Examination of Witnesses (Questions 20-39)
GENERAL SIR
KEVIN O'DONOGHUE
KCB CBE, DAVID GOULD
CB AND LIEUTENANT
GENERAL DICK
APPLEGATE OBE
29 JANUARY 2008
Q20 Mr Hancock: Let me start with
your own organisation. You have given a commitment that by 2012,
four years from now, you will have reduced manpower levels from
29,000 to about 20,000. How will that be achieved? How can you
be absolutely sure that in achieving the target you do not lose
the people you most need to retain because the ones who may go
off are easily employable elsewhere? How will that work out?
General Sir Kevin O'Donoghue:
To answer the second part of the question first, you are absolutely
right that it is a big challenge. How do you retain and motivate
the people you want while other people are leaving? I do not believe
that can be done with money given the way we operate; it must
be done by motivating people, so it is a matter of leadership
and management. As far as concerns reducing size, we started with
29,000 and we are now just under 27,000. We put the strategic
intent and outlined where we needed to be in output terms to all
the two stars and asked them how many people they needed. Using
all the levers available to them under the new construct and HR
delegations, how many people did they need to deliver their outputs
and what was their profile over the next four years? That was
how we finished up with something of the order of 20,000.
Q21 Mr Hancock: Do you think that
in the end it will lead to your having to buy in short-term contract
staff to cover some of the holes that might have been made by
losing so many?
General Sir Kevin O'Donoghue:
I believe that when in some areas we do buy in expertise it is
not because of numerical holes but holes in professional expertise.
For example, my DG Commercial and DGHR are from the outside and
we need to bring in people. While the process of upskilling is
going on so we can get our own people up to the required level
of professional skill we need to buy in some expertise. In some
areas we just do not have the expertise anyway. We would not want
it in-house because it is unique and we might just want to buy
it in for a week, a year or whatever it is.
Q22 Chairman: Arising out of that,
is your DG Commercial Amyas Morse?
General Sir Kevin O'Donoghue:
No; it is Les Mosco who is two star and he is located at the other
end of the motorway. He is my DG Commercial, as opposed to the
Defence Commercial Director who is Amyas Morse.
Q23 Chairman: What sort of support
staff does your DG Commercial have?
General Sir Kevin O'Donoghue:
Numerically?
Q24 Chairman: Yes.
Mr Gould: There are about 900
commercial staff spread right across various project teams.
Q25 Chairman: What sort of commercial
experience does that staff have?
Mr Gould: Most of them are, if
I may put it this way, home-grown commercial officers so they
will have training from the Institute of Purchasing and so forth.
They will have commercial qualifications. Most of them—there
are some exceptions—will have spent their lives as civil
service commercial officers rather than coming in from outside.
Q26 Mr Hancock: As to the size of
the organisation, what are your plans for reducing the number
of sites you occupy? Will there be enough room to locate the whole
organisation eventually at Abbey Wood?
General Sir Kevin O'Donoghue:
No. We will not get 20,000 people into Abbey Wood, and we would
not want to anyway given the big numbers of the organisation,
the naval bases, airfields and so on. The intention is that by
2012 all those people who are office-bound and who do not need
to be somewhere else specifically because that is where their
job is will be in Abbey Wood.
Q27 Mr Hancock: Would that release
a number of sites that you solely occupy, or are there sites that
you share with others at the moment?
General Sir Kevin O'Donoghue:
It could do. As an example, Chief of Defence Intelligence is moving
into Wyton behind us, so the whole estates plot moves round.
Q28 Mr Hancock: What about your relationship
with MoD centrally? Their plan is to reduce their staffing by
25% over a period similar to yours. Will that have a consequential
effect on your ability to deal with them and have the same ongoing
relationship, or will it be weakened by that?
General Sir Kevin O'Donoghue:
I think it will be stronger. The whole point of MoD streamlining
is not just to take out 25% of staff but to make it more effective,
and I believe the permanent under-secretary has accepted that
fewer people can be more effective. In that sense I think that
we should get through the approval and decision-making process
quicker. There is a danger that some of the things currently done
in the main building will move into DE&S. I do not have a
problem with that at all, if that is the right thing to do, provided
the resources to do it come with it.
Q29 Chairman: Can you talk us through
the concept of fewer people being more effective?
General Sir Kevin O'Donoghue:
There are some examples. If I may talk about DE&S where I
have a greater understanding, we put together two big organisations.
