Report by the Comptroller and Auditor General NATIONAL AUDIT GCE

Ministry of Defence: Control and Use of Manpower

Ordered by the House of Commons to be printed 27 April 1989 Her Majesty’s Stationery Office, London E5.60 net 342 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER

This report has been prepared under Section 6 of the National Audit Act, 1983 for presentation to the House of Commons in accordance with Section 9 of the Act.

John Bourn Comptroller and Auditor General National Audit Office 24 April 1989

.

The Comptrollerand Auditor Generalis the head of the National Audit Office employing some 900 staff. He, and the NAO, are totally independent of Government. He certifies the accounts of all Government depariments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies use their resources. MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER

Contents

Pages Summary and conclusions 1

Part 1: Introduction 6

Part 2: The System of Manpower Control 8

Part 3: Organisation of the Services 13

Part 4: Service Manpower Requirements 18

Part 5: Manpower Options 24

Glossary of Abbreviations 31

Appendices

1. The Higher Organisation of the Ministry of Defence 32 2. The Army Command Structure 33 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER

Summary and conclusions

Background 1. At 1 April 1988, the Ministry of Defence employed 326,300 Service personnel and 175,100 civilians, of whom 9,400 Service personnel were Locally Entered and 31,800 civilians were Locally Engaged. They could also call on some 326,000 reservists. The total cost of pay and allowances for this manpower in 1987-88 was nearly E6,OOOmillion, some 32 per cent of the Defence budget, of which Service personnel, including the reservists, accounted for nearly B,OOO million (paragraphs 1.3-1.4).

2. The Ministry are divided into five management areas, the Central Headquarters and the Procurement Executive, which are predominantly civilian staffed, and the three Services which employ a mix of military personnel and civilians. Contract staff are also employed. The National Audit Office (NAO) examined the Ministry’s control, organisation and use of manpower, primarily within the three Services, to determine whether, having regard to their Defence commitments: - the Ministry have established an effective system of manpower control; - the organisation of the Services has been adapted to take account of changes in circumstances; - there was scope for reducing identified manpower needs; and - there was scope for meeting identified manpower needs more cost-effectively.

The NAO did not consider, as part of this study, the impact of demographic trends on the availability of Servicemen or other forms of manpower.

3. The NAO found that in many respects the Ministry have successfully controlled manpower in what is a very complex area. Taking this into account, the NAO’s main findings and conclusions are:

On the system of [a) Manpower ceilings have achieved significant savings, particularly manpower control in the numbers of civilians directly employed by the Ministry. They have also had some adverse effects on value for money and operational capability. In future, however, there will be more emphasis on control of manpower through operating budgets, instead of numbers (paragraphs 2.3-2.7). (b] All three Services have undertaken some form of wide ranging review over and above the normal process of scrutinies, either to meet manpower ceilings or to increase hont-line numbers, but these reviews were not co-ordinated, did not cover the whole field, were not intended to form a part of the Services’ regular monitoring arrangements, and not all the recommended savings were pursued (paragraph 2.12).

1 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER

(c) The Office of Management and Budget was established in 1985 to provide stronger central determination of expenditure priorities and control of resources. Initially its scrutiny of the requirements was concerned mainly with variations arising from changed circumstances. The Ministry told the NAO that since the cessation of rigid manpower ceilings, procedures have been further developed and more meaningful decisions are now possible on the efficient use of available and funded manpower (paragraphs 2.14-2.16). (d) Because of the difficulty in matching manpower resources to commitments, the NAO considered that a regular, comprehensive programme of reviews of activity should be undertaken in appropriate areas over and above the normal process of scrutinies. They also considered that the Ministry should develop their central capability for forward looking manpower planning and control linked with the Ministry’s New Management Strategy and budgetary systems (paragraph 3.4-3.6). (e) Comparison of the Ministry’s four manpower audit groups showed differences in their level and mix of staffing, the period of the audit cycle and the percentage of Service posts inspected, with only some 159,000 out of a total of 287,000 Service posts subject to manpower audit. The NAO concluded that there should be greater consistency between the audit groups, that more tri-Service audits could be beneficial and that good practice in one Service should be reflected, where possible, in the other two (paragraphs 2.18-2.24). On the organisation (f) The (RN) have responded positively in recent years to of the Services changes in their responsibilities by modifying their command structure (paragraph 3.3). (g) The Army’s command structure, which is more complex than those of the other Services, has remained relatively unchanged in the (UK) since 1973. Currently the Ministry have no plans to carry out a review of the district structure of the Army (paragraphs 3.4-3.6). (h) The NAO noted that the Army’s regimental and corps structures have changed little since the mid-1960s, although numbers have reduced since then by 18.5 per cent. The NAO therefore believe that the Ministry should consider undertaking a review in this area (paragraphs 3.11-3.12). (i) There are significant differences between the Services in the way they man and organise their support functions. Unlike the (RAF) and the predominantly civilianised RN support organisation, the Army maintain 19 uniformed support corps. The Ministry considered that the savings from having a single support corps were unlikely to be great as compared with the impact on morale and the problem of controlling the disparate elements within the corps. However, the NAO concluded that there might be some scope for savings from changes in the corps structure, particularly among the smaller corps, and that the benefits and disadvantages of such changes should be considered as part of the review proposed at (h) above (paragraphs 3.13-3.22).

2 (j) In general the RAF have reduced their command structure in line with their reduced resources and roles, but to a lesser extent in Germany. The Ministry acknowledged that there was scope for some rationalisation in Germany with the corresponding Army Command (paragraph 3.24).

On Service (k) The Service manpower requirements for regular personnel for manpower transition to war and war are assessed at unit and other levels. requirements Although peacetime complements may be separately identified, the transition to war and war requirements form the basis for them, together with a margin for indirect activities. The margins for each of the Services differ significantly in size and content. The NAO consider that the methods of calculation of manpower margins should be put, as far as possible, on a common basis (paragraphs 4.14.4 and Table 5). (1) The Services aim to ensure that all complemented posts can be filled by people of the required quality and with the appropriate skills and experience. Within certain constraints, career structures for both officers and other ranks are shaped to facilitate recruitment and retention; and it seemed possible to the NAO that this could result in more managerial posts than would otherwise be necessary. They noted that, for a number of reasons, the UK might have a higher ratio of senior officers to troops than many other countries. The NAO concluded that the Ministry should consider the scope for reducing further the number of career specialisms (paragraphs 4.54.9 and Tables 6 and 7). (m) All the Services state that where shortfalls in manning exist, they are placing excessive demands on personnel. The NAO examination suggested that there is, nevertheless, some scope for further reductions in requirements in some areas in all three Services and this should be examined further (paragraph 4.30). (n) The NAO were not able to establish that there was a clearly defined war role for all Service personnel but noted the progress being made by all three Services to identify the numbers, ranks and skills of servicemen required during transition to war and war. Once the information is available, the peacetime requirement for Servicemen should be re-assessed and the scope for viable alternatives to Service manpower be explored further (paragraph 4.31). On manpower (0) Servicemen are generally more expensive to employ than the options alternatives of servicewomen, civilians, contractors’ staff or reservists, but the Services have to have regard to operational considerations in their choice of manpower. The NAO noted that the use of servicemen in support areas varies significantly between the Services. They concluded that, in some areas, there is prima facie scope for increased use of the other options (paragraphs 5.1-5.3 and Table 8). (p) The NAO identified some 3,300 servicewomen posts which, prima facie, could be occupied by civilians or contracted out, with potential savings of some ,614 million a year, although they recognised the Ministry’s view that there were wider factors to be taken into

3 account. The NAO noted the steps being taken by the Ministry to consider the wider scope for employing women on tasks traditionally reserved fo’r men (paragraphs 5.4-5.9 and Table 9).

(q) Many reservists have no defined war role, and their anticipated unavailability in the period of transition to war means that many of the tasks they could perform have been assigned to regular troops. The NAO suggested that the Ministry, in conjunction with their work to define the most cost-effective mix of regular and reserve manpower, should consider the scope for increasing the number of reservists in the early selective call-out process under the Reserve Forces Act, and for their increased use for guarding and other duties in transition to war and war (paragraphs 5.18-5.15).

