Examination of Witnesses (Questions 40-59)
SIR BILL
JEFFREY KCB AND
MR TREVOR
WOOLLEY CB
4 NOVEMBER 2008
Q40 Robert Key: But looking to the
future you also say in the same paragraph: "We must address
the risk to our change programmes posed by the decline in overall
satisfaction with the Ministry of Defence as an employer and the
disengagement many of our people feel with them." Looking
ahead for example to the move of Headquarters Land from Erskine
Barracks, Wilton to Andover, first of all the military were very
concerned about this because they thought they might get something
worse rather than something better, but were assured they would
be in a new building, something worthy of Headquarters Land if
they moved to Andover, or somewhere else (because as you know
there were a number of options). In fact, they are going to move
into the refurbished buildings that have been vacated at Andover.
That has had a substantial impact on morale locally amongst the
1,200 people employed at Land many of whom I represent in my constituency.
Although the Wilton taskforce is working well it is also true
to say, I imagine, because of the shortage now of civilian manpower,
that Defence Estates is not able to liaise properly with the local
planning authority to actually manage the change. I was told only
this week about the problems that they are having there. How are
you going to arrest the decline in morale in the dwindling civilian
workforce in order to achieve efficient service for the Armed
Services?
Sir Bill Jeffrey: I am aware of
the Land Command case that you mention and I quite accept that
that will have had an impact on staff there. Across the Department
I think it is the case that during a period of significant organisational
change and upheaval there is an inevitable impact on the way our
staff feel. The surveys that we conduct reflect that but they
also reflect staff who are broadly very committed to the job that
they are doing, feel motivated about it, generally speaking, feel
that they are clear about their role in the organisation, so that
the survey material (and I think some of it is reflected in the
report) does reflect what I would hope are the relatively short-term
consequences of organisational and structural upheaval but it
also reflects staff who, rightly, are proud of what they are doing
and convinced of its importance.
Q41 Robert Key: I am grateful for
that honest assessment. Could we move on to the Capability Review
which found weaknesses in the leadership at the Ministry of Defence,
specifically that the Defence Management Board did not act as
a unified group but represented the interests of different parts
of the Department. Can I be quite clear that I understand this.
What happened was that the Defence Management Board itself was
scrapped and replaced by the Defence Board which was to make high-level
strategic decisions and in addition a new Defence Operating Board
was created to implement those decisions. How does all of that
actually improve leadership within the Ministry of Defence?
Sir Bill Jeffrey: It does not
in itself do so, Mr Key. I think what the Capability Review found,
and in doing so was to some extent reflecting back to us what
some of us had said to the reviewers, was that we needed as a
Board to operate more strategically and more corporately and in
self-critical mode that is what we believed at the time. The CDS
and I have set ourselves the task, in what are very busy times,
of using more meetings to consider the strategic direction of
the Department supported by the Operating Board where the Vice
Chief of the Defence Staff and Second Permanent Secretary in effect
are there to drive through the strategic direction that the top
board gives to ensure that everybody is clear about who is following
through on particular remits. We think it is a better working
model. Whether we are operating more corporately you would need
to ask individual members of the Board. I certainly believe, again
in quite challenging times, the group of colleagues that sits
around the Defence Board table are all fully committed to defence
as an entity. It is inevitable that they bring issues that are
particular to their role in the organisation to the table and
it is right that they should, but I feel—and you will have
to take my word for it I am afraid—that the Defence Board
is cohering and has a common view on what we are trying to achieve.
Q42 Robert Key: Sir Bill, the streamlining
process is going to result in a 25% saving in manpower at head
office. How have you gone about deciding where to make these cuts?
It has been argued by some that management simply said to each
individual division or section in head office each section has
got to cut 25% and you identify how you are going to cut it and
then all those 25% were aggregated into the final figure, which
was not a very coherent way, was it? In management terms you would
not just say every department cuts 25%; you would say perhaps
you need to cut less and you can cut more or we can merge you
here and there? Could you explain the process a little so that
we can understand how efficient and effective the 25% cuts have
been?
