Select Committee on Defence Minutes of Evidence

Examination of Witness (Questions 351 - 359)




  351. Air Chief Marshal, apologies for keeping you waiting a little while. Thank you very much for coming. Please give our best wishes to your predecessor who did the job very, very effectively. You have been Chief of Defence Logistics now for just a short time and almost upon arrival the MoD published the new Strategic Plan for the DLO. Did you have any role in its preparation or was it a fait accompli when you arrived at your new desk?

  (Air Chief Marshal Sir Malcolm Pledger) First of all, thank you, on behalf of my predecessor, Sam Cowan, to whom much is owed, for where the Defence Logistics Organisation is currently. I think that is a point I have made as I have gone around in my early time—the achievements since its relatively recent inauguration. So far as the Strategic Plan is concerned, I do not think you will be surprised to know that I started to engage with the organisation a couple of months before I actually took over, and that I would suggest that I and my board very much own what is in this publication.

  352. So there will be no tweaking or slight amendments, or would you normally expect that in the course of business anyway?
  (Air Chief Marshal Sir Malcolm Pledger) Absolutely. I think this is an essential means, shall we say, of taking what we have described as the next step in the development of the DLO. I would expect us to publish one of these each year, reflecting progress that has been made, the challenges that remain and a determination, really, to gain recognition for the people in the organisation as to what they have achieved. I do not think anything in today's uncertain world—certainly in the military—would ever be seen as standing still. This will be an annual event, Chairman.

  353. The MoD kindly sent us a copy of the McKinsey Report upon which much of the DLO Strategic Plan seems to have been based. As the report is classified we will be very, very careful in any questions we pose. The document, as it has been sent to us, is a weighty document, too. I would like to ask: what were the circumstances that led to the calling in of McKinsey? Who decided to call in McKinsey? Can you give us an indication of the reasons why that route was taken and not, perhaps, some sort of in-house study being undertaken?
  (Air Chief Marshal Sir Malcolm Pledger) I would suggest McKinsey was very much the determination of the MoD to understand exactly where the Defence Logistics Organisation was in its transformation; how far it had got in what I call transforming the inheritance from the three single services and in pursuit of its seven themes—convergence, integration, et al. You will also know that the supporting business change programme that the organisation already had in place was in question in terms of its scope, substance and indeed its cost. This was a means of providing information as to how far we had got and, therefore, what the next steps might be across the MoD and not just within the organisation itself.

  354. How much did the study cost? Anyone behind know? Perhaps you will let us know.
  (Air Chief Marshal Sir Malcolm Pledger) I will let you know, Chairman.

  355. Are you generally satisfied with the report? Was it a good piece of work?
  (Air Chief Marshal Sir Malcolm Pledger) The Department is very definitely satisfied with the content and with the findings and, if I may support that, I would also suggest—and the product, as you say, at least in some parts is the Strategic Plan—it reinforced that best practice was already being applied across the department and in the organisation but, shall we say, not as consistently as it might, in order to derive full value for money.

  356. Could you elaborate slightly, perhaps, the extent to which the Strategic Plan reflected the conclusions of McKinsey—just to add to what you have said? As you have only been in the job for a short while, if you wish to consult any of your advisers or bring them forward, please feel free to do so.
  (Air Chief Marshal Sir Malcolm Pledger) Thank you very much. I think the real value that we have taken from McKinsey in terms of going forward rather than looking back is to be able to apply what I will call a process regime across some disparate environments, better to prosecute what was originally envisaged in integration and convergence. This very much emphasises the processes and the benefits that will accrue from those processes in the regime, of course, that Smart Acquisition put in place and the IPTs then delivering against our customers' requirements. However, it is more than that. It is also what I referred to earlier on the ability subsequently to measure the improvements that accrue from those processes. One of the major findings was that we were not good at actually being able to identify those and gain recognition for them. So another part of this, deliberately, is to have a change plan, a change regime of programme arrangements such that we can identify what has happened and the benefits associated with it.

Mr Hancock

  357. When was the report made available to you? When did you get the report?
  (Air Chief Marshal Sir Malcolm Pledger) It was made available formally to the Ministry of Defence, I think, about two weeks after I took up my appointment.

  358. When was that?
  (Air Chief Marshal Sir Malcolm Pledger) 2nd September. There had been various, what I will call, interim meetings with the consultants to show their interim findings before that.

  359. I have not had a chance to read it, unfortunately, but the question that you raised yourself in answer to the Chairman's first question was this thing about value for money. Did the report have a chance to look at value for money if some of our European partners no longer took up, for example, the number of Eurofighters or missiles as we have heard today, and the cost to the UK defence budget increases significantly? Is there not a judgment to be made on whether or not you are still getting value for money for that product in defence terms, rather than the social implications for the country of making a different decision?
  (Air Chief Marshal Sir Malcolm Pledger) No, the consultants were not engaged on that basis. It was very much to look at the current structure and progress of the DLO in fulfilling the objectives it was given to start with. Therefore, a process analysis of how we were doing business. The requirements, of course, are then the area of other parts of the department; they were not invited to challenge what I will call the relationship then between Customer One and the DPA, and the product of that initial equipment procurement modality.

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