its inclusive nature, but we will not know this for certain until the memoirs of this government begin to be published. However, we do note that this modest victory over the Treasury was not achieved without some offer of a pre-emptive budget sacrifice, founded on significant asset sales and an increase in the efficiency savings target from 2% to 3% (see paragraphs 393 to 401 ), and that the MoD was one of the few departments to emerge from the Comprehensive Spending Review with a significant cut in its budget. When asked if the Treasury had left the budget intact after the MoD had concluded the SDR process on 27th March, the Secretary of State replied—

    [The Treasury] were able to insert their ideas, their suggestions, at every level within [the MoD's exercise][198] ... We had a tough discussion with Treasury Ministers about what was required to deliver our package. The Treasury are not simply going to [accept it] ... without asking some tough and searching questions about it.[199]

69. MoD's expenditure does not represent the full picture of the cost of security. The SDR acknowledges that the UK requires, 'an integrated external policy through which we can pursue our interests using all the instruments at our disposal, including diplomatic, developmental and military'.[200] Much of the expenditure of the Foreign and Commonwealth Office and Department for International Development could be counted in a broader definition of spending on the maintenance of international security and the protection of UK interests. Certain aspects of Department of Trade and Industry expenditure on export credits guarantees and export control, as well as what might be termed trade diplomacy, could also be included. Our contributions to the European Union also cover activities which deal with development and policing issues which could be included in this assessment. Elements of the expenditure of Customs and Excise, the Home Office, and the Department of the Environment, Transport and the Regions could also be counted on a broad definition of expenditure on the combination of functions that allows a state to safeguard its interests from external (and internal) factors which could threaten those interests. White it is impossible to obtain strictly accurate official figures for spending on security policy defined in this broader way, it is possible to derive an assessment from the publication of The Government's Expenditure Plans for 1998-99.[201] Some figures are set out in Figure 6. Regrettably, the Chief Secretary declined an invitation from the Committee to give evidence to set the SDR within the context of the government's overall Comprehensive Spending Review. Writing in The Times in May 1997, the former Foreign Secretary Lord (Douglas) Hurd said—

    Politics, trade and security are nowadays closely intertwined. So therefore should be the defence budget and the budgets for diplomacy, aid, trade promotion, the British Council and the BBC [World Service].[202]

We recommend that the government initiates a study of the resources spent on security across central government expenditure, and publish its results.

70. The process of developing and refining a security policy needs to be continuous, and continuously made accessible to public debate. At present, anyone searching for an assessment of the contributions of different departments to the overall security of the UK would have to seek to make their own synthesis of the Annual Reports of several departments. The government's recent Annual Report[203] contains a Chapter on Leadership Abroad[204] which goes some way in the direction of providing such an overview of our instruments of external policy and their relative contributions and interrelationships. However, we would hope for something rather more substantial and detailed in addition to this, and it has nothing to say about internal security and civilian protection. We recommend that the government consider publishing annually, in the Prime Minister's name, a statement of its security policy and priorities, and the contributions made to advancing these priorities by the MoD, the Treasury, the Foreign and Commonwealth Office, the Department for International Development, the Home Office, the Department of Trade and Industry and the Intelligence Services. We believe

Figure 6

Expenditure on UK Security 1997-98

Function

  £ Million

MINISTRY OF DEFENCE

  21,135

FCO: including: Peacekeeping £53m, Military Assistance £17m, International Subscriptions £91m, CFSP Expenditure £5m, Military Training £15m, Programme and Other £72m, Information Services £15m, World Service £161m, Monitoring Services £7m, British Council £5m, Overseas Posts £38m,* Assistance to Overseas Territories £3m,* Anti-Narcotics Assistance £5m,* African Defence Assistance £1m.*






Total Foreign and Commonwealth office

  488

INTELLIGENCE SERVICES*

  740

PEACEKEEPING EXPENDITURE (from Contingency Reserve)

  62

HM CUSTOMS AND EXCISE: including: Anti-Smuggling (Protection of Society) £131m, Other 'Protection of Society' Activities £46m, International Trade £31m,* Intelligence £41m, Anti-Smuggling (UK Category) £12m, Investigation (UK Category) £31m.




Total Customs and Excise

  292

DfID: including: Country Aid £711m, Sectoral Aid £188m, EU Multilateral Aid £210m, Subscriptions to financial institutions £285m, Subscriptions to the UN, Commonwealth etc £100m, Overseas aid administration £2m, Gibraltar £9m, Commonwealth Development Corporation £21m, Global Environmental Assistance Programme £20m.