Sir Bill Jeffrey: It was not as
crude as you have been led to believe. One has to start somewhere
and there is an element of chicken and egg about this. What the
Board did at the beginning of the process was to take, I would
say, three things. First, we had to reduce numbers because every
government department had an obligation after the Spending Review
to reduce its administrative cost base by 5% a year cumulative,
so we had to reduce numbers by something of this order. Secondly,
we believed it ought to be possible. Thirdly, we saw it as an
opportunity to enable the head office to work in a less elaborate,
simpler, better-defined fashion with quicker decisions and less
elaborate staffing. How we did it was to start by saying that
a 25% reduction overall ought to be possible and then to ask the
three stars in each of the main areas to make an assessment within
their own areas with a starting point that was not 25% in each
case. It reflected a judgment of where it was likely to be least
likely to find savings or most likely, so it was differentiated
from the outset. There was then a process in which those who knew
their part of the business best analysed it and came up with proposals
for ways of doing things differently. Some of these were quite
substantial with different processes, and a redefinition of what
needs to be done at the centre, and out of that came restructuring
with numbers of posts at different levels in each of the main
areas. It came back to the Board and we had to reach a judgment
on how much of this to pursue and how much not to do so, so it
took time, it took longer than some within the organisation would
have wished but I think it was a better process as a consequence.
Q43 Robert Key: Thank you for that.
Finally, would you be so kind as to try and explain to me what
the Chief of Defence Staff meant in a recent article about streamlining.
He said that the streamlining project would help to "stimulate
and embed a more agile way of working across the MoD". Can
you give us some examples of what this will mean in practice?
Sir Bill Jeffrey: The Chief of
the Defence Staff uses the word "agility" a lot and
I think it is a helpful one in this Department. Most members of
this Committee now know us quite well and I think—and I
say that as somebody who has not spent most of my working life
in the MoD—the MoD has quite a strength in terms of its
grasp of its business but sometimes agile it is not. It can staff
the same issue successively at different levels and it can sometimes
embark on very elaborate processes. I think what Jock Stirrup
meant was that there is an opportunity here, if we manage it well,
to address that issue and to enable us to take decisions more
quickly and be clearer about who is actually responsible for taking
them.
Q44 Mr Havard: All this streamlining,
different working methods, agility and all the rest of it, a lot
of it is predicated, as I understand it, on technological support
not the least of which is the Defence Information Infrastructure
Project which, as I understand it, was originally going to cost
£2 billion and now it is going to cost £7 billion and
is late. Perhaps you could explain to us exactly how the support
is going to come through this fewer number of people who are going
to be more agile and do all these things?
Sir Bill Jeffrey: There is a long
explanation of the £2 billion/£7 billion figures that
I had to give to the Public Accounts Committee a few weeks ago.
I think it was actually £3 billion that at an earlier point
was the value of the contracts that had actually been approved.
The £7 billion is the NAO's estimate of what the total cost
of the project, including some associated aspects, will in the
end be. It does not mean that the cost has gone up. The actual
increase in cost is in the small numbers of hundreds of millions,
which is a lot of money but it is barely 3% of the total cost
of the project. I think when they audited it the National Audit
Office felt that this was a project that by the, admittedly unstretching,
standards of government IT procurements was on the right lines.
As far as timescales are concerned, there has been significant
slippage in the roll-out of the terminals which we have had to
accommodate ourselves to, and we are now expecting by the end
of January to have delivered the first group of 68,000, as I recall,
terminals and are well on course for that now.
Q45 Mr Havard: They are all being
trained and this transformation is all taking place seamlessly
to create less people doing more?
Sir Bill Jeffrey: What this is
is a new IT infrastructure which replaces a number of very self-contained
functionalities across the Department. It is not in itself one
of these functionalities; it is the infrastructure in which a
number of other systems reside. Again, I think in project management
terms one of the things the National Audit Office felt we had
done well was not in that sense to bite off more than we could
chew by wrapping individual projects up with the DII. The DII
in a way, which will in time cover the whole of the defence business,
including the deployed part of it, will be the IT infrastructure
by which the whole business does its work.
Q46 Mr Havard: What I am trying to
get at is is the support mechanism that is coming in in concert
with the reduction in the number of people so that you are supporting
a higher level of work for a fewer number of people? Are they
going hand-in-hand or are they disconnected in some fashion?
