THE WHITE PAPER
9. The previous Secretary of State had indicated
that the—
... new approach to the White
Paper will enable us to give policy issues a deeper and more thoughtful
treatment than has been possible in past Statements on the Defence
Estimates. My hope is that, taken in conjunction with the expanded
Departmental Performance Report, it will contribute to a much
improved awareness and understanding of defence policy and its
implementation.[27]
However, the new Secretary of State told us on 19
January that what he would—
... like to avoid is the
idea that we always have to publish a White Paper on policy each
and every year, not least because part of our ambition, which
I know the Committee shares, is to have a stable and consistent
policy that should not necessarily change from year to year. I
do not have a firm view on the matter. I would welcome the Committee's
ideas and deliberations, but I would like to avoid the idea that
we simply publish a White Paper for the sake of it. Certainly
we will publish a performance document that I hope gives the Committee
all of the detail that it requires, but I would prefer to publish
a White Paper when there was a significant change in policy that
justified it.[28]
We note the Secretary of State's undertaking to continue
with the Performance Report, and we comment on how it might be
improved below. We also comment on how it might be better integrated
with the Expenditure Plans and Investment Strategy. However, we
feel we must respond to his challenge to offer an opinion, which
at this stage can only be preliminary, on the value of an annual
White Paper.
10. We share the Secretary of State's desire for
stability in defence planning and acknowledge the validity of
his argument against an annual White Paper on the basis that the
SDR was intended, at least in part, to achieve this. However,
this contrasts to an extent with a statement in the White Paper
itself—
In the SDR White Paper we
explained how the policy framework was translated into a detailed
basis for determining Britain's future defence needs by means
of a comprehensive set of planning assumptions ... Since the SDR,
we have formalised this analytical process as part of a new annual
defence strategic planning cycle which we conduct in consultation
with other government departments. We will therefore be able to
keep the assumptions under regular review in the light of changing
policy, events and trends. The new strategic planning process
will provide a regular process of re-evaluation.[29]
The advantage of having an annual restatement of
defence policy is that it enables observers to track the subtle
shifts and nuances of defence policy which reflect these changing
analyses and re-evaluations. Its cessation as a regular event
would continually raise the question of whether any policy shift
was of sufficient significance to merit a new White Paper. Inevitably,
if these became rarer, the stake needed to trigger publication
would become higher. Despite the public consultation surrounding
the Strategic Defence Review,[30]
the attitude of the MoD towards making its thought processes publicly
accessible is far from radically transformed from the bunker mentality
of the Cold War era. A small example is the series of questions
we posed to the Secretary of State about the UK's nuclear posture.
The Policy Director informed us that a thorough restatement had
been made by the previous Secretary of State at the University
of Aberdeen in March last year.[31]
A very quick straw poll revealed that even amongst an expert circle
this speech was largely unknown—though we did discover it
on the MoD's website. To rely on the MoD to judge when any change
of policy is worthy of public announcement would be rather like
having left the late Greta Garbo in charge of her own publicity.
Adopting the lower profile will, we suspect, always remain the
preferred option. Furthermore, as time passes from one overarching
statement of policy to the next, it will be increasingly difficult
to know for certain whether all the information necessary to reconstruct
a coherent and up-to-date statement of defence policy is available.
The annual publication also provides a ready focus for parliamentary
debate. These appear to us to be strong arguments for continuing
with an annual restatement of defence policy in the form of a
White Paper.
11. However, we acknowledge that there are countervailing
arguments. If defence policy were actually to reach such a state
of homeostasis that each annual White Paper was no more than a
mildly reprocessed version of its predecessor, it could well be
argued that it represented a nugatory effort. However, we doubt
if that ever will, or should be, the case, and if the continuous
analysis outlined above is actually going on within the MoD, it
must surely be necessary occasionally to pause and synthesise
its results. An annual White Paper might be as useful a focus
for that exercise as anything else. Nonetheless, it would be interesting
if the MoD were able, in its response to this Report, to indicate
even a very broad guesstimate of the number of people-hours invested
in the production of the White Paper and their approximate cost.
The figure would illustrate the cost-benefit ratio of the exercise.
12. The Secretary of State also told us, when asked
what changes he had made to the draft White Paper he inherited
on taking office in October, that—
There was a fundamental change
in one sense, in that I did want to produce a document that I
felt was providing an insight into what happens in government
as far as defence is concerned that was accessible to the great
majority of the public and not simply understandable by those
who were already expert on the subject.[32]
And that he had—
... looked at some of those
previous White Papers; I accept that for someone who is well versed
in the minutiae of defence policy those documents provided a tremendous
amount of help and information—but at the same time I believe
that it is the responsibility of the government to attempt to
communicate with the public.[33]
We would welcome any attempt by the Secretary of
State to reach a wider audience—though it is less than clear
how this goal might be achieved by reducing the frequency of White
Papers. However, there seems to have been no research within the
MoD into the relative effectiveness of different styles of publications
in reaching a wider audience. This should be undertaken before
decisions are made—not least to assess the impact of the
availability of this type of material on the internet. We commented
after all in our own Report on the SDR that—
The question of whether the
SDR process has significantly raised the profile of the defence
debate inside and outside Parliament is one criterion by which
its success will be measured over the coming months and years.[34]
It is certainly true that density of information
can be used as a substitute (or a camouflage) for clarity. But
if the level of 'minutiae' given in the White Paper is to be reduced—and
there is little enough in this first new style White Paper—the
Expenditure Plans, Investment Strategy and Performance Report
will have to be beefed up.