We pulled in two sets of processes. For example, the DPA and DLO
had assurance processes and we put them together. It has become
very clunky and we need to think out that process and in so doing
there is some duplication of numbers. By reducing the process
and hence the numbers we can make the process itself much more
streamlined and the decision-making much quicker.
Q30 Chairman: How do you ensure that
you lose the people you want to lose and not the people you want
to keep?
General Sir Kevin O'Donoghue:
This is very much a line management business. It is for leadership
and management to persuade those whom we really want to keep that
life in Abbey Wood is good and this is what everybody wants. Once
I can see people wanting to move out of main building down to
the other end of the motorway I shall know that we are beginning
to have a degree of success.
Q31 John Smith: Of course, all of
this is nonsense if we do not have the right skills?
General Sir Kevin O'Donoghue:
Absolutely.
Q32 John Smith: In your introduction
you referred quite rightly to upskilling the workforce in the
newly-formed department. With through life management capability
and long-term private sector partnership, which is what we are
now embracing, it is successful in the private sector precisely
because, as scarce as they are, they have other very important
skills, especially commercial lawyers. Have you completed your
skills audit, and what gaps if any have you identified within
the department?
General Sir Kevin O'Donoghue:
We have not completed the skills audit but we are a long way towards
it. In financial and commercial we have completed that audit.
Both DG Finance and DG Commercial know the number of posts that
they need to fill with professional people and at what level those
people need to be. We are upskilling those people. We shall achieve
the 50% target in both areas by the end of this year.
Q33 John Smith: The original target
date was March 2008?
General Sir Kevin O'Donoghue:
I meant that we shall achieve it by the end of the financial year.
We shall not achieve 50% in project management but then we were
not training people specifically in project management before
DE&S was formed; or just as it was being formed the DPA and
DLO boards agreed that we should put a programme in place. But
by the end of March 2008 I think we should have about 320 qualified
people—I cannot remember the exact figure but it is in the
memorandum—in project management. We have barely started
inventory management and the logistics side. Courses have been
set up in the Defence Academy in Shrivenham and they look good.
The first courses have been run and people are enthusiastic about
them, but we shall not have the skills up to the level needed.
Engineers are in short supply. It takes quite a long time to train
a chartered engineer, so we are progressing with that. Next year
we shall continue with the five areas that I have been talking
about and embark on another three areas: integrated logistics
support; HR and sustainable development. We shall start to upskill
the people who work in those particular disciplines. The answer
to your question is: no, not by a long way, but I think we have
taken a big chunk out of it and we now have it running and pointing
in the right direction.
Q34 John Smith: Are you satisfied
that your reward structure is flexible enough to recruit and retain
the right type of skill and professional?
General Sir Kevin O'Donoghue:
No, it is not. That is something in which the personnel director
is engaged; it is not something I can do within DE&S. It needs
to be either department-wide or perhaps civil service-wide. I
do not believe that we have the right rewards. I should like to
be able to pay people for their professional qualification when
they are in posts that require that professional qualification.
Q35 John Smith: To pick up Mr Hancock's
question, exactly how much are you spending on consultants?
General Sir Kevin O'Donoghue:
I do not know. I would have to come back to you specifically on
that.
Q36 Chairman: Could you come back
to us on that point?
General Sir Kevin O'Donoghue:
Yes.[1]
Q37 John Smith: I should like to
know the amounts and also the proportion of the total wage bill.
General Sir Kevin O'Donoghue:
Of course.
Q38 Chairman: As to the courses in
Shrivenham to which you referred, are you confident that they
will be funded next year?
General Sir Kevin O'Donoghue:
I fund them and I have ring-fenced the money.
Q39 Richard Younger-Ross: What progress
are you making in the implementation of the Defence Acquisition
Change Programme?
General Sir Kevin O'Donoghue:
I think it is moving along quite well. The merger between DPA
and DLO is a big part of the Defence Acquisition Change Programme,
but the other work strands are very important. Without the other
work strands all the good things that I think we can do by merging
DPA and DLO will not be nearly as effective. The other work strands
are the budgetary planning process and the whole business of having
a 10-year budget with equipment and support for that equipment
not yet in service held by the equipment capability community
and, as for equipment that is in service, for the first four years
to be held by the front line command. That has put money where
priorities and decisions need to be made. I do not own the support
budget any more except that I am given money in year and told
by the front line commands what their priorities are. That is
one really important strand and if you wish I can go on to talk
about the others.
1 See Ev 40. Back
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