Sir Bill Jeffrey: Certainly there
has been an extensive training programme and there will continue
to be around the roll-out of the DII. The DII is not itself the
means by which most of these staff savings will be made. They
tend to come from projects like the JPA and the Defence Logistics
Transformation Programme. What it is is the element that unites
them all because many of these change projects are dependent on
having for the first time in the MoD a single IT infrastructure
that enables everything, and there is a lot of associated training,
I can assure you.
Q47 Chairman: Despite the size of
this, Sir Bill, I would recommend that you abandon use of the
phrase "small numbers of hundreds of millions". It does
not go down well!
Sir Bill Jeffrey: I understand
that, Chairman.
Q48 Mr Jenkins: I noticed in one
of your answers, Sir Bill, you said "we reassessed what needs
to be done at headquarters". That always gets an alarm bell
ringing in my head. Have we moved any work or staff out of the
headquarters on to another site?
Sir Bill Jeffrey: There has not
been a block of work that has moved. In two significant areas
there has been the reappraisal of the relationship between people
at headquarters and people elsewhere in the Department. In the
Deputy Chief of the Defence Staff (Personnel) area, some of the
reductions there reflect the changed way of working between DCDS
(Pers), as he is known, and the principal personnel officers in
the three Services. In the equipment capability area, similarly
there has been a discussion between DCDS (EC) and the Defence
Equipment and Support Organisation about exactly what the relationship
between the two is. The consequence of that has been to define
in a more strategic way what General Figgures and colleagues do
at the centre, so it is a redefinition to make the centre of the
Department more strategic.
Q49 Mr Jenkins: So the answer is
yes, that most of them will be?
Sir Bill Jeffrey: I would not
describe it as `moving work'. The answer is that we have found
ways of enabling us to do the work that needs doing at the centre
with somewhat fewer people.
Q50 Mr Jenkins: The percentage of
people, we always have civilian and uniformed in the headquarters,
so what was the percentage of civilian and uniformed? Will it
be the same?
Sir Bill Jeffrey: As I recall,
it is about one in three or one in four of our people in the head
office are military staff. This exercise has scarcely changed
it.
Mr Woolley: The proportions are
very-little-changed, with a very slightly higher reduction in
civilian numbers proportionately than military numbers, but it
is very close, within a percentage or two.
Q51 Linda Gilroy: Sir Bill, the Cabinet
Office has introduced a requirement for all departmental accounts
and reports to list data losses during the year, and of course
the MoD Annual Report lists two serious ones from January and
February of this year, the loss of substantial amounts of data
relating to personnel records containing limited details also
of referees and next of kin. We have been told by the NAO as well
that, since 2004, the MoD has lost 121 memory sticks and 747 laptops.
The Burton Review looked into that and said that there was, nevertheless,
some good practice in the MoD in policy, but, in practice, he
was highly critical that the procedures were not dealing properly
with what should be, in the MoD of all departments, key operational
business and business assets. The Burton Review identified 51
recommendations. Where are we with the implementation of those
recommendations?
Sir Bill Jeffrey: Well, the first
point to make is that we accepted all of them and have established
and published, at the time when the Burton Report was published,
an action plan to implement them, and we are on course with that.
Some of them could be done quickly. We have, in particular, already
encrypted around 20,000 laptops and others will take longer. The
thing that is most challenging, as you implied, is the behavioural
aspect of this. I was dismayed by the sequence of events which
Sir Edmund Burton was asked by me to investigate because it revealed
that, although, as you say, our systems and processes were as
you would wish and our policies were right, it just was not getting
followed through in practice, so, to my mind, the most important
aspect of the Burton Action Plan is the awareness and education
campaign to just drive home to people that this is as important
as it is.
Q52 Linda Gilroy: Well, he said that
that would depend significantly on support and leadership across
the Department. Given that there have been further data losses
more recently, what does that say about leadership? Who owns the
Action Plan? What does it look like in terms of the daily/weekly/monthly
business of what you do?
Sir Bill Jeffrey: The Action Plan
is owned at the centre by John Taylor, the Chief Information Officer,
and he has a team to support him in doing that, but the most important
lead comes, as we were implying earlier to Mr Key's questions,
from the Defence Board. We have been as clear as we possibly could
be across the organisation that this is a very high priority,
which we have established as one of the strategic risks that we
monitor and manage within our Board. Why have there been other
cases? I do not think we are ever going to eradicate in the modern
world the loss of a laptop, for example, or systems of that kind.
