The Strategic Defence and Security Review - Defence Committee Contents

Memorandum from the Ministry of Defence

  1.  The Government's primary responsibility is to ensure national security. The Coalition Partnership Agreement and the Queen's Speech set out the Government's commitment to holding a full Strategic Defence and Security Review (SDSR) alongside the Spending Review, with strong involvement of the Treasury. It is overseen by the National Security Council (NSC) alongside development of a wide ranging National Security Strategy (NSS). The combination of the SDSR and NSS will provide a coherent approach to security across Government and ensure the right balance of resources to meet our commitments. It is a fundamental objective to ensure that our Armed Forces have what they need to do what is asked of them.

  2.  The approach being taken by the NSC involves analysis of national security policy and capability across all relevant Government Departments and agencies. For this reason the Review is being led from the centre of Government, the Cabinet Office working with the Treasury. Defence capabilities and resources are accordingly being considered alongside all other security capabilities in order to measure the relative cost effectiveness of each. Cost effectiveness of capabilities will be measured by what they offer and how effective they are at addressing the defence and security challenges of the 21st Century. This will enable Ministers to consider relative priorities across all national security capabilities in an integrated way. Depending on the outcome of the SDSR, some national security capabilities may be reduced to enhance others if that provides the most effective means of protecting the UK's national security interests. The Review will conclude in the autumn in parallel with the Government's Spending Review. Its conclusions will be published in a pan-departmental White Paper.

  3.  The Government is committed to playing a leading role in making the world safe from the dangers of nuclear weapons and nuclear proliferation. The recent Nuclear Non-Proliferation Treaty Review Conference was an important milestone in the long-term vision of a world without nuclear weapons, providing a map to help us move forward. In May the Foreign Secretary announced that we would review the circumstances in which the UK might use nuclear weapons and made public for the first time the maximum number of nuclear warheads we hold in our stockpile to assist in building a climate of trust between nuclear and non-nuclear weapons states. This goes further and is more transparent than any previous Government. The Government does not, however, judge that this is the right time for the UK to give up its minimum nuclear deterrent. Within the framework of the SDSR the MoD is scrutinising the renewal of our Trident-based nuclear deterrent. This is a value-for-money study reviewing existing plans. It is not a review of all the possible alternative ways to provide nuclear deterrence. MoD work on this should be completed by the end of July for subsequent consideration by the NSC, and its conclusions will inform the SDSR and the Spending Review, the conclusions of which will be published in the Autumn.


  4.  The new NSC provides high-level strategic guidance to Departments, co-ordinates responses to the dangers we face, and identifies priorities. It is chaired by the Prime Minister and meets roughly weekly. Other members are the Deputy Prime Minister, the Chancellor of the Exchequer, the Secretary of State for Foreign and Commonwealth Affairs, the Home Secretary, the Secretary of State for Defence, the Secretary of State for International Development and the Security Minister in the Cabinet Office. Other Cabinet Ministers, the Chief of the Defence Staff, Heads of Intelligence Agencies and other Senior Officials attend as required. The work of the NSC is co-ordinated by the National Security Advisor, Sir Peter Ricketts (formerly Permanent Secretary at the Foreign and Commonwealth Office), who chairs a weekly Permanent Secretary-level official group, the NSC(O), in advance of NSC meetings, and is supported by the National Security Secretariat, based in the Cabinet Office.

  5.  In addition, specifically to oversee the work of the SDSR, the National Security Adviser chairs a Strategic Reviews Steering Board, also at Permanent Secretary level. This is supported by a lower-level pan Departmental SDSR Coordination Group that meets as necessary to deal with issues that do not need to come to the Strategic Reviews Steering Board or the full NSC. Within the National Security Secretariat a division of about 30 people has been established to lead the SDSR, including military personnel, and civil servants from the MoD, the Foreign Office, DfID, the security and intelligence agencies and the Treasury, seconded for the duration of the Review. It comprises six teams covering:

    — project management, responsible for overall planning and coordination;

    — defence, headed by an Air Commodore; responsible for liaison with the MoD and the delivery of defence inputs to the National Security Strategy and SDSR;

