Conclusions and recommendations
1. It
is a cause of concern to us that the NAO found the need to qualify
the MoD's Resource Accounts for the third consecutive year, particularly
given the assurances made to the Committee by both the Secretary
of State and the Permanent Under Secretary last year. It cannot
be acceptable that the MoD continues to fail to provide accurate
and sufficient audit evidence to support their accounts, both
in relation to personnel administration and stocks and assets.
(Paragraph 7)
2. We agree with the
Secretary of State's assessment that capability in theatre must
be the Department's first concern. However, failing to maintain
accurate and full information on personnel and to keep track of
assets such as Bowman has the potential to threaten the long-term
capability of the Department, including operational capability.
The MoD therefore needs to take urgent action to rectify the outstanding
problems; progress made on implementing the recommendations of
the NAO is welcome, but must continue in earnest, but needs to
be increased. (Paragraph 8)
3. We are concerned
that the resolution of the problems in relation to the JPA that
led to the qualification of the MoD's Resource Accounts last year
has shed light on further problems. It is of great importance
that the remaining problems with the JPA system are resolved as
quickly as possible. The MoD cannot possibly hope to manage personnel
effectively with incomplete or inaccurate information and must
ensure that any further problems that arise are dealt with immediately.
(Paragraph 15)
4. That the MoD could
not, at a given time, account for the whereabouts of radios worth
£155 million is unacceptable. While we acknowledge the difficulties
associated with tracking assets in theatre, particularly given
the deliberately flexible nature of Bowman, the MoD cannot afford
to be complacent in this matter. The security implications associated
with losing equipment such as this are significant; having an
effective audit trail is the only way to ensure that all radios
are accounted for. We hope that the development and roll out of
the Bowman And Communication Management System (BACMS) and Joint
Asset Management and Engineering Solutions (JAMES) systems can
be achieved quickly and effectively. (Paragraph 22)
5. While the sample
taken by the NAO for its analysis is not large, it is statistically
valid. It is possible that the NAO's sample had a higher incidence
of errors than is the case overall, but it is equally possible
that the opposite could be the case. We hope that the NAO will
continue to monitor closely the MoD's management of stock, perhaps
giving consideration to undertaking a broader analysis of this
problem at some future date. (Paragraph 24)
6. It is of course
vital that the MoD identifies and ensures that all staff are aware
of and working towards its key objectives and strategic direction.
We recognise that the Strategy for Defence is designed to respond
to current and short to medium term organisational needs but are
concerned that its five year declared time table should not pre-empt
or restrict the introduction of changes that will be identified
in the Strategic Defence Review. We would expect any organisational
and other management and budgetary measures identified as part
of that Strategic Defence Review to be implemented as soon as
possible and before 2014 as required. (Paragraph 30)
7. While we welcome
the Department's review of its performance management system,
we hope that the outcome of this work will feed into the SDR and
we once again emphasise that new programmes must not pre-empt
the findings of the SDR. (Paragraph 31)
8. While improvements
have been achieved, work to implement the Department's Capability
Review Implementation plan quickly and effectively must continue,
and areas of previously good performance cannot be allowed to
slip. It is vital that staff reductions and Value For Money savings
are achieved without impacting directly or indirectly upon frontline
capability and contingent readiness. (Paragraph 37)
9. The MoD has a poor
record of compliance with data protection legislation. Whilst
we are encouraged by the progress that has made in implementing
the recommendations of Sir Edmund Burton, there continue to be
too many incidents of data loss. The heightened number of incidents
reported in the last year highlights the severity of the problem
and the need for the MoD to continue to be aware of and to manage
the risks more robustly. Unless it becomes evident by the time
of the next annual report that progress has been made, we recommend
that a champion to drive this important area of policy is appointed
at ministerial level. (Paragraph 41)
10. While we accept
that the MoD is following Treasury guidance regarding the use
of terms such as "some progress", we are concerned that
these phrases are unhelpful when used in isolation, without giving
any indication within the Annual Report as to their meaning in
real terms. We recommend that the MoD ensure that an explanation
of these assessments are included in next year's report. Furthermore,
the Department needs to make the basis for these assessments clear.
A full outline of targets and sub-indicators will not be appropriate
in every casewhere there is operational sensitivity, for
example. However, we expect the Department to provide as much
information regarding the assessment of performance as is practically
possible. (Paragraph 47)
11. Given that the
recently published Strategy for Defence identifies operations
in Afghanistan as the Department's "main effort", it
is important that both we and the public are able to make a reasonable
assessment of the Department's performance in this area. The war
in Afghanistan and the casualties incurred are inevitably emotive
subjects. We recognise that the Department cannot make public
all of its activity, but we recommend that the MoD needs to put
more work into accurately conveying its performance on operations
to the public. There are some welcome signs that this is beginning
to improve. (Paragraph 52)
12. The MoD must continue
to work to implement the recommendations of the NAO and PAC as
quickly and effectively as possible. (Paragraph 56)
13. Addressing the
continuing problem of maintaining manning balance, particularly
with regard to pinch point trades, needs to be a high priority
for the Department. This is a long-term concern that directly
affects the operational capability of the Armed Forces. It can
only be addressed by ensuring that personnel are not only recruited
and trained effectively, but that they are retained. To ensure
that the improvements seen in recruitment are reflected in the
long term, the Department needs to ensure that budgets are sufficient
to meet training needs, and that remaining in the Services is
attractive to personnel, both financially and in terms of wider
Service life, such as meeting harmony guidelines. (Paragraph 66)
14. An arbitrary target
on readiness which does not reflect the reality of the MoD's operational
requirements serves little purpose. The MoD needs to ensure that
it communicates the real position of readiness effectively. (Paragraph
70)
15. It may be that
greater accountability over budgets among senior officials would
improve the situation. However, we will be discussing the complex
issues of equipment procurement in greater detail in our separate
Report on Defence Equipment. We welcome the publication of the
MoD's Defence Strategy for Acquisition Reform, which represents
an initial step towards addressing these issues. (Paragraph 73)
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