What we need to do is to reduce it and very definitely make its
impact less damaging. The most recent case involving the loss
of the hard disks actually resulted from a census by our suppliers
of their removable media, which was being undertaken because of
all the effort we have instigated from the centre to get more
on top of this, so it is work in progress, but it is exceptionally
important work.
Q53 Linda Gilroy: The problem with
it is that any single loss can incur a huge loss of data even
if you reduce the number of actual incidents.
Sir Bill Jeffrey: Indeed.
Q54 Linda Gilroy: I would like just
to ask you about recommendation 17 in particular, which says that
"a coherent joint Service and Civil Service awareness should
be launched on the importance of information and data as a key
operational and business asset, with appropriate attention devoted
to exploitation and protection within the law". What does
that look like from the many individuals in the Department who
have access to, and use, these huge amounts of data?
Sir Bill Jeffrey: Well, it is
happening. It is hard to describe a campaign in a few words in
front of a committee like this, but it is definitely being pursued
energetically. An aspect of it, which I think is, as you implied
when you referred to the recruitment database, very important,
is that this should not just be about the importance of protecting
systems and data security, as such, it must also be about the
proportionality of these systems. One of the problems with the
recruitment data that was in the laptop was that it was more extensive
than it needed to be for its purpose and was not being kept up-to-date
and, in a number of other respects, was not compliant with data
protection legislation, so, in trying to shift the way our people
manage these issues, we are spreading that message as well.
Q55 Linda Gilroy: But surely that
message has to be spread on a regular and consistent basis? Am
I not right in thinking that there are industry standards which
are implemented in the private sector and presumably, through
the Cabinet Office, it is being implemented across government
departments? For instance, from an individual point of view, because
this is about motivating and making sure that individuals pay
attention to this, is it embedded in the appraisal and reporting
system?
Sir Bill Jeffrey: It is, yes.
Q56 Linda Gilroy: And, as far as
the people who accredit these issues are concerned, I notice in
a further recommendation, and I am just interested following on
Robert Key's series of questions to you, that one of the things
that Sir Edmund drew attention to was that the current cadre of
accreditors within the Department was small to cope with the scale
of the task it faces, and they are currently 15 short of the required
manning level of 60. What has been done about that, and presumably
this is an area that has been exempt from the streamlining process?
Sir Bill Jeffrey: My recollection
is that we have been addressing that and the numbers have been
rising, but I do not have a figure in front of me and, if I may,
I might add that to the list of things to give the Committee more
information about.[7]
Q57 Linda Gilroy: Finally, recommendation
38 also referred to another thing that is necessary for the enforcement
of this and just to make sure that people do take it seriously,
and it required that "the MoD should review and formalise
a coherent system of censure and punishment for those who lose,
or compromise, personal data". What has been done about that
so that people realise that there are consequences to being careless?
Previously, in the Second World War, we had "Careless words
cost lives", and, in the Cold War, information issues were
taken very seriously. The consequences of the loss of data in
the modern IT age are even more substantial and, therefore, the
efforts have to be regular, consistent and substantial, and I
just do not get a sense from your responses that that is the case.
Sir Bill Jeffrey: We have to be
fair to individuals when these events occur and, therefore, every
case needs to be looked at individually, but, subject to that,
the information campaign that we have been discussing certainly
includes very clear messages that this is an area where people
will be held responsible and accountable for their actions or
failures, and I think right across government that the climate
on this issue has become significantly chillier and staff know
that they will be severely dealt with if they have actually behaved
negligently.
Q58 Linda Gilroy: So could we have
a note about what that consists of as well because my understanding
is that these very serious data losses resulted in administrative
action rather than anything more serious. When would there be
more serious action than straightforward administrative action?
Sir Bill Jeffrey: Yes, we will
provide something on that.[8]
Q59 Chairman: It would probably not be
a fair question to ask you, but, if a civil servant loses a memory
stick, one consequence follows, and, if a minister loses the same
memory stick, it would be interesting to know what consequence
followed as a result of that, but that would be a question perhaps
to ask the Secretary of State when he comes before us next week.
Sir Bill Jeffrey: I shall warn
him to expect it!
7 See Ev 41 Back
8
See Ev 41 Back
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