Total Department for International Development

  1546

DTI: including: Subscriptions to IAEA £9m, Subscriptions to OPCW £5m, Subscriptions to IEA and ECTS £1m, Subscriptions to International Research Councils £12m,* Nuclear Safeguards etc £4m, Nuclear Emergency Planning £2m, International Trade Policy £6m, DTI Costs of UKAEA £13m.*




Total Department for Trade and Industry (not including ECGD)

  52

EXPORT CREDITS GUARANTEE DEPARTMENT

  42

DETR: including: Maritime, Coastguard, shipping and civil aviation services* £28m, UK Maritime Agency £59m.*


Total Department of Environment, Transport and the Regions

  87

HOME OFFICE: including: Civil Defence expenditure £38m, Policing £44m.*


Total Home Office

  82

EUROPEAN COMMUNITIES*

  89

TOTAL

  24,617

NON-MOD TOTAL

  3,482

MoD TOTAL

  21,135

% MoD

86%

% NON-MoD

14%

*  Unofficial estimates made on the basis either of apportioning a percentage of total spending in this category to security-relevant work, or by extrapolating from estimates of current financial provision.

#  1998-99 financial provision. 1997-98 totals are comparable, but expressed in different categories.

Source: Professor Michael Clarke; Centre for Defence Studies; King's College, London

that this would not only contribute to better informed public debate, but that the process of preparing it would force different departments to re-examine whether their activities were fully mutually reinforcing.

71. We do believe that it will prove necessary to take some steps to sustain ongoing public debate in the wake of the SDR. While we would see no place for an executive body to succeed the Advisory Panel (so that questions of accountability do not, we feel, significantly arise), the absence of a means of drawing together the many different strands of security policy as they affect government policy is a problem to which many witnesses drew attention. We believe that such a process may flourish more readily if freed from the inevitable constraints of departmental bureaucracies. We therefore recommend that the government consider the possibility of creating an advisory group of people appointed by the Secretary of State for Defence, the Foreign Secretary, the Secretary of State for International Development, the Home Secretary, the Chancellor of the Exchequer and the Secretary of State for Trade and Industry, charged with producing periodic (no more than annual) reports on the coordination of policies affecting all areas of national security.

Consultation with Allies

72. We are told that—

The Secretary of State told us—

    The sort of forces we have come up with in this Review seem to us to fit with the way NATO is developing and very much respond to the same pressures that the United States has been urging on the European members of NATO.[206]

That pressure from the US is essentially for Europe to catch up with, or at least for European forces to be able to "operate alongside",[207] their own Armed Forces. The Minister of State at the Foreign and Commonwealth Office told us that the SDR—

    ... was designed to be compatible both with NATO's historic role and ... with the role that NATO has begun to play in the world since the end of the Cold War[208]

and that it put the UK—

    ... in a position to make the kind of contribution that we are best suited to make to collective security.[209]

73. The MoD's Policy Director confirmed that the recent review in France of its defence posture had come to broadly similar conclusions as those of the SDR,[210] but also agreed that other major European powers, especially Germany, were still divergent from the expeditionary or power projection configuration for their armed forces.[211] NATO is in the process of reviewing and redefining its own Strategic Concept, and it is anticipated that it will be agreed at the Washington Summit next Spring.[212] We intend to follow developments in NATO's deliberations in the run-up to that Summit and produce our own Report in due course. But we see no reason to doubt Sir Michael Alexander, a former UK Ambassador to NATO, when he assured us that—

    NATO would certainly have liked this review. NATO, we already know, both as an organisation and as a group of Member States, has welcomed the outcome. I think they have been impressed by the way it has been conducted. They have been impressed by the framework and they have been impressed by the conclusions. That goes both for the United States and, for instance, France. It contains certain embarrassments for them in the sense that it signposts a difficult road which some of them still have to go down, but the basic answer to your question is yes, it has been welcomed.

We consider the SDR in its relationship to NATO in more detail in the next section.

Carrying the Process forward

74. The Secretary of State declared from the outset that he wanted the SDR to mark a new era of openness at the MoD. We acknowledge that the process of the SDR has laid the foundations for that 'open and inclusive'[213] approach, certainly being the most open defence review yet—although 'openness' remains a relative concept. This was a relatively risky approach. It might not have worked, but it did.[214]

75. However, there remain some doubts in our minds as to whether there has been a genuine and enduring culture change within the MoD. The Secretary of State has been punctilious in seeking to involve this Committee in the SDR process, and eventually agreed to our meetings with the Assistant Chiefs of Staff which proved very useful. We note, however, that the producers of the 'fly-on-the-wall' documentary, broadcast on BBC2 on 31st May,[215] which followed the SDR process, seem to have been given rather more access to the inner workings of government than we were. Over the years, our predecessor Committees have been denied access to documents on the basis that they constitute 'advice to Ministers', on the basis that they are 'commercially confidential', on grounds of 'national security' or because of 'political sensitivity'. We made some comments about the denial to the Committee of full information in relation to the draft Corporate Plan for the Defence Evaluation and Research Agency in an earlier report of this Session.[216] In the course of this inquiry, we have been denied access to details of the structure of the working parties participating in the SDR process, and also to the report on procurement processes prepared by McKinseys.[217] In none of these cases do we accept that the category of 'advice to Ministers' applies. Moreover, we note that the convention that this category of information may be withheld from Committees of the House is one which the House has never accepted.