(r) Civilians generally cost less to employ than Service personnel and are as effective in comparable peacetime tasks. The NAO found differences between the Services in the use of civilians in the support functions, an area where there appeared to be greater scope for civilian employment. In 1987 the Ministry began a review aimed at achieving the most cost-effective mix of Service and civilian posts, although no targets for savings from civilianisation were set. They believe the scope for further civilianisation is limited by the need to carry out essential military tasks and the current difficulties they are experiencing in recruiting civilian staff in the necessary numbers. Nevertheless, the NAO concluded that the Ministry should consider the scope for further civilianisation of Service posts in the support functions, after they had defined clearly their transition to war and war requirements [paragraphs 5.16-5.30).

(s) The Ministry have contracted out many activities, mainly involving civilian posts, although they accept there is also scope in areas involving Service posts. However, deficiencies in management information made it difficult to verify resultant savings. The NAO’s examination established that there remained scope for further contractorisation, including complete functions where this is the most cost-effective method of performing a task, subject to operational considerations. It confirmed the need, recognised by the Ministry, for improvements in costing and monitoring of contractors’ performance, and the introduction of co-ordinating arrangements to ensure that the benefits from lessons learnt in one area are realised elsewhere [paragraphs 5.32-5.37).

General conclusions 4. As a major component of the Defence Budget, expenditure on manpower has been subject to rigorous scrutiny during the 1980s and major savings have been achieved or are planned, particularly on civilian posts. These savings have been offset partly by increased use of contractors. In some cases resources have been transferred from support to front-line areas. Civilian manpower ceilings have led to many of the savings, but have also had some adverse consequences. The Ministry’s system of manpower control resulted in the annual budgeting process concentrating on changes from previous years. However, the increased flexibility resulting from the change to control of running costs from 1988-89 should help the Ministry to overcome these problems. While

4 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER more meaningful assessments are now being made, the process could be assisted by the further development of a clearer relationship between present and future manpower resources and commitments and tasks.

5. As circumstances have changed, the organisation of the Services has been substantially reviewed and adapted, the major exception being the Army’s district, regimental and corps structures. Before any change is introduced in this area, any resultant financial savings would have to be weighed against the operational disadvantages.

6. The Services’ reviews which have led to significant savings in manpower have been carried out mainly in specific areas to achieve target savings or to transfer resources to the front-line. This suggests that further savings might result from a regular programme of reviews of activities. Such reviews would have to take into account the work being undertaken to establish the requirements in transition to war and war. There is some evidence that the number of career specialisms results in more posts than are strictly necessary and there appears to be scope for more use of cost-effective alternatives to regular Service personnel. The NAO concluded that there was a continuing need to review the Services’ manpower requirements in peace and war and how these should be met, building upon the ad hoc reviews already undertaken.

5 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER

Part 1: Introduction

1.1 The principal roles of the Ministry of Defence Table 1 and the Armed Forces and, in general terms, the Manpower as at 1 April 1988 commitments which they are required to meat are reaffirmed in the annual Statement on the Defence Estimates. Each of the Services, reinforced by reservists in war, has a separate role in support of these commitments. Central Staffs 1,300 17,300 18,600 1.2 The Ministry’s manpower objectives are: to RN 64,600 32,400 97,000 ensure that manpower is adequate to meet current -Y 157,000 40,900 197,900 requirements; to provide a credible deterrent to any RAF 92,800 19,900 112,700 potential aggressor in peace; to be able to respond Procurement rapidly during a period of transition to war; and to be Executive 1,200 32,800 34,100 able to deploy sufficient forces of the right type to wage any subsequent war successfully. To meet these Sub-total 316,900 143,300 460,300 objectives the Ministry’s policy is to employ a mixture of Service personnel, civilians, contractors Locally and reservists. The type of manpower employed in a employed 9,400 31,800 41,200 particular post is determined as far as possible within financial constraints by the different operational Totals 326,300 175,100 501,500 requirements of peace, transition to war and war, although the Services differ in the implementation of this policy. In peace, the Services need to train for Note: In this and many of the other tables in this war and be ready to undertake full scale operations at report, figures are individually rounded, and thus short notice. In transition to war, the period of may not sum precisely to the totals. heightened tension prior to war, the Services would move to a war footing and reserve forces would be organisation and use of manpower, primarily within mobilised. In war the uniformed manpower the three Services. The aim was to establish whether, requirements would increase considerably and, in having regard to their defence commitments: order to ensure that there is sufficient manpower to meat such a demand, the Ministry employ some - the Central Headquarters have established Service personnel in peace on tasks which could an effective system of manpower control (Part 2); otherwise be carried out by civilians. - the organisation of the Services has been 1.3 Manpower totals have fallen in recant years as adapted to take account of changes in the result of both Government and Ministry of circumstances (Part 3); Defence initiatives (paragraphs 2.4 and 2.5). At 1 April 1988, the Ministry and the three Services - there was any scope for reducing identified employed 326,300 Service personnel and 175,100 manpower needs (Part 4); and civilians (Table 1). - there was scope for meeting identified manpower needs more cost-effectively (Part 5). 1.4 In 1987-88, the cost of directly employed manpower, including pay and allowances and contractors’ staff used by the Ministry, but not 1.6 The NAO acknowledged that the circumstances pensions, was E5,978 million, some 32 per cent of the described in paragraph 1.2 created special problems Defence budget (Figure l], of which Service in the control of manpower. They did not seek to personnel, including 326,000 reservists, accounted for question military judgements and restricted their nearly E4,OOOmillion. detailed examination of tbe scope for meeting manpower needs more cost-effectively to a sample of Scope of the NAO investigation functions in the support areas, where it appeared that alternatives to Service manpower were feasible 1.5 This Report records the results of an [Part 5). A representative sample was examined as examination by the NAO of the Ministry’s control, follows:

6 MINISTRY OF DEFENCE: CONTROL AND “SE OF MANPOWER

Figure 1

Divisions of the Defence Budget by principal headings

Equipment

pJ Forces Pay and Allowances q Forces Pensions c] Civilian Pay

Works and Miscellaneous Stores and Services

11% - Supply, and repair and maintenance - The NAO were informed that the areas of lower risk which are representative of support activities in are a scmrce of manpower available for redeployment which some personnel will have a high risk of in transition to war and war. exposure to opposing forces and will have to work at an increased level of activity during 1.7 The NAO carried out their main examination hostilities; during the latter part of 1986 and 1987. There followed a lengthy period of discussion with the Ministry on the findings from the examination. During that time the Ministry set in hand a number of - Administrative transport, veterinary services reviews of their systems of manpower control, some and pay - where work would continue in of which are still in progress. Details of these hostilities, but only a limited number of initiatives are noted in the relevant Parts of this personnel would be exposed to high risk; and Report. 1.8 In the cowse of their examination, the NAO did - Education - which is representative of that not consider the impact of demographic trends on the part of the infrastructure which only functions availability of servicemen or other forms of in peace. IlMlp0W3.