    — nuclear and arms control issues including:

    — counter proliferation, arms control and chemical/biological/radiological/nuclear response,

    — nuclear security,

    — deterrent value for money,

    — security issues, coordinating input on cross-cutting security issues including:

    — terrorism,

    — fragile/failing states,

    — civil emergencies,

    — energy and climate security,

    — cyber security,

    — serious organised crime,

    — border security,

    — overseas networks,

    — stabilisation force,

    — key policy choices, responsible for defining key pan-Government policy choices and trade-offs including:

    — strategic sovereignty,

    — multinational cooperation,

    — defence diplomacy,

    — conventional deterrence and coercion,

    — conventional threat,

    — military assistance to the civil authority,

    — overseas basing,

    — legal and social constraints,

    — resources, responsible for liaison with HM Treasury to ensure alignment with the Spending Review, analysis of budget positions and options, and development of the resource framework (including options for reserve and pooled budgets).


  6.  The MoD started preparing for a Defence Review in late 2009 following the commitment by all three main political parties to a review following the General Election. Preliminary work focused on setting out the strategic context in which the Review would take place and establishing some of the strategic questions it would need to answer. These were set out in the Green Paper (Adaptability and Partnership) published in February 2010 under the last Government with cross-party support. It set out several key principles:

    — That the Government will continue to need to act abroad to tackle threats at their source, and to intervene to protect the UK's interests overseas.

    — The need to strengthen a comprehensive and effective approach across Government, with stronger co-operation between military, stabilisation, development and diplomacy efforts across Government to apply civilian and military effect together.

    — The need to strengthen partnerships to enable us to work together more quickly and more effectively with a more diverse group of allies, including in Europe.

  7.  Between publication of the Green Paper in February 2010 and the General Election in May the Department followed a twin-track approach. The first comprised a range of preparatory studies of issues, flowing in the main from the Green Paper. Given their preparatory nature they did not seek to address key questions or reach conclusions on Defence outputs, force structures or capabilities but sought rather to compile baseline data for the Review and explore the case for further work. The main areas examined were:

    — Personnel, training and welfare (including Service personnel policy, the independent review of defence civilian personnel conducted by Mr Gerry Grimstone, individual training and education, and medical services).

    — Infrastructure and support arrangements (including the scope for estates disposals, and estate management arrangements).

    — Key force generation factors underpinning overall personnel numbers and equipment holdings relative to the forces we are able to deploy.

    — Organisation and management (including preliminary work on defence administration costs and on the single Service command structures).

    — Security policy (including on the defence contribution to influence and strategic communication and to arms control and counter-proliferation, military assistance to the civil authority, horizon scanning, and the UK's contribution to NATO, the EU and the UN).

    — A limited number of studies into specific capabilities (including cyber, space, and missile defence).

  In parallel, the Department maintained its engagement with the wider Defence academic and specialist community to ensure that we continued to draw on that external expertise and encourage participation in the debate.

  8.  The Department also worked on developing modelling and costing techniques, reviewed its strategic planning process and methodology to put in place a streamlined system to support the Review and its implementation, and conducted studies to understand the financial and industrial consequences of making changes, particularly to the equipment programme.


  9.  The Secretary of State for Defence, Dr Liam Fox, set work in hand on the Defence contribution to the SDSR immediately on taking office on 12 May. He has stated that the UK's defence must be based on a clear definition of our strategic interests, an assessment of our role in NATO and other partnerships, the threats we face, the military capabilities we need to protect our interests, and the programmes we need to deliver those capabilities. This should take into account the many things the Armed Forces can do to promote the national interest and support Government policy more widely. The primary function of the Armed Forces, which can be provided by no-one else, is in the last resort to fight and kill in defence of the UK should that be needed. As a result of that capability they are also able to dissuade aggression by deploying military force to deter and contain threats, and the SDSR will take a fresh look at how we might do this better.

  10.  Reflecting these parameters, three core principles underpin the work being taken forward in the Review:

    — Relevance: Defence posture and capabilities must be relevant to the world we live in. The SDSR represents the opportunity to dispense with much of the legacy of the Cold War.

