Conclusions and recommendations
The Joint Personnel Administration programme:
the Qualified Audit Opinion
1. It
is difficult to exaggerate the magnitude of the failure of the
Joint Personnel Administration programme. At a time when the Department
is seeking, in many cases successfully, to deal with areas of
dissatisfaction in service personnel life, this failure, which
affects pay, entitlements and service records, is unacceptable.
(Paragraph 10)
2. We express our
serious concern that the MoD's Resource Accounts for 2007-08 were
qualified by the Comptroller and Auditor General, as a result
of their lacking financial controls, arising from the recently
introduced Joint Personnel Administration system. We are also
concerned by the number of weaknesses in financial control identified
by the NAO. We look to the MoD to address these weaknesses as
a matter of urgency. (Paragraph 15)
3. In developing JPA,
the MoD placed insufficient emphasis on financial reporting requirements
or the requirements for management information. A system was put
in place, presumably with the approval of the Department's Finance
Officer, that provided insufficient evidence of payments and which
could have such adverse impacts upon Departmental Accounts. We
consider this to be a basic and fundamental error which is unacceptable
on a project of this scale and importance. (Paragraph 16)
4. It remains unclear
whether the ability of the MoD to recover such a small proportion
of the monies it paid out to EDS for JPA reflects the nature of
the contract, a just assessment of the proportion of responsibility
for JPA's weaknesses or both. The decision to implement the JPA
programme through an existing contract, which was clearly insufficient
to deal with problems that might arise, was short sighted. The
lack of clarity in the design in the system at the outset has
led significant costs being incurred by the Department which ought
to have been entirely avoidable. (Paragraph 19)
5. We recognise that
considerable work has been undertaken recently to enable JPA to
support the MoD's financial performance. We note that more work
will need to be done. We will return to this subject in our next
inquiry on the MoD's Annual Report and Accounts. In its response
to this Report the MoD should set out what the current state of
JPA is, what current satisfaction levels within the service community
are with regard to JPA, and what progress has been made in implementing
the NAO's recommendations. (Paragraph 22)
Efficiency savings
6. As
we noted in our last Report, the MoD has exceeded its efficiency
targets by a wide margin. We commend the MoD for its focus in
maintaining its core programme. We must however express some concern
that these cuts come at a time of considerable change in the MoD,
and of continuing high operational commitments. Inevitably, such
reductions in staff have placed greater burdens upon personnel
and hindered performance. (Paragraph 27)
7. We are concerned
that there has been a significant cost to the achievement of the
MoD's efficiency programme. We consider that the difficulties
Service personnel experienced using the JPA system were in part
due to the MoD's pursuit of its efficiency targets. The fact that
the MoD has exceeded its efficiency targets while the JPA system
has performed so badly raises questions about the management of
the MoD's extensive change programme and about a possible conflict
of priorities. (Paragraph 29)
8. We are concerned
that MoD's headcount reductions, office closures and consequent
move towards contact centres have together proved a source of
frustration to Service personnel. We note that the MoD has no
method of measuring whether the quality of the service it provides
to Armed Forces personnel has deteriorated as a result of the
efficiency programme. We recommend that the MoD develop a system
to monitor the effect of its efficiency programme so as better
to enable it to manage its impacts on Service personnel. (Paragraph
30)
Capability Review
9. It
is probably too early to determine the success of these changes.
We hope that the MoD will, in its next Annual Report and Accounts,
describe in some detail the positive impact of the programme stemming
from the Capability Review. We do remain concerned, however, that
the Streamlining Programme, coming on top of the efficiency programme
and accompanied by changes to processes and structures, may inadvertently
affect the quality of performance within the MoD. (Paragraph 34)
Data security
10. We
are concerned to learn that the MoD has been involved in separate
incidents where significant amounts of personal data have been
lost. We are pleased that the MoD has since then put in place
firm measures markedly to reduce if not prevent similar incidents
happening the future. While we agree with Sir Bill Jeffrey that
preventing any reoccurrence of data loss is impossible, we emphasise
that the MoD must show no complacency in this area. We are pleased
to see that the matter is being overseen by the Defence Board,
at the very highest level within the Department, and we expect
clear and full information on progress to date in limiting or
preventing such incidents in the next Annual Report and Accounts.
(Paragraph 41)
Overall performance
11. We
commend the MoD for the efforts it clearly puts into supporting
the Armed Forces and attempting to deliver its SR2004 PSA targets.
