Ministry of Defence Annual Report and Accounts 2007-08 - Defence Committee Contents


The scrutiny of a department's performance against its targets is central to the work undertaken by select committees. Like most select committees, we inquire on an annual basis into the Ministry of Defence's (MoD) Annual Report and Accounts (ARA). This Report examines the administration, expenditure, activities and achievements of the MoD during the 2007-08 financial year, as described by the MoD in its most recent ARA, which was published on 21 July 2008.

The implementation and operation of the Joint Personnel Administration programme (JPA) has so far revealed very considerable failings. The lack of sufficient financial controls led the Comptroller and Auditor General to qualify the MoD's Resource Accounts for 2007-08. The scope of these failings is significant and impacts upon several areas critical to service personnel satisfaction with life in the Armed Forces. It is, in our view, truly reprehensible that such mistakes were allowed to be made by those charged with oversight of the JPA programme. We will continue to monitor the operation of JPA, and hope to find evidence of vastly improved service when we inquire into ARA 2008-09.

On a separate but related issue, we note the MoD's extensive programme of change, in particular driven by efficiency targets—largely met—which have led to some quite dramatic headcount reductions. Whilst the Department has succeeded in meeting efficiency targets, it is unfortunate that these fell just as JPA was performing poorly. Some headcount reductions will no doubt have made the impact of some of JPA's failings worse, and we have other concerns about the management of the different aspects of the MoD's change programme where changes in staffing levels have placed increasing strains on personnel involved in supporting current operations.

We are disappointed that the MoD has failed to gauge accurately its likely performance against targets in the years preceding this year's Annual Report and Accounts, particularly with regard to its readiness targets We are also concerned about the over-optimism that allowed the MoD to believe that it had some chance to meet targets that, in the end, it entirely failed to meet. Its forecasting of performance has been poor and must improve.

We must also express reservations about the transparency of the MoD's targets in the 2004 Spending Round reporting period, and about the clarity with which the MoD reported against them. The terminology used in reporting was ambiguous and could equally cover near-success and close to abject failure, and the level of subjectivity in assessing performance against some targets was very considerable indeed.

We hope that the system of objectives and targets currently in use in this new reporting period proves to be more transparent, and that the MoD's reporting against them is at least as thorough and regular as—and more objective than—equivalent reporting in the SR2004 period.

We must emphasise our particular concern about the Department's past performance against its readiness targets, which, along with recuperation issues, we are currently looking into in another inquiry. The consequences for our Armed Forces of long-term concurrent operations in Afghanistan and Iraq are perhaps nowhere more evident than in the declining readiness of force elements. The MoD's planned recuperation programme is vital to improve performance but it must place no further pressures on already hard-pressed personnel while showing sufficient flexibility to deal with possible changing or increasing deployments to theatre in the near future. It is also a matter for continuing concern that performance against readiness targets in this reporting year have so far shown no improvement—with little chance of significant improvement for years to come.

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Prepared 30 March 2009