    — Realism: resources are tight for the country as a whole and Defence is no exception. We cannot insure against every imaginable risk so we will need to decide which risks we are willing to meet and which risks we are willing to take.

    — Responsibility: the nation has a duty to support the members of the Armed Forces in return for their service on our behalf. In recognition of the demands that the country places on them, the Government is determined to ensure that they have what they need to do what we ask of them, and that they and their families are looked after properly during and after service. In particular it is committed to improve the package of welfare and health care, particularly in the area of mental health, and to make improvements to accommodation wherever possible within budgetary constraints.

  11.  Defence is not immune from the economic realities the country faces. In every aspect of Defence, and particularly in the support area, the Government will bear down on costs, seeking improved value for money and greater efficiency wherever possible. This will include following through on its commitment to reduce the MoD's running costs by at least 25%. But the current programme is unaffordable, with a deficit of many billions of pounds over the life of this Parliament, and more over the next decade. A number of structural pressures exacerbate the situation including the trend of above inflation pay increases and the increasing cost of successive generations of equipment. Moreover, contractual and structural commitments on personnel and equipment mean that the current Defence budget is heavily committed for several years, severely limiting the Department's room for manoeuvre. In this context, no matter how hard we bear down on the costs of administration and drive up efficiency, these alone cannot bridge the gap; the problem is structural and will require a structural response.

  12.  The Government is determined to bring Defence policy, plans, commitments and resources into balance, and produce over time a transformative change to the UK's Defence. Restoring Defence to a stable financial footing in the SDSR and Spending Review will therefore require radical thinking and reform. In the context of the SDSR the Government will review all that the MoD currently does, including the organisation and structure of the Department, each of the Services and the support area. At the heart of this work is a thorough examination of the force structure, looking at the overall shape, size and role of Armed Forces personnel, including the Reserve Forces, and MoD Civil Servants. This will ensure that Defence resources match the UK's Defence policy requirements, and that the Defence budget is spent as efficiently, effectively and economically as possible. This will require tough decisions that will impact on many areas of the Department and the Armed Forces. There will inevitably be reductions in some areas in order to enhance others and provide the most effective range of capabilities to defend the UK's interests.

  13.  It is essential that the Armed Forces are re-configured to meet the needs of the evolving security environment and the UK's foreign policy goals. Within the overall framework provided by the NSC the Department is taking forward a range of detailed studies on specific capabilities and force structures (paragraphs 16-17). Early thinking, building on the work of the Green Paper, suggests that the Armed Forces are likely to need to be more agile and adaptable and potentially less focused on specialist scenarios; more mobile both strategically and tactically; and more fully integrated across land, air and sea with improved access to Intelligence, Surveillance, Target Acquisition and Reconnaissance capabilities. On the other hand, they are likely to have a smaller requirement for non-precision firepower, be less focused on scale when contributing to multinational operations with the emphasis moving to quality, and bearing down on those capabilities held in large numbers by NATO allies. The Government will begin to reach conclusions only as our strategic posture becomes clearer and we can test our work against the agreed policy baseline to produce a synthesised force structure and risk assessment. Emerging conclusions will begin to be considered by the NSC from late July and August onwards


  14.  The Secretary of State has established the Defence Strategy Group (DSG) to provide top level oversight of the programme of Defence work in support of the SDSR. It is chaired by the Secretary of State, and includes other Defence Ministers; the Chief of the Defence Staff; the Permanent Secretary; the Chiefs of the Naval, General and Air Staffs; the Vice Chief of the Defence Staff; the Second Permanent Secretary; and the Directors General for Strategy, Finance and Security Policy.

  15.  Beneath the Secretary of State and the DSG the Director General Strategy, Mr Tom McKane, is the Programme Director for the SDSR within the MoD, responsible to the Permanent Secretary for delivering the MoD input into the SDSR as directed by the Secretary of State. He is supported in this by the SDSR Programme Board, which he chairs, The Programme Board meets weekly to review the management of the programme and its risks, provide guidance, and consider emerging papers and work. It comprises the Directors General for Finance, Security Policy, Human Resources & Corporate Services, and Defence Commercial; the Deputy Chiefs of the Defence Staff for Capability and for Personnel; the Assistant Chiefs of the Naval, General and Air Staffs; the Director(Strategy and Resources); and the Assistant Chief of the Defence Staff(Strategy and Plans). Day to day management of the SDSR process within the MoD is carried out by the Strategy Unit reporting to the Strategy Director.