13. Before turning to the longer-term future for
the Defence White Paper, we must first consider whether one is
needed this year—2000. The next Spending Review round is
just getting under way.[35]
We will not reiterate here the analysis we made of the defence
budget in our report on the SDR [36]
except for the comment we made in our conclusions—
The government's new three
year financial planning cycle may give a welcome element of stability
to forward planning in the defence budget. But we note, once again,
that defence spending has now reached an historically low level.
As a proportion of central government expenditure it is now as
low as it was in the appeasement era of the 1930s. Any proposals
for further cuts in real terms below the third year baseline will
almost certainly cause the entire strategy to unravel.[37]
We expect to see the Chancellor's pledge of stable
spending honoured and we discuss below the implications if it
is not.[38] The Treasury
has indicated that it will undertake Spending Reviews in 2000
and 2002,[39] in each
case looking three years ahead (with the first and third years
therefore overlapping from one Review to the next). The latest
Spending Review is planned to be completed by the summer recess[40]
so we would expect to see its outcome in the Autumn of this year.
It will set the financial context of defence planning out to April
2004. We recommend that a Defence White Paper 2000 should be
published, analysing for the period to 2004 the implications of
the Spending Review for defence planning and the implementation
of the Strategic Defence Review strategy and structure.
14. We pursued our witnesses at some length in trying
to grasp the reality of what a 'joined-up' security policy might
mean for the way government is working, and the way it thinks
about how to allocate funds across departments.[41]
In our Report on the SDR we said that that Review represented—
... 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 ... 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.[42]
We also recommended an annual report on security
policy, assessing and explaining the contributions of the MoD,
the Treasury, the Foreign and Commonwealth Office, the Home Office,
the Department of Trade and Industry, the Department for International
Development and the Intelligence Services to the security of the
UK.[43] In its response
the government saw 'no immediate requirement' for such a report.[44]
Since then, there has been much talk about 'joined-up government'.
The recent report from the Cabinet Office's Performance and Innovation
Unit on Whitehall's management of cross-cutting policies and services,
Wiring It Up,[45]
recommends that—
Ministers and civil servants
need to provide strong leadership for cross-cutting working in
order to create a culture which fosters cross-cutting initiatives.
They need to act as "champions" for cross-cutting policies
and services.[46]
It concludes that departments should—
signal the willingness of
central Government departments to provide oral and written evidence
to Parliamentary Committees on cross-cutting issues regardless
of the terms of reference or ambit of the Committee;
make available to Select Committees in both Houses,
at an early stage in the policy process, information about the
factual and analytical basis of cross-cutting policies; including
joint appraisals;
wherever possible, give Parliament early notice of
cross-cutting issues which are being addressed by department.[47]
We hope that the MoD will emerge as one of the
"champions" of joined-up government. Security policy
is an obvious example of where this approach is needed.
15. If the White Paper is to be largely stripped
of quantitative and qualitative analysis and become more descriptive,
we recommend that the government considers replacing the Annual
Defence White Paper with a broader, cross-cutting publication,
placing security policy in the wider context reflecting the ways
in which we seek to influence events 'as a force for good' and
how we seek to protect the UK and its interests and stabilise
the wider international security environment. We invite the
Cabinet Office to consider this recommendation, as well as the
MoD.
16. If the government were to choose to follow this
recommendation, there should be no diminution of direct MoD accountability
to Parliament. The analytical material that was a feature of Statements
on the Defence Estimates in the past could be contained in an
overarching security policy document. We consider potential improvements
to the other elements of the cycle below.
THE PERFORMANCE REPORT, EXPENDITURE
PLANS AND INVESTMENT STRATEGY
17. The Performance Report in its present form tells
us very little about how the MoD has performed over the years
in question. It measures resources and activity but hardly even
begins to measure outputs. (We return to this subject in more
detail in our discussions of resource accounting and budgeting
and efficiency savings below.[48])
The Performance Report is inadequate for its stated purpose.
It is not possible to evaluate performance without access to the
Departmental Plan which set the objectives for the year in question.
We recommend that this Committee is given access to that Plan.
If the MoD's deployment of resources is indeed based on a 'comprehensive
set of planning assumptions' kept 'under regular review in the
light of changing policy, events and trends' and translated into
identifiable deployments, operations, training, procurement and
support outputs, then the documents fail to make this self-evident.