7 MINISTRY OF DEFENCE:CONTROL ANI? “SE OF tX4NE’OWER

Part 2: The System of Manpower Control

2.1 This Part considers the system of manpower contractorisation and privatisation, and some control operated by the Ministry. The NAO examined improvements in efficiency. Recruitment bans were all the main features, which are: Parliamentary used in some years to ensure that planned targets control: manpower ceilings; the determination of were met on time. requirements: operating budgets; central control of resources; and manpower audits. They also 2.5 Following a period of growth in the numbers of considered the outcome of a major review of their regular Service personnel excluding Locally Entered, manpower control systems commissioned by the from 315,000 in April 1979 to 333,755 in April 1981, Ministry in 1983. Ministers set ceilings for Service personnel which led to a fall in numbers of regular personnel to 316,900 Parliamentary control by April 1988. Figure 2 shows changes in civilian and Service numbers since 1975. 2.2 The Armed Forces Act provides the statutory basis upon which the Services are established. The 2.6 Although manpower ceilings have successfully actual maximum number of personnel who may be reduced the manpower directly employed by the maintained by each Service is presented in the Ministry, the NAO found that they had some adverse annual Ministry of Defence Votes A for Parliamentary effects on value for money. Civilians, who are consent. Since these figures are invariably much generally less expensive than Service personnel, have higher (some 13,000 higher for 1988-89) than the suffered the largest cuts. Some Service personnel, numbers provided for in the annual Supply particularly in the Army, have been employed on Estimates, the latter provide in practice a tighter tasks previously undertaken by civilians. Ad-hoc control. recruitment bans and pro-rata cuts have led to imbalances in skill and grade structures, with the Treasury control and manpower ceilings effects being felt for some time after the resixictions have ended. Some work was contracted out to permit 2.3 While the Treasury retains overall responsibility manpower reductions to meet ceilings without for total numbers and gradings of civilian personnel sufficient weight being attached to the value for in Government departments, they have delegated money aspects of the proposals (paragraphs 5.31- extensive powers to individual departments, 5.37). including the Ministry. Within the Ministry, Service and civilian manpower plans are issued centrally by 2.7 The Treasury, partly in recognition of these the Office of Management and Budget (paragraphs problems, replaced civilian manpower ceilings in 2.14-2.17) to Service and other management areas on April 1988 with a running cost regime. This changed the basis of resources allocated by Treasury. Control the emphasis from control of manpower numbers to of numbersand gradeswithin these plans is exercised control of cash.The Treasurywill continue to by the management areas. In addition, in the case of monitor the Ministry’s forward manpower plans to civilian manpower, an overall coordinating ensure that the relaxation of central control on responsibility is retained centrally by the Principal civilian numbers does not lead to large increases. Establishment Officer. The Ministry’s review of their manpower 2.4 Up to 1987-88, the Treasury controlled civilian control systems manpower through manpower ceilings which were introduced in 1979 in line with Government policy 2.8 In 1983 the Ministry commissioned an internal on reducing Civil Service numbers. Successive annual study, assisted by consultants, to “make reductions in the Ministry’s ceilings, sometimes recommendations on whether changes to the imposed by Defence Ministers in addition to Treasury Ministry’s manpower control systems would make for more economical, effective and efficient use of cuts, reduced civilian numbers, excluding locally employed staff, from 247,660 in April 1979 to manpower”. The main recommendations were that: 143,300 in April 1988. These reductions were [a) the primary determinant of manpower imposed by means of pro-rata cuts in targets and levels should be the cash available in the light of were met largely by reducing staffing levels, competing demands;

8 MNEIXY OF DEFENCE: CONTROL AN,, USE OF MANPOWER Figure 2

Manpower trends in MOD 1974-1988

1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 19871

Year (Figures at 1 April)

0 Navy + Army 0 RAF A Civilian

(b) manpower,like otherresoums,should be Ministry’s New Management Stiategy (paragraph budgeted for, controlled through, and be a 2.13) is in place in the early 1990s. The main changes principal component of, a system of operating since the study report was published in 1984 are cost budgets; and described below. (c) all manpower (Service, civilian, Reserve etc) should be regarded as a single resource. Determination of the overall manpower requirement 2.9 The intention was that each management area would, through the annual budgeting process, review 2.10 Each Service determines its operational its manpower requirements and determine its requirements and the level of support required to programmes and priorities in the light of the maintain units at an acceptable state of readiness. The anticipated availability of suitable manpower and manpower implications of these decisions are cash. Thereafter, the Ministry would analyse these determined mainly through the scrutiny of programmes, considering their sufficiency to requirements in the budgetary processes and the undertake tasks and the possibility of reduced overall audit and complementing of individual units. The resources, and make proposals to bring manpower total Service manpower requirements include the staff and funding into balance. The report was accepted in needed for the various levels of command up to the principle and most of its major recommendations Service Boards; posts within Ministry of Defence were implemented. Implementation of others is Headquarters designated as Service manned; 4,000 proceeding but will not be completed until the liaison, training and NATO posts overseas; and

9 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER various margins (paragraphs 4.34.4). Once Central control of resources established, operational units are subjected to complementing and other ad-hoc reviews. The 2.14 In January 1985, the then Secretary of State complements of support units are subject to the made organisational changes, including the manpower audit procedures described in paragraphs introduction of a new Office of Management and 2.18-2.24. Budget to provide “much stronger central determination of priorities for expenditure and 2.11 In attempting to match estimated requirements control of resource allocation”. The new structure is for Service and civilian manpower to resources and shown at Appendix 1. The Office of Management and manpower ceilings, each Service assumes a shortfall. Budget became responsible for the inspection and The RNbear the majority of shortages ashore in order audit of the Ministry’s activities, including manpower to keep the most important ships fully manned. The audit, and for work designed to further rationalisation Army operate a priority system for all ranks and and standardisation between the three Services and attempt to restrict shortages to non-operational areas. other parts of the Ministry. Whilst the Defence Staffs The RAF aim to fill all officer posts and airmen are responsible for the formulation of operational aircrew posts and, except for a few high priority procedures and prepare their initial requirements for posts, carry any shortfall over the ground airmen both manpower and material, the Office of trades, generally at the ‘lowest rank level possible. Management and Budget scrutinise all major Shortfalls in civilian staff are met by improvements in proposals, including equipment programmes and efficiency or by deferring or dispensing with lower manpower bids. priority tasks.

2.12 In recent years each Service has undertaken 2.15 The Ministry undertake each year a “Long some form of wide ranging review of its manpower Term Costing” of planning assumptions for the utilisation over and above the regular process of Defence programme for the next 10 years. The programme and manpower scrutinies. The aim was to objective is to construct the most coherent and minimise the requirement for Service personnel in effective defence programme within the resources support areas to enable front-line requirements to be available. The planning assumptions which underpin met. The more important of these reviews, which all the process are issued by the Office of Management identified scope for substantial savings, are described and Budget in accordance with priorities developed in Pact 4 [paragraphs 4.16, 4.21, 4.26-l.27). They in conjunction with the Defence Staffs. Alternative were not coordinated and not all the recommended planning assumptions are made: to take account of savings were pursued. The Ministry told the NAO policy options under consideration; to identify that the reviews were not intended to form a regular potential adjustments needed to meet budgetary part of the Services’ monitoring arrangements or constraints: or to reflect shifts in programme priorities cover all areas. within the funds available. As part of this process, the Office of Management and Budget produce overall Operating budgets assessments of manpower requirements and propose ways in which they should be balanced within 2.13 The Ministry introduced Staff Responsibility available resources. Budgets in 1985 to allow line managers sane discretion as to the grade mix of their staff up to a certain level, subject to a number of external 2.16 The Office of Management and Budget’s constraints. My predecessor’s Report on the Financial involvement should provide an independent check on Management Initiative (HC 588 of 1985-86) referred the assessments of manpower requirements made by to the problems which the Ministry were meeting in management areas, including those for the three achieving the objectives of Staff Responsibility Services. The NAO noted that, in the early years of Budgets. The NAO did not carry out further the Office’s existence, their scrutiny was concerned examination of that area during this study. However, mainly with manpower variations caused by the Ministry inforn+ed them that, as part of their New operational or organisational changes. Nevertheless at Management Strategy being implemented in the early the same time, improvements were being made to 199Os, they were developing a hierarchical system of ensure that the numbers allocated to management running cost budgets, operating in all parts of the areas took account of their stated requirements. The Ministry and the Commands, which is intended to Ministry informed the NAO that, with the cessation subsume the present Staff Responsibility Budget of rigid manpower ceilings, the procedures had been system. The new system would provide line developed further and nmre meaningful decisions managers with much greater responsibility for the were now possible on the efficient use of available resources under their control, including manpower. and funded manpower.