76. We shall maintain a posture of constructive engagement with the Ministry on these questions of disclosure of information to Parliament, while we shall continue to press the case for greater openness. While we acknowledge the need for some confidentiality on matters of national security, we do not accept that there is anything automatically sacrosanct about 'advice to Ministers'.

77. Perhaps more importantly, although the quality of information to Parliament from the MoD has steadily improved over the last twenty years, the SDR does not altogether represent an advance in this area. Previous Statements on the Defence Estimates have included summary statistical data, although previous Committees have not found these have provided sufficient information to allow a thorough analysis of MoD's activities.[218] We have welcomed the publication of the SDR Supporting Essays, but the White Paper lacks even the financial and statistical information of the Statement on the Defence Estimates. We have more to say about the quality of the MoD's published financial information in the SDR and more generally later in the Report.[219] In a letter to the Chairman from the Secretary of State we were also told that the MoD intend to modify the way in which they divide information presented to Parliament through the annual SDE in the Spring and annual Performance Report in the Autumn.[220] We shall be examining these arrangements critically.

78. Another factor which will influence the ways in which information is presented to Parliament is the introduction of resource accounting and budgeting into departmental accounts over the next few years. We discuss the difficulty of precisely ascertaining the relative costs of maintaining different aspects of the country's military capabilities below.[221]

79. We intend therefore, in the next year, to conduct an inquiry into the implications for financial reporting to Parliament of the MoD's adoption of resource accounting and budgeting, and also into wider questions of the provision of information to Parliament and others, including the potential impact of the proposed Freedom of Information legislation. While we congratulate the MoD on carrying forward the process of making more transparent its own sometimes opaque internal processes, we believe there is some way to go before Parliament can be assured that it has the information it needs, in the form it needs, to come to its own verdicts on the soundness of the MoD's judgements.

80. We conclude that the process underlying the SDR does represent a new and welcome departure in making more open the discussion and formulation of our security and defence policy between government departments and outside government. We congratulate the Secretary of State for Defence on his courage in undertaking this perhaps risky initiative. The task for the future is to sustain this new approach in the formulation and discussion of security and defence policy, and for our own part we intend to take every opportunity to urge greater transparency on the Ministry of Defence.

81. When the Committee met members of the National Defense Panel in Washington in February, we discussed their own Review.[222] They laid particular emphasis in our discussions on the importance they attached to the development by the Pentagon of what they called a 'Transformation Strategy'. In essence, this is a clear plan for getting from where you are to where you want to be. The SDR recognises in many ways the importance of not just setting goals but addressing how to reach them. However, it falls far short of setting out a detailed route to the future, with destinations and milestones defined. We will be looking for a clearer definition by the MoD of its own 'transformation strategy' in the future, and we will be pressing for clear and measurable targets and timescales to be defined by which Parliament, and the wider public, can assure themselves that real progress in implementing the SDR's strategy has been achieved. We give a number of specific examples of this further below.


190  Cm 3999, para 42 Back

191  Cm 3999, para 43 Back

192  Q 2688 Back

193  Q 2628 Back

194  Q 1561 Back

195  Q 1563 Back

196  Q 1566 Back

197  Q 1568 Back

198  Q 1563 Back

199  Q 1564 Back

200  Cm 3999, para 10 Back

201  Cm 3901, Cm 3902, Cm, 3903, Cm 3905, Cm 3907, Cm 3918, Cm 4011 Back

202  The Times, 31 May 1997 Back

203  Cm 3969 Back

204  Cm 3969, pp 90-95 Back

205  Essay 1, para 25 Back

206  Q 1579 Back

207  Q 1638 Back

208  Q 2805 Back

209  Q 2883 Back

210  Q 2884 Back

211  Q 2885 Back

212  Q 2804 Back

213  Essay 1, para 2 Back

214  Q 2659 Back

215  A Paper War, Inside Robertson's Defence Review Back

216  Sixth Report, Session 1997-98, The Defence Evaluation and Research Agency, HC 621, para 13 Back

217  See paras .. Back

218  See eg Ninth Report, Session 1992-93, Statement on the Defence Estimates 1993, HC 869, paras 3 and 4 Back

219  See paras 382-384 Back

220  Ev p 279 Back

221  See paras 406 Back

222  Transforming Defense: National Security in the 21st Century, Report of the National Defense Panel, December 1997 Back


 
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