There needs to be a move towards a clear read-across from financial
inputs to activities, defence outputs and outcomes in terms of
the desired strategic purposes . We acknowledge that this has
been said before, and is easier to define as an ideal than it
is to put into practice. However, we invite the MoD, in its
response to this report, to indicate how it is moving in the direction
of greater clarity in its annual reporting cycle about the relationship
between resources, activities and outputs, and what further developments
it plans.[49]
18. On a more detailed level, we would like to see
a much more logical approach to linking the presentation of input
and output measures to the overarching strategy via the
defence missions and military tasks. It would also be useful for
the Performance Report for example to enumerate aircraft accidents,
and modification programmes and their causes, linking these to
effects on the operational effectiveness and availability of front-line
and support aircraft; to analyse training exercises undertaken
and cancelled, and their effect on operational effectiveness;
to describe deployment patterns of the flotillas, and analyse
ships available in each class at quarterly points throughout the
year; to quantify levels of undermanning problems and effects
on deployments and tour intervals and separated service; to give
details of recruitment, and resignations and their causes; and
to assess the implications for military capability of progress
or delays in equipment programmes.
19. The Expenditure Plans report could also usefully
include more detail. In April, we examined the MoD's Principal
Finance Officer on forward budget figures for the three year planning
cycle and their mysterious absence from the report. He responded
that it remained the case that—
... we still do not disclose
in public or to the Committee the details of the forward plans.
Having said that, we are conscious that we want to be more helpful
and we have given the Committee and Parliament a fair bit of detail
about some individual projects and we are looking hard to see
whether we can find a way of relaxing some of our current constraints.[50]
We expect to see some evidence of this more relaxed
attitude to providing information to Parliament in the next Expenditure
Plans report.
20. The PFO also explained to us some of the background
to the new Investment Strategy report. He told us that 'investment'
was probably more important for Defence—with assets of £85
billion—than for any other department,[51]
and that—
We have ... tried to explain
the procedures that we are using, both routinely and to try and
improve our performance ... For instance, we are giving a split
between the different types of assets that our investment is going
on, both in current and future years. It is the first time we
have published the asset base ... This is the work that is flowing
from our work on resource accounting. It is the first time that
we have known ourselves what these figures are and have been able
to put them in the public domain. Similarly, the expected level
of receipts from asset sales are in a similar format. It is the
first time we have done this. I think we regard this as essentially
work in progress, it is the sort of document I hope we can improve
on in future years ... reading it in the cold light of dawn again
it seems to me there are things in there that we could improve
on. We could improve the correlation between some of these numbers
and numbers in the Expenditure Plans ... This is the sort of area
that we will be looking to improve on in future years. We certainly
intend to update this on an annual basis.[52]
We welcome the Principal Finance Officer's self-critical
appraisal of the first edition of the Investment Strategy. Many
of the shortcomings he recognises are those that we would also
point to. We look forward to an improved version next year, and
recommend that the thinking so far is laid out in the government's
response to this Report.
21. We now turn to consider how the implementation
of resource accounting and budgeting in the MoD might contribute
to improving its ability to understand the effects of its own
decisions and account for these better to Parliament and the public.
15 pp 1 to 19 Back
16
pp 25 to 43 Back
17
Q 688 Back
18
In the footnote to this report, references to the 1999 White Paper
are indicated by 'Cm 4446' and a page or paragraph number; references
to the 1998-99 Performance Report are indicated by Cm 4520 and
a page or paragraph number; references to the Strategic Defence
Review White Paper of July 1998 are indicated by Cm 3999 and a
page or paragraph number. Back
19
See list of witnesses at end of this Report. Back
20
Ev pp 145-165 Back
21
The Government's Expenditure Plans 1997-98 to 1999-2000, Ministry
of Defence, Cm 3602 Back
22
Statement on the Defence Estimates 1996, Cm 3223 Back
23
Ministry of Defence Performance Report 1995-96, Cm 3448 Back
24
The Government's Expenditure Plans 1999-2000 to 2001-02, Ministry
of Defence, Cm 4208 Back
25
Defence White Paper, Cm 4446 Back
26
Ministry of Defence Performance Report 1998-99, Cm 4520 Back
27
Ev p 184 Back
28
Q 686 Back
29
Cm 4446, para 11 Back
30
Eighth Report, Session 1997-98, The Strategic Defence Review,
HC 138-I, paras 53 to 81 Back
31
Q 779 Back
32
Q 689 Back
33
Q 690 Back
34
Eighth Report, Session 1997-98, op cit, para 64 Back
35
Q 730 and Ev p 164, para 32.4 Back
36
Eighth Report, Session 1997-98, op cit, paras 378-405 Back
37
ibid, para 435 Back
38
See paras 141-161 Back
39
Treasury Memorandum to the Treasury Committee, 22 January 2000
(not yet published) Back
40
Ev p 164, para 32.4 Back
41
QQ 710-726 Back
42
Eighth Report, Session 1997-98, op cit, para 80 Back
43
ibid, para 70 Back
44
HC (1997-98) 1198, para 4 Back
45
The Stationery Office, January 2000 Back
46
ibid, p 28 Back
47
ibid Back
48
See paras 22 to 37 and 158-160 Back
49
The 1993 Statement on the Defence Estimates could serve
as an example of methodology that could be developed Back
50
Q 158 Back
51
Treasury Memorandum to the Treasury Committee, 22 January 2000
(not yet published) Back
52
Q 211 Back