10 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER

2.17 The NAO also noted that the results of specific excluded from audit; in consequence, some 128,000 Studies of the sort referred to in paragraph 2.12 were out of a total of 287,000 Service posts are not taken into account in the Long Term Costing process. inspected, the proportion of such posts varying The NAO acknowledge the achievement of those substantially between the Services. In the light of the reviews, but believe that there should be a more differences between the Services shown in Table 2, systematic approach to the consideration of the NAO questioned whether manpower audit manpower utilisation and that a regular programme of techniques could beneficially be applied to a greater reviews of activity should be undertaken in number of Service posts. The Ministry told the NAO appropriate areas. This would provide a better basis that they considered that the scrutiny of tasks for the assessment of manpower requirements by the through manpower audit was an inappropriate means Office of Management and Budget since it was of determining requirements for combat and other difficult to match the resources required with operational manpower, which were a function of the commitments. The NAO further consider that the fighting task and the design of equipment. Combat Ministry should develop their central capability for manpower requirements were, however, scrutinised forward looking manpower planning and control, closely in the Defence programming and equipment linked with the New Management Strategy and planning processes. budgetary systems (paragraph 2.13). Manpower audit Table 2

2.18 The Treasury have defined the role of “staff Manpower audit groups inspectors” in Government Departments to include the audit of the cost-effective use of manpower covering: the need for work; the numbers and grades required to perform the work; and the organisation of manpower. The Treasury exercise oversight of manpower audit by requiring an annual report of the Ministry’s audit activities, and by participating in some of the audits. % Years 2.19 Within the Ministry, manpower audit was Central carried out on an individual Service basis until 1981, Headquarters when it was placed with internal audit and the (Including the Management Services Organisation under the overall Procurement control of a Director General of Management Audit, Executive) Nil 27 27 100 16 who is part of the Office of Management and Budget RN 1 17 18 47 10 (paragraph 2.14). There are four manpower audit Army 9 14 23 34 10 Directorates, covering the three Services and central RAF 10 11 21 96 4 and Procurement Executive staffs. However, the three single-Service Directors are dependent upon their I11Figures are based on audit reports issued during relevant Service Board for resources to carry out the three years to 31 March 1988. manpower audits and are responsible to those Boards [*I With some minor exceptions all civilian posts are for certain other manpower functions. inspected. 2.20 A Management Audit Board was established in 1982 to endorse strategy and annual plans for 2.22 There are material differences in the methods inspection and audit and to receive reports from the used to reach agreement to the Audit Groups’ Director General of Management Audit. It meets twice recommendations. In the Army, auditors have a year, to discuss and approve general strategy and recourse to an Army Establishments Committee to planned programmes, and to consider the previous resolve disagreements. In the RAF the auditors, aided year’s performance and reports and proposed action by their complementing authority for Service posts, on problem areas. ace expected to resolve disagreements at the time of the audit. For the RN and Central Headquarters, 2.21 Comparison of the four audit groups (Table 2) agreement is sought through subsequent negotiations showed differences in the levels and mix of staffing, with line management. In all cases responsibility for the period of the audit cycle and the percentage of implementing agreed recommendations lie with the Service posts inspected. In general, posts which are relevant Service or Central Departments and line established for combat or other operational duties are managers.

11 2.23 Although the level of joint work being carried conduct of manpower audit in the Service out was generally increasing, most manpower audits Departments similarly argued the case for moving to a were based on a unit by unit examination within each unified manpower audit capability coincidentally audit area. The NAO concluded that this primarily with the introduction of comprehensive budgetary single-Service approach may have contributed to systems. The Ministry foresee the need for change mme different and possibly uneconomic manning and propose to link this with the introduction of their policies in the support areas (paragraphs 5.16-5.30). New Management Strategy in April 1991. The NAO The Ministry accepted that a joint approach to the consider that, in line with the views expressed to audit of certain areas of support could be beneficial. Management Audit Board meetings in September 1986 and April 1987, every effort should be made 2.24 As part of its proposals for the control of during the change to adopt a more consistent manpower through operating cost budgets, the study approach to staffing, coverage and the handling of of the Ministry’s manpower control published in 1984 audit recommendations. The Ministry accept that (paragraphs 2.8-2.9) recommended that there should good practice in one Service should be adopted, be a small unified manpower audit cell under the where possible, in the other two and that an increase Director General of Management Audit covering all in the number and scope of t&Service audits could manpower resources. A 1986 study into the future contribute to this objective. MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWSR

Part 3: Organisation of the Services

3.1 This Part examines the organisational structures command organisation consists of two principal of the Service Departments and the Services and headquarters, Headquarters UK Land Forces and considers whether these have been adapted to take Headquarters of the Rhine. At a lower account of changes in circumstances. level there are headquarters in Northern Ireland and various overseas locations. The Service Departments Headquarters UK Land Forces and the district 3.2 Within the Ministry’s central organisation structure matters are dealt with on a tri-Service basis. Single- Service matters are dealt with through the Navy, 3.5 The UK command structure underwent several Army and Air Force Service Executive Committees. major revisions up to 1973, since when it has Each Service Department is responsible for ensuring remained relatively unchanged, with Headquarters the combat readiness and efficiency of its individual UK Land Forces controlling ten mainland Districts. Service. They report through their respective Boards, The District headquarters, which employ a total staff who provide military advice to Ministers. They of around 1,900, handle much of the administrative translate central policy and financial directives into work of the Army units in their area and are specific measures for their Service. The three Service responsible for planning Military Home Defence and Executive Committees will continue to look for ways overseas reinforcement in transition to war and war, to increase their efficiency, including further training, security and military aid to the civil delegation, where practicable, of authority for day to community. day administration to Commanders-in-Chief and 3.6 Each District headquarters is commanded by a below. General and employs between 143 and 291 Service and civilian personnel. The NAO noted that audits of The RN command structure the manpower complements of Wales District Headquarters in 1984 drew attention to some lightly 3.3 Below the Navy Department the Naval loaded posts. The Ministry informed them that a organisation consists of four military commands and a saving of six posts was subsequently implemented predominantly civilian manned support organisation. but they had no current plans to carry out a review of Reporting to the commands are a number of Flag the regional structure to determine, amongst other Officers responsible for types of ships, aircraft, sea things, whether all ten mainland Districts are still areas and ports, and functions such as training. With required. the withdrawal of the RN from locations throughout the world the number of commands has reduced Headquarters British Army of the Rhine and the from twelve prior to 1964 to the present four but the subsidiary command structure Ministry were unable to identify the corresponding staff reductions. A number of studies have been 3.7 Headquarters British Army of the Rhine is a undertaken into the command structure, the most theatre headquarters collocated in peace at recent in 1985. These did not produce any radical Rheindablen with Headquarters RAF [Germany) and proposals for change at that time but the Ministry the equivalent NATO commands. For operational informed the NAO that existing responsibilities reasons, the Army’s area of operation is divided into within the command structure and the Ministry three zones, each with its own headquarters remain under review. employing around 770 staff between them. In the event of war two of these, together with Headquarters The Army command structure British Army of the Rhine and other units, depots and installations would jointly form the British Support 3.4 The Army command structure (Appendix 2) is Command. more complex than those of the other two Services, because of the Army’s size and variety of tasks 3.8 Headquarters British Army of the Rhine employs performed and their separate district, regimental and 730, predominantly Service, personnel and has corps structures. Below the Army Department the responsibility in peace for establishing and