  16.  The MoD programme of work under the SDSR has six overlapping phases:

    — Phase 1—Policy Baseline comprises the MoD contribution to the NSC's work to develop the NSS, setting out the Government's foreign and security policy priorities, the national interests, the threats we face, and the broad implications for Defence, to inform the consideration of military capabilities and force structures.

    — Phase 2—Detailed Policy and Capability Studies comprise a set of detailed studies of current and projected capabilities, structures and processes against the emerging security baseline (paragraph 17), creating a menu of options for investment or disinvestment for Ministerial consideration.

    — Phase 3—Force Testing comprises work to look at the effectiveness of possible future force structures against a range of scenarios. A series of Military Judgment Panels are meeting over the summer, drawing on high level operational analysis. Their conclusions will then be developed through further force structure modelling and analysis conducted by DSTL, with the subsequent conclusions subjected to structured senior review, overseen by the Vice Chief of the Defence Staff. This will generate top level military judgment on the robustness of force structure options which might emerge from the Review.

    — Phase 4—Synthesis and Costing will reconcile and synthesise the outcome of the previous phases, balancing requirements against cost envelopes and assessing overall affordability, to produce a synthesised force structure and risk assessment against the policy baseline in the early autumn, taking into account the financial context set in the Emergency Budget and wider SDSR and Spending Review processes.

    — Phase 5—Decisions and Presentation will consist of final decisions in the autumn by the NSC, in coordination with the Government's decisions in the Spending Review. We expect the results of the SDSR to be published through a White Paper; on which the National Security Adviser will lead.

    — Phase 6—Implementation. All decisions made as part of the SDSR will require a clear, resourced implementation plan. Implementation planning will begin in the autumn and continue into 2011. A key element of implementation will be the new Defence Strategic Direction document, which will translate SDSR outcomes into detailed direction for the Department, and the range of supporting sub-strategies.

  17.  Studies. The MoD is currently engaged in some 40 individual policy and capability studies. Each is led by a named senior officer or official with overall responsibility for delivery of the study. Arrangements are also in place to gather together emerging recommendations or proposals on functional lines (such as estates, military personnel, and civilian personnel). All of these studies are contributing to the pan-Departmental work led by the Cabinet Office. The majority are grouped under the 10 broad themes below:

    — Military Training And Personnel:

    — Service Personnel Employment Model.

    — Government commitments on the military covenant.

    — Individual Training, Education and Skills.

    — Civilian Personnel And Training:

    — Personnel Review.

    — Review of civilian allowances.

    — Organisation Of Defence:

    — Rationalisation of warfare centres.

    — Rationalisation of service administration (such as manning, legal, chaplaincy etc).

    — Unified Information Exploitation organisation.

    — Support.

    — Review of the Organisation and Management of Defence (paragraph 21).

    — Military Assistance to the Civil Authority.

    — Technology And Industry:

    — Size and priorities of the Science and Technology budget.

    — Strategic Sovereignty.

    — International Partnership And Basing:

    — Multinational Cooperation.

    — Requirement for Overseas Basing.

    — Defence Diplomacy.

    — Legal and Societal Constraints.

    — Conventional Deterrence, Coercion, Containment and Prevention.

    — Infrastructure And Logistics:

    — Rationalisation and Development of Future Estates.

    — Management of Defence Infrastructure.

    — Defence Medical.

    — Force Generation, Adaptability And Deployabilty:

    — Tour Lengths and Harmony.

    — Multi-Roling.

    — Running Costs:

    — Reduction in Running Costs (paragraph 18).

    — Media and Communications Running Costs Savings.

    — Capabilities:

    — Force and Platform Protection.

    — Simulation, Training and Evaluation.

    — Underwater Environment.

    — Airlift.

    — Helicopters.