However, we are disappointed by the quality of the MoD's forecasting
during the 2004 Spending Review period. We are concerned that
institutional over-optimism might in some areas significantly
impact on efforts to improve performance. We look to the MoD to
make improvements to the accuracy of its forecasting in future
and to inject a greater sense of realism into how its personnel
carry out forecasting in future, and to report progress
on this in its next Annual Report. (Paragraph 44)
12. We do not consider
the MoD's current system of reporting its progress against its
targets to be sufficiently transparent. The response we received
from the MoD to our queries on this issue only emphasises the
unsatisfactory way in which the headlines of the Annual Report
were constructed. When targets comprise many sub-targets, when
subjectivity is key to measurement, when no metrics are provided
to assess what is meant when a sub-target is 'partly met', there
is clearly insufficient transparency. We understand the need sensibly
to balance clarity and accuracy with brevity. Nonetheless, we
recommend that the MoD develop a more accurate method of measuring
its progress against targets for next year's Annual Report and
Accounts, and at the very least make performance against sub-targets
a much more prominent part of that Report's headlines in future.
(Paragraph 49)
Operations
13. We
encourage the MoD to look into making publicly available as many
of the unclassified elements of assessment within this area as
possible, but we understand the operational sensitivities will
mean that this area of performance will necessarily remain less
accessible to the public than other areas of the MoD's performance.
(Paragraph 51)
Conflict prevention
14.
We accept that a number of the outcomes set out in the MoD's Public
Service Agreements for the period from 2004 to 2008 and in its
Departmental Strategic Objectives for the period from 2008 to
2011 are not subject to easy measurement. We also accept that
the MoD's own direct influence in relation to some of its international
objectives will be necessarily limited. However, we reiterate
the need for the MoD to try to develop more rigorous and objective
methods for assessing performance. (Paragraph 53)
Readiness
15. We
find it perplexing that the MoD thought for so long that it would
not fail against this readiness target, especially since it understood
that the Armed Forces were "continuing to operate above the
overall level of concurrent operations which they are resourced
and structured to sustain over time" (Paragraph 55)
16. We welcome the
openness that the MoD has shown in explaining the complex metrics
for measurement of performance with regard to readiness. We expect
an assessment in the Spring Performance Report of how the MoD
considers the new metrics to be working. (Paragraph 57)
17. This continuing
poor performance against readiness targets is serious. As the
MoD's recent Autumn Performance Report accepts, it limits "the
ability of force elements to engage in new contingent operations
and military tasks". It also reveals the significant stresses
which exist currently upon manpower, equipment, training and logistics.
This puts into stark perspective the UK's capacity to sustain
current operations into the medium term. (Paragraph 59)
18. Restoring full
contingent capability for our Armed Forces is one of the most
pressing issue the MoD faces. It is essential that the MoD's programme
of recuperation is effective and places no further strains upon
our Armed Forces. We are particularly concerned that the programme
is founded upon assumptions as to commitments which the UK Government
may not be able to keep to over this period. We therefore stress
to the Department the importance of this programme being able
to take account of increased deployments in Afghanistan or new
smaller operational commitments while still aiming to recuperate
force elements to the required level in a reasonable time-scale.
(Paragraph 62)
The European Security Agenda, NATO and ESDP
19. Other
departmental select committees have in the past expressed concern
about targets shared between departments, on the grounds that
each department involved is tempted to believe that principal
responsibility for action or success lies elsewhere. This is clearly
unsatisfactory, and it is vital that areas of responsibility and
sub-targets within each target are formally assigned to particular
government departments so that lines of activity and responsibility
are clear. (Paragraph 63)
Armed Forces personnel
20. Personnel
and manning issues are clearly another area of the MoD's performance
that needs addressing as a matter of urgency. The recuperation
programme which the MoD is about to put in place to assist in
improving readiness levels following the drawdown in Iraq will
have to focus not just upon equipment and training issues but
also upon manpower issues. (Paragraph 69)
Equipment
21. We
are not satisfied with explanations that have been given by the
MoD as to what it intends to do to rectify this decline in performance
with regard to defence equipment, and we will be returning to
this matter in the future. (Paragraph 70)
Future DSO targets
22. We
will monitor the MoD's reporting under this new system and call
upon the MoD to include reporting on its work under the FCO-led
PSA 30 in quarterly reports in future. (Paragraph 74)
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