13 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER maintaining theatre policy, operational and logistic Table 3 planning, and administratinn, in~hlding quartering, discipline and welfare. There have been several Uniformed regular personnel in the Combat Arms reviews of the role of Headquarters British Army of and Support Services of the British Army at 1 April the Rhine in peace and war and its relationship with 1988 other headquarters and the Ministry. The most recent in 1984 considered three options: Combat Arms (a) disband Headquarters British Army of the Infantry 37,700 Rhine and relocate functions in either the Royal Engineers 13,300 Ministry, Headquarters UK Land Forces or 12,500 Headquarters 1 (British) Corps, the operational Royal Corps of Signals 11,900 command Headquarters of one of the zones; Royal Armoured Corps 10,300 Army Air Corps 1,600 (b) create an autonomous British Support Command/Division capable of supporting 87,300 Headquarters 1 (British) Corps in peace and war, with a corresponding reduction of Headquarters British Army of the Rhine; Support Services Royal Electrical & (c) restructure Headquarters British Army of Mechanical Engrs 14,100 the Rhine so that it would be better able to carry Royal Corps of Transport 9,100 out its peace and war tasks with the minimum Royal Army Ordnance of upheaval in changing from one to the other - COlp 7,800 under the current arrangements some 50 per Army Catering Corps 4,500 cent of staff would either change job or location Royal Army Medical on mobilisation without time to adjust. Corps 3,400 Royal Military Police 2,200 3.9 Options (a) and (b) were rejected at an early Royal Army Pay Corps 2,100 stage because “severe operational penalties would Royal Pioneer Corps 1,600 result”. The Army Organisation and Manpower Intelligence Corps 1,200 Committee had taken the view that the report’s Royal Army Dental Corps 450 recommendation that there should be no transfer of Royal Army Educational function between the Ministry, Headquarters British Corps 450 Army of the Rhine and Headquarters 1 (British) Corps Army Physical Training was not substantiated in detail, and that it might be Corps 400 necessary to reexamine this area in the future. In the Royal Army Chaplain’s event the study concentrated on option (c) and made Department 150 over 100 recommendations, including many aimed at Royal Army Veterinary improving the transition of the headquarters Corps 150 organisation from a peace to a war footing. Small Arms Schools corps 150 3.10 The Ministry told the NAO that in tbe course Military Provost Staff of tbe present review of Theatre Command Control corps 100 and Communications to find further manpower Army Legal Corps 50 savings by 1991, the relationship between the various Worm& Royal Army headquarters would be addressed and the possibility Corps 4,300 of future internal reorganisation was not therefore Queen Alexandra Royal ruled out. The NAO noted, however, that this review Army Nursing Corps 1,500 would not consider the possible overlap of Staff Posts not related to administrative functions between the headquarters in Corps 800 Germany and the Ministry in London. Lohg Service List 800 55,300 Regimental and corps structure Total trained 142,600

3.11 Unlike the RN and the RAF, the Army operate Personnel under training a regimental structure for combat arms and a corps Total structure for support services (Table 3).

14 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER

3.12 In view of the contribution made by regiments (cl Royal Army Educational Corps to cohesion, fighting spirit and morale in battle, the Army regard them as the key to their operational 3.16 Close integration is required between the effectiveness. Regiments also provide a link for related functions of Service education, which is welfare and recruiting purposes and they are the concerned with general knowledge and basic tactical units. Their size varies according to understanding, and training, which is related to their role from 350 to 900 men. The NAO noted that specific skills. The Services employ nearly 700 the regimental and corps structures have remained Service personnel, mainly officers,and 3,700 civilians largely unchanged since the mid 196Os, although the in education and some related functions, including Army has reduced since then from 194,000 to about library facilities and teaching servicemew’ children. 158,000 personnel and there have been changes in An Army study commissioned in 1983 noted that disposition and tasks. Having regard to that, the NAO there was the possibility of some confusion as to believe that the Ministry should consider undertaking whether members of the Corps were primarily a review of these structures. soldiers or educators. They found that efforts had been made to ensure each Royal Army Educational Corps member had a transition to war and 3.13 The 19 support corps (Table 3) range from the mobilisation role, but they suggested that if the Corps highly specialised, such as the Army Legal Corps, to did not exist, those appointments would be made the large logistic corps. Each corps is completely from elsewhere in the Army or dispensed with. autonomous and maintains separate headquarters, administrative and personnel organisations. The 3.17 Most organisations visited by the Army study following points arose from the NAO’s examination of believed they could meet their own special education the composition and purpose of the relevant corps in needs from within their own instructional ccmrses. the areas selected for examination (paragraph 1.6). However, the study strongly supported the involvement of regular officers in education with full integration into the Army as far as possible and [a] General believed manpower ceilings would prevent widespread civilianisation. The Ministry decided the 3.14 As the RN and the RAF provide their support operational implications in transition to war and war functions without separate organisations, the NAO of any civilianisation needed further study, but asked the Ministry why the Army should not organise recommended that the scope for contracting out or their logistic functions along similar lines with a civilianising particular activities should be examined. single corps. The Ministry explained that the savings This resulted in planned savings of 84 Royal Army to be secured were unlikely to be great as compared Educational Corps posts, of which around 76 were with the impact on morale and the problem of achieved at April 1988. The NAO considered that, exercising taut and effective control cwer the with the ending of civilian manpower ceilings, the disparate elements within the corps. However, the Ministry should consider reviewing the scope for Ministry had not attempted to quantify the likely further savings horn civilianisation and closer savings. integration with military training.

(b) Royal Army Pay Corps (d] Royal Army Veterinary Corps

3.15 The Ministry informed the NAO that the 3.18 The RN and the RAF rely on civilian majority of Royal Army Pay Corps Service personnel contractors to provide most of their veterinary and were currently deployed in field force units which animal tmining support in peace. The Army, with had a war role. Although the NAO accepted that at 1,300 dogs and 600 horses, have the Royal Army local level Army personnel had a role to play in the Veterinary Corps comprising 31 officers, 117 other administration of pay and allowances and other ranks and 39 civilians. In war their operational related duties, they questioned whether there was veterinary role is confined largely to duties associated scope for greater use of civilians, particularly at with dog units. The Ministry informed the NAO that Central Pay Offices, and whether the resulting despite numerous internal studies over 30 years, no mnnhnr of personnel would justify a separate corps more efficient or cost-effective service than the Royal with its related infrastructure costs. If some of the Army Veterinary Corps’ had been identified. The tasks involved could be substantially performed by NAO accepted that the Ministry had given the subject civilians and others merged with other military much thought and winding up the Royal Army duties, the savings could exceed El0 million per Veterinary Corps would only be justified if financial annum. savings ensued. They considered, however, that the

15 MINISTRY OF rJEFENCE: CONTROL AND “SE OF MANPOWER

Ministry should review further the availability and the Women’s Royal Army Corps. The NAO suggesied cost of civilian vets and the arrangements of other that the need for and the cost-effectiveness of large usws of animals. For example, the Metropolitan retaining separate training facilities for the Corps Police support over 200 horses in the London area should also be reviewed. using private veterinary surgeons at an annual cost of about E15,000, compared with the London-based The RAF command structure Royal Army Veterinary Corps staff with annual costs of about EEO,OOOwho support some 400 horses. 3.23 Below the Air Force Department, the RAF are divided into three commands: [e) Women’s Royal Army Corps (a) Strike Command was formed by the merger 3.19 The Services have varying degrees of of Bomber, Fighter and Coastal Commands in integration between servicemen and women. The 1968 and incorporated Air Support Command in Women’s Royal Naval Service and the Women’s 1972. It controls all RAF operational air Royal Air Force are integral parts of the RN and the elements within the UK and overseas, with the RAF respectively and women and men are recruited exception of RAF Germany, through three and posted using the same system and, with few Groups and 25 major Stations. exceptions, share the same training facilities. The (b) Support Command is responsible for Directors of the Women’s Royal Naval Service and the training and logistic support, and has 36 major Women’s Royal Air Force each have a small Stations. Ii was formed progressively from the Directorate to advise the Ministry and the Service on former Maintenance, Training and Signals policy. In the Army, although most servicewomen are Commands in the 1960s and 1970s; the present posted to assist regiments and corps, the Women’s organisation was adopted in 1977. Royal Army Corps provides separate management and administrative systems for its members, as do other (c) RAF (Germany] was formed in 1959. It is corps in the Army. part of NATO’s Second Allied Tactical Air Force. 3.20 Recruit training at the Women’s Royal Army Corps training centre at Guildford, which has annual Within this structure, the apportionment of RAF operating costs of around E4 million, mirrors the Service and civilian manpower as at 1 April 1988 was system of other corps. Women’s Royal Army Corps as follows: officers’ training is centralised at the Royal Academy, Sandhurst, and specialist training of servicewomen is Table 4 carried out at the appropriate trade training school. In the Ministry’s view, any further integration of the RAF manpower as at 1 April 1988 Women’s Royal Army Corps and their training facilities could involve heavy capital expenditure.

3.21 The Ministry considered that while only 20 per cent of Women’s Royal Army Corps officers and 26 Ministry of Defence per cent of servicewomenwere employed and others 8,492 5,105 permanently by other corps, it remained sensible to Strike Command 45,146 4,973 provide a separate career structure and management Support Command 18,458 9,785 for the remainder. However, the Army were RAF (Germany) 11,753 37 considering a significant extension to the numbers of Untrained manpower 5,676 - Women’s Royal Army Corps personnel directly Manning and training managed by other corps. margin 3,766 -

3.22 The Ministry also considered that the central Total 93,291 19,900 focus of the Women’s Royal Army Corps was currently best equipped to deal with alterations to the duties of servicewomen flowing from the contracting 3.24 As with the RN, the RAF have reduced their out and civilianisation of functions, and to provide an command structure in line with reduced resources efficient system to allow their transfer between trades and roles in all areas, although to a lesser extent in and corps. However, the NAO noted that the Army Germany. In the 1950% the RAF Command in study on the future role of women would take Germany controlled two Groups, with 35 Squadrons account of the possibility of the greater integration of at 11 airfields. In 1988 it had 15 Squadrons at four

16 MINISTRYOFDEFENCE:CONTROLAND"SEOPMANPOWER airfields. This reduction has not been matched by a Committee were concerned that certain administrative corresponding reduction in the Command structure, functions are duplicated by the collocated Army because of its NATO role and overseas location; its Headquarters. Whilst pointing to the positive steps current size is about 700 personnel. As already noted already taken, the Ministry acknowledged that there in their recent Report on was a continuing need for rationalisation between the (49th Report, Session 1987-881, the Public Accounts two Services.

17 MINISTRY OF DEFRNCE: CONTROL AND USE OF MANPOWER

Part 4: Service Manpower Requirements

4.1 This Part reviews in more detail the methods complemented posts in 1988, reflects the different used to determine the total Service manpower approaches. requirements which were summarised briefly in paragraphs 2.10-2.12. The Services assess the Table 5 numbers of regular personnel required for transition to war and war at unit and other levels, allowing for Servicemargins at 1 April 1988 the expected availability of reservists. These form the basis of the peacetime complement, to which are RN 14.4 per cenW added: the extra staff undergoing training; an AMY 3.5 ,I 9, allowance for leave and other indirect activities; and RAF: Officers and Airmen Aircrew 5.6 9, 1, allowances for the maintenance of career structures Ground Trades 5.0 I, I, and home to overseas and sea to shore ratios. This Part also considers the Services’ own reviews which ~1 Including specialist training ashore. have led to reductions in requirements; and the scope for further reductions. 4.4 The NAO accepted that over and above the differences in the method of calculation, differences Determination of Service complements at in deployments and methods of operation could unit level justify different Service margins. They noted that RN training is likely to be concentrated on shore at 4.2 The Ministry informed the NAO that, although specialist establishments rather than in situ with differing requirements dictate that each Service units, as in the Army and the RAF. The NAO adopts a somewhat different approach to manpower considered that the method of calculating manpower control, all three Services base their control margins should be put as far as possible on a arrangements on a system of authorised complements common basis, with any unavoidable differences for each unit or establishment. The complement clearly identifiable and open to examination. identifies all posts in the unit or establishment by rank, grade, trade or specialisation. It is determined Career structures by reference to the formal task of the unit or establishment either, as in the case of front-line units, 4.5 The recruiting, training and personnel through an assessment of the military requirement, or management policies of the Services are aimed at by manpower audit. A number of techniques are used ensuring that all complemented posts can be filled by in this process, including the use of “scales”. The people of the required quality and with appropriate NAO examined the procedures for reviewing these skills and experience. Within certain constraints scalesand found that the consequentialrevision of imposedby complementingand other considerations, complements following scale changes had, in a careerstructures for both officersand other ranks are number of cases, produced staff savings. The NAO provided to attract and retain the right people. did not critically examine the scales themselves. Officers Margins for indirect activities 4.8 In all three Services promotion at lower ranks is 4.3 When they have determined their manpower based on time served, subject to being qualified for requirements, the Services add a margin to allow for and recommended for the next rank. At higher ranks, unavoidable absences from productive duty such as promotion is based on selection from those who are training, long-term sickness and leave after overseas qualified on both age and merit grounds and are service, and for non-effective time between recommended for promotion. For example, within the appointments. These are usually expressed as a Army, promotion up to the rank of Lieutenant percentage of the complemented posts. The elements Colonel is generally based upon the ’s included within the margins and the manner of their target that for officers there should be a 70 per cent calculation varies widely between the Services. Table chance of promotion to that rank by the average age 5, which expresses these margins as percentages of of 40.

18 MINISTRY OF DEFENCE: CONTROL AND “SE OF MANPOWER

Other Ranks parts of the public service. For these reasons the UK might have a higher proportion of officers, 4.7 For other ranks career structures are maintained particularly of senior rank, than many other within specialisms and promotion is normally countries. selective. The number of specialisms is shown in Table 6. The maintenance of a large number of Table 7 specialisms could unnecessarily increase the manpower requirement; and a preliminary report of Ratio of Officers to Other Ranks at 1 April 1988 an RAF study of career specialisms within engineering suggested that the number of specialisms could be reduced by a third, with significant savings in manpower requirements. A similar study was being carried out on the RAF’s supply structure. The Ministry informed the NAO that a study was underway in the RN into the merger of the Seaman RN&RM 9,800 52,400 1:5.3 and Weapons Engineering Branches, as well as other Army 16,300 135,500 1:8.3 smaller scale initiatives of a more routine nature; and RAF 14,700 72,300 1:4.9 the NAO noted that the Army kept their number of specialisms under periodic review. The Ministry ‘l’ Excludes personnel in the Women’s Services and agree that the more fundamental type of review female members of the Nursing Services. carried out in the RAF and the RN could be extended Managerial posts to other specialisms in all three Services. 4.9 Because of the need to maintain the career Table 6 structures described in paragraph 4.5, it seemed possible to the NAO that this could result in more Specidisms as at 1 April 1988 managerial posts than would otherwise be necessary. In peace several thousand officers are employed in the Ministry of Defence including the Procurement Executive. The information available did not enable RN&RM 10 77 the NAO to establish whether all these and other &my 25 165 Service personnel had a designated war role. RAF 23 111 The Services’ systems for determining (*I Excludes personnel in the Women’s Services and personnel requirements the Nursing Services. 4.10 The following paragraphs contain the results of the NAO’s examination of the systems for Officer to Other Ranks ratio determining the numbers of Service personnel required, and the reviews carried out by the Services 4.8 Table 7 shows the ratio of officers to other ranks themselves. The NAO examined the employment of in the three Services. Information was not available in Service personnel in peace, and their transition to the Ministry for a valid comparison to be made war and war roles in the six selected areas [paragraph between the UK ratio of officers to other ranks and 1.6). They sought to establish that the requirements those of other Armed Forces. The Ministry cited a had been clearly determined in accordance with number of reasons for this. First, the UK was among a approved criteria. minority of NATO, Warsaw Pact and other leading nations in having no conscript forces, which involves Royal Navy a different approach to training, the application of professional experience, career development, 4.11 RN ships declared fully operational are recruitment and retention. Second, the UK is alone in complemented for war at all times, but not always NATO in not having reserve headquarters or reserve fully manned due to manpower shortages in generals; no new post or headquarters is created on particular trades. During transition to war these ships mobilisation. Third, the ratio within defence and others in a lesser state of readiness would be ministries of Service officers (especially at a senior brought up to full manning by drafting in trained level) to civilians differs widely between countries. Service personnel from shore establishments. Posts in Fourth, it is necessary to make allowance for the such establishments are classified as being needed in differing numbers of officers of each nation seconded “peace”, “transition to war” or “war”, or a to international bodies or, in some cases, to other combination of the three. Selection of personnel to

19 MINISTRY OF DEFENCE: CONTROL AND “SE OF MANPOWER man ships would take account of the classification of time” spent in ports, they were concerned at the the posts they were occupying. The NAO did not number of man leaving the Service because of too question the definition of posts as between categories. much sea service. The problem had been addressed They noted, however, that neither the definitions nor in the form of a recently introduced “Longer Service the war complements were subject to independent at Sea” bonus and other compensations. scrutiny by manpower auditors as in the case of the RAF. The Ministry told them that a review of the war 4.15 The RN manpower calculations provide for complement was nearing completion, and a new 21,000 servicemen for manning the surface fleet in computerised system which would allow a better war. The peacetime complement of the surface fleet is assessment of the regular Service manpower approximately 19,000, to allow for unavailability of requirement for transition to war and war was about ships due to refit, repair or maintenance. The NAO to be intmduced. noted that the average utilisation of the fleet in peace was below 60 per cent and estimated that about 4.12 At 1 April 1988 the RN employed 47,000 14,500 servicemen would be required to crew the trained male Service officers and ratings (excluding ships when at sea provided that there is the ability to chaplains and medical personnel). Of these, some transfer between ships when they return to port. The 26,000 were required to man RN ships, submarines NAO questioned whether, given the difference of and aircraft. The remaining 21,000 were shore based some 4,500 between manpower requirements based and principally involved in training, command and on ship usage and those based on ship availability, control, and support. Only 2,200 of the total of 7,400 there is a case for a review of the RN’s surface fleet male officer posts had permanent sea-going duties in manpower requirement in peace. However, the peace although a further ZOOpeace appointments Ministry pointed out that, to maintain availability at involved limited sea time. A review of senior naval little or no notice for operational reasons and to avoid officers by the Ministry’s Internal Audit in 1987 the large increase in training which would be showed that nine of the 83 Commodores and above necessary to operate different types of equipments, and only 19 out of 355 Captains were currently in the ships’ companies must be kept intact even when sea-going jobs. In the light of the current review of ships were undergoing repairs or maintenance. To the RN’s overall requirement (paragraph 4.11), the meet the surface fleet requirement in war of 21,000, NAO did not seek to confirm the need for Service the RN would call upon their peacetime complement personnel to fill all the shore based posts. of 19,000 servicemen and make up the balance of 2,000 from the 21,000 shore-based personnel referred 4.13 In determining requirements, manpower to in paragraph 4.12. specialists have regard to the time personnel spend in overseas posts 01‘at sea. The Ministry told the NAO 4.16 A 1981 study of the scope for manpower that although the RN complement on the basis of the economies in naval training proposed changes requirements of the post, if a serious imbalance involving the closure of some shore establishments develops between sea and shore posts and this leads and a saving of over 1,400 Service posts. However, to accelerated wastage then, in appropriate cases, the significant changes in circumstances, including the process of civilianisation or contractorisation of shore implications for the RN of the F&lands operation, posts is slowed down to avoid further degradation of affected the manner in which detailed the sea:shore ratio which currently standsat 54:46 recommendationshave been implemented. The (a marked increase on former average levels of service underlying principles of the study have been applied, at sea). with the result that three major training establishments have been closed, and further closures 4.14 The NAO noted that, in evidence to the involving transferring training from shore to sea are Defence Committee in March 1988, the Ministry under consideration. There has been a 25 per cent stated that about 40 per cent of “sea-time” was, in reduction in the number of training days and a fact, spent in UK ports. This would distort the actual reduction of 1,864 in the number of uniformed sea: shore ratio. They also noted that the Ministry’s personnel engaged in naval training, against the 1983 review of manpower control (paragraph 2.8) original target of 1,400. suggested that sea: shore manpower planning should be replaced with “sea pay for sea service”, which had 4.17 Other reviews and changes since 1981 have been introduced in the United States Navy with a net resulted in reductions in both Service and civilian saving of manpower and benefits in improved manpower. The changes include: the closure of the retention and increased enthusiasm for sea service. Naval Base at Chatham; the reduction and The Ministry have not yet adopted this concept. They reconstitution of Portsmouth Dockyard as a Fleet told the NAO that, notwithstanding the period of “sea- Maintenance and Repair Organisation; and tbe

20 transfer of Gibraltar Dockyard to the commercial headquarters, as well as the requirements for sector. The number of Naval depots and ranges has redeploying regular personnel in other war also been reduced. The RN’s support organisations establishments, had now been completed at are largely civilian-manned and, overall, the changes command level and was under consideration in the described in this and the preceding paragraph have Ministry before implementation during 1989. The resulted in a reduction of 7,200 Service personnel Ministry are considering also the results of a further (9.8 per cent) and 14,200 civilians (21.5 per cent). study into the logistic sustainability of Home Defence. These figures exclude changes arising from the transfer of 16,500 former Royal Dockyards staff to 4.21 In late 1983, the Army Board noted that, with commercial management. the reduced manpower ceiling proposed for I April 1987, serious shortages of manpower, particularly in 4.18 The NAO’s examination of the selected areas the front-line, would arise with the introduction of (paragraph 1.6) confirmed that savings had been new equipments in the late 1980s. This led to the made in the RN supply, repair and maintenance, and “Lean Look” studies in 1984 (Open Government transport organisations. However, the NAO asked the Document 85/03), which aimed to redeploy 4,000 Ministry about the justification for the separate Royal male Service posts from training and support areas to Marine pay function maintained independently of the front-line units between 1987 and 1990. The studies RN pay function, since both use the same pay system identified potential savings of 4,176 servicemen, 370 and documentation and direct computerised input servicewomen and 2,393 civilian posts. At the time of facilities are being introduced in units. The Ministry the NAO examination, the Army were taking action told the NAO that they considered some form of to save 3,564 serviceman, 367 servicewomen and integration, although possible, would not be cost- 2,177 civilian posts. effective (see also paragraph 5.18). 4.22 The NAO’s examination of selected areas 4.19 Naval tasks extend far beyond sea-going duty showed that: staff savings of 28 per cent in the Army and include such areas as defence policy formulation supply organisation had included some Service posts; and analysis, intelligence, operational requirements a review of the Royal Electrical and Mechanical and ship procurement; and tbe RN are committed to Engineers’ static workshops following the Public an efficiency squeeze, the effect of which will be to Accounts Committee’s 16th Report Session 1981-82 reduce the manpower ceiling from 1 April 1988 to led to the closure of two workshops, reorganisation of 1 April 1993 by one per cent per annum. However, the remainder, a reduction of 605 civilian posts, some taking account particularly of the doubts expressed redeployment of Service personnel and increased above concerning sea: shore ratios, the proportion of contracting out; and the “Lean Look” study will save officers with sea-going duties and the peacetime 600 Service and civilian posts in transport by 1990, complement of the fleet, the NAO concurred with the although a proposed further reduction of 450 posts findings of the Ministry’s own review (paragraph will not be implemented because of severe 4.14), that there might be some scope for savings in operational and training penalties. Naval manpower additional to the significant savings already made. 4.23 The NAO also noted that, in 1985, the then Secretary of State decided not to go as far towards centralisation of the Army pay system as had been recommended by a Rayner Study Team in 1983, 4.20 The peace and war complements of Army because of concern that over-centralisation would service-manned, front-line units are approximately result. However, he requested that the scope for staff the same. In the support areas, peace complements savings should be examined. A limited reorganisation include a relatively high proportion of civilian staff, followed which reduced staff numbers in Army Pay but war complements make increased use of Service Input Centres by 305 from 1,140 in 1983 to 835 in manpower through the use of reservists and the 1987. This compared with the Rayner redeployment of Service personnel from non- recommendation that staff numbers should be operational tasks. The Army use a computer-assisted reduced to 700 following reorganisation. The Ministry individual reinforcement plan which is updated on a subsequently informed the NAO that numbers are quarterly basis to calculate manpower requirements expected to reduce to 600 by April 1989. on mobilisation. The Ministry told the NAO that, although the overall requirements had not been 4.24 The Ministry informed the NAO that their reviewed prior to 1987, the process of verifying the current practice was for establishments to be set on transition to war and war liability of operational the basis of an assessment of the tasks to be establishments, including Home Defence undertaken. However, in assessing bids for increased