    — Command, Control, Communications and Computers/Intelligence, Surveillance, Target Acquisition and Reconnaissance.

    — Force Structure And Capabilities:

    — Maritime Environment Force Structure and Capabilities.

    — Land Environment Force Structure and Capabilities.

    — Air Environment Force Structure and Capabilities.

  We are also conducting studies into Special Forces, and cyber warfare, which do not fit within this overall structure, to provide Defence input into Cabinet Office-led work. Separately, but within the framework of the SDSR, we are conducting a value for money review of existing plans to renew the Trident-based nuclear deterrent (paragraph 3).


  18.  The SDSR is running in parallel with the Government's Spending Review to set Departmental budgets and objectives for the next four years. Work on both of these is being taken forward in a coordinated fashion to ensure that the Spending Review is informed by emerging conclusions from the SDSR and that the SDSR work is informed by the progress of the Spending Review. In the Spending Review all Government Departments are expected to reduce administrative spending by at least one third, drive down the cost of operational delivery and promote greater responsibility by shifting power, funding and accountability into the hands of individuals and front line professionals who are often better placed to allocate limited resources. Several of the detailed MoD SDSR studies are also contributing to this. In particular, the Reduction in Running Costs study will aim to identify how we will achieve the running cost reductions required.


  19.  The Department is also taking forward a number of other major continuing reform programmes. These fall within the broad pan-Government context set by the SDSR and the Spending Review. But they are not part of those Reviews and will continue beyond their conclusion. This continuing work falls broadly into the categories of Acquisition and Organisational Reform.

  20.  Acquisition Reform. The Government intends to carry forward major reform of Defence procurement practices. The Secretary of State for Defence has indicated that the need to focus in the next few months on Afghanistan and on the SDSR may mean not focusing on acquisition until the turn of the year. In the meantime the Department is continuing to implement its Defence Acquisition Reform Programme.

  21.  Organisational Reform. The Government is committed to reducing the MoD's running costs by at least 25%, and in the Spending Review all Government Departments are expected to reduce administrative spending by at least one third (paragraph 18). The SDSR will impact on how defence is structured and organised. The Secretary of State for Defence has set out the need to reorganise the Department into three pillars (for strategy and policy, the Armed Forces, and procurement and estates) with a more efficient and leaner centre where everyone knows what they are responsible for and who they are accountable to, with clear deadlines and budgetary discipline. This is being taken forward by a dedicated Defence Reform Unit in the Head Office. This work will proceed on a separate track with a view to completion by next summer, though early high level findings may be woven into the SDSR. Implementation of a number of existing long-term organisational change programmes, such as the collocation of Defence Equipment and Support project management staff at Abbey Wood, and the consolidation of the Army's Headquarters at Andover, is also continuing.


  22.  We are providing the opportunity for all members of the Armed Forces and their families, and the Defence civilian workforce, to contribute to the Review during July. Recognising that the SDSR and Spending Review are a source of uncertainty for all our staff, military and civilian, we are working to provide as much information as possible to them as the Reviews progress. We are also engaging the Trades Unions, and will of course consult them formally on any provisional conclusions with significant implications for the civilian workforce.


  23.  We are engaging widely through a number of different strands including:

    — Parliament: the Secretary of State for Defence has stressed the importance he attaches to providing Parliament with information Members of Parliament need in order to make representations to the Review. The Government accordingly arranged a full day debate on 21 June to allow Members to set out their concerns and any particular constituency interests. Individual Members can make representations directly to the Secretary of State as a matter of course.

    — Public: the MoD is planning to inform the public primarily through engagement in Parliament, with Defence academia, and through the general and specialist press. We are also receiving and responding to submissions directly from interested members of the public and organisations.

    — Industry: the MoD is engaging with the Defence Industry primarily through the National Defence Industries Council.

    — Allies and Partners: the National Security Adviser is coordinating consultation with key Allies and partners.

    — Academia: the security and defence academic community have an important role in generating ideas and shaping the public debate, and the MoD continues to engage this group both directly and through participation in wider conferences, such as the series on the SDSR organised by the Royal United Services Institute.

8 July 2010

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