21 MINISTRYOF DEFENCE: CONTROL AND USE OF MANPOWER resources, account Gas taken of the manpower likely 4.27 The NAO noted that the 1,063 Service and 99 to be available. Nevertheless the NAO noted the civilian posts saved up to 1 April 1988 f?om apparent inability to match commitments to resources contractorisation of first or second lime repair tasks and the fact that some of the information used to were expected to increase to total savings of 2,184 determine the Army’s requirement for war had not Service and 235 civilian posts by June 1991, been reviewed recently. The main deficiencies were a compared with the 2,335 Service and 155 civilian lack of clarity on the role of certain units and the posts originally identified. The 1981 review also need to review the detailed definitions within the suggested that if all third line repair work was database relating to the roles of reservists and contracted out, potential savings of 5,000 posts could redeployed regular personnel in transition to war and be achieved. This was not implemented because war. However, the review mentioned in paragraph unlike the RN and Army, the RAF decided on 4.20 should define war complements more clearly. operational grounds that they must retain some When these studies are completed, it should be predominantly military third line capabilities. A possible to identify whether there is scope for number of other recommendations were still being possible further savings in Army manpower. considered at the time of tbe NAO’s examination. 4.28 The NAO’s examination showed that the RAF Royal Air Force had a greater proportion of Service personnel in the support organisations than the RN or the Army. In 4.25 Because they would operate mainly from addition, the RAF’s supply organisation, which is known locations in war, the RAF have been able to organised on a different basis, has not to date reduced develop separate peace and war complements for staff numbers on the same scale as the other Services. each unit, as well as the plans and procedures Nevertheless, following a consultancy study, the needed to ensure that personnel can readily be Supply Management part of the RAF’s supply transformed from peacetime to wartime duties. The organisation has been the subject of a major Air Force Department assess the total war reorganisation, involving the collocation and complement, and the numbers of personnel available integration of separate functions and the intioduction to fill it, every six months. Following such an of a more streamlined management structure, which assessment in 1987, a full review of the RAF war is expected to save more than 100 posts. Apart from manpower requirements and of the means of the review of engineering trades and the programme determining them was set in train and is now largely of contracting out (paragraphs 4.25 and 4.261, there complete. During the review over 30 per cent of RAF has been no major reorganisation of RAF engineering unit war establishments were individually staff and repair tasks. Reductions in manpower inspected and there was a shortfall of RAF regular requirements have, however, been made in the course personnel against anticipated war requirements, of normal audit and scaling work. primarily as a result of the increase in the guarding task, which the RAF would expect to make up with 4.29 The NAO concluded that the RAF had reservists in war. However, within the overall achieved manpower savings mainly in support areas, shortfall there were substantial surpluses of highly which had been used to strengthen operational areas. trained personnel, especially in the engineering skills. The NAO noted, however, that work was in hand to Current reviews, both of the engineering trades and of refine and revalidate the RAF’s war requirements and the guardingrequirement, should enablethe RAF to that the needsof the front-line would be considered bring their peacetime strength in individual trades against these revised requirements. In the NAO’s more into balance with wartime requirements, view, this work should also enable the scope for any thereby identifying the scope for increased efficiency further savings to be identified. through the civilianisation and contractorisation of peacetime tasks. Need for further review 4.30 All the Services claim that, where shortfalls 4.26 A 1981 review of RAF support areas identified exist (paragraph 2.11). they are placing high levels of significant potential manpower savings arising mainly overstretch on personnel and are a cause of from contracting out repair tasks The NAO noted that premature retirement. Nevertheless, the NAO a trial of a revised concept for aircraft servicing had examination suggested that there might be some suggested potential savings of up to 1,000 Service scope for further reductions in requirements in some personnel. The Ministry informed the NAO that areas and that this should be examined further. significant savings were being achieved by applying this concept to all aircraft entering service, and that it 4.31 The NAO noted that considerable progress had was proposed to extend its use to existing in-service been made recently in determining the number, rank aircraft in due course. and skills of servicemen required by each of the

22 MINISTRYOFDEFENCE:CONTROLANDLJSEOFh4ANPOWER

Services in transition to war and war. Nevertheless Part 5. The NAO also concluded that there was a they concluded that, once the transition to war and continuing need for review of the Services’ manpower war requirements had been properly formulated, requirements in peace and war and how these should there could be scope for further civilianisation or be met. These reviews could build upon the ad hoc contracting out. The results of the NAO’s reviews already undertaken (paragraphs 4.16, 4.21 examination of these possibilities are described in and 4.26).

,’

.^_. ~.,_ ,. 23 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER

Part 5: Manpower Options

5.1 This Part considers whether the Ministry meet 5.3 The NAO examined whether, in the six selected their manpower requirements in the most cost- areas (paragraph 1.61, servicemen were employed effective manner having regard to the options only on those tasks which could not be performed by available and their transition to war and war the other options, taking account of the Ministry’s commitments. The options considered for front-line criteria, or, if not, that there was a clearly defined war operational tasks are regular servicemen and role for the postholder. The NAO found that the use reservists; for other tasks they also include of servicemen varied significantly between the servicewomen, civilians and contractors’ staff. Regular Services. In some areas there was prima facie scope servicemen are the most expensive alternative for the increased use of civilians, reservists and (Table 8) but are available to undertake a wide variety servicewomen, although some servicewomen’s posts of tasks. could be filled by civilians, as illustrated in the following paragraphs. Table 8 The Women’s Services Comparative costs of Service and civilian personnel 5.4 The Women’s Services employed the following numbers of personnel, excluding the nursing element, at 1 April 1988 (Table 9). Table 9

Officers Numbers of personnel as at 1 April 1988 Major General/Grade 3 58,579 51,518 Colonel/Principal 47,892 27,990 Major/Higher Executive Women’s Royal Naval Officio 33,752 18,575 Service 294 2,656 Other Ranks Women’s Royal Army Sergeant/Administrative Corps 512 4,220 OffiCW 17,175 10,797 Women’s Royal Air Force 792 5,012 Corporal/Administrative Total 1,598 11,888 Assistant 15,280 8,492

01 Staff costs comprise pay, additional pay, ERNIC The Ministry told the NAO that servicewomen and pension and gratuity liability. undertake those support tasks requiring a degree of military expertise,training and discipline; many Source: Ministry of Defence Ready Reckoner of Staff require mobility and flexibility of employment which Costs, 198&89. the Ministry consider can be expensive factors when exercised by civilians and could not be guaranteed to In calculating savings arising from substituting the same extent. The policy of successive civilians for individual Service posts, the Ministry use Governments has been that women should not fill staff costs. However, for larger numbers there could direct combat posts, although since 1980 they have be additional significant savings because of the been authorised to bear arms for self-defence and, in possibility of reducing overheads and training costs. certain cases, for the defence of installations. In determining Service pay, account is taken of the net 5.2 Each Service decide their own manning policy. disadvantages of Service life as compared with The Ministry told the NAO that, as a general rule, civilian life. Currently this equates to 10 per cent for servicemen were employed only where a task servicemen. Since 1 April 1988 the corresponding required military experience, discipline and training, payment to women has increased from 7.5 per cent to where working conditions differed significantly from 9 per cent. civilian norms, or where employing civilians rather than servicemen could threaten an essential 5.5 Women’s Royal Naval Service personnel are operational capability. primarily employed ashore in a variety of tasks. They

24 MINISTRY OF DEFENCE CONTROL AND USE OF MANPOJ,VER are interchangeable with male personnel and on of women in the Army, including the Reserve Forces, occasion may spend short periods at sea. In late 1988 was also underway. The RAF had recently examined the RN decided that their servicewomen should be the limit on the number of airwomen they employ in armed for security and self-defence purposes. The the light of an increase in the level of productive NAO noted the apparently low military content of service and had decided that the number will be 1,385 Women’s Royal Naval Service jobs, including progressively increased over the next five years, from secretaries, administrative personnel, telephonists and the present ceiling of 5,000 to 10 per cent of the total dental assistants which, prima facie, could be trained ground trade strength, or around 7,000 posts civilianised. base on current forecasts. 5.6 As part of the “Lean Look” study (paragraph 5.9 The tasks on which women were currently 4.21) the Army Board approved a revised policy on employed in many cases had a very low military the employment of servicewomen. Under this they content. In all, the NAO identified some 3,300 may not be employed in peace in posts which they servicewomen posts which, prima facie, could be cannot fill in war, nor in establishments where their occupied by civilians or contracted out with a presence would reduce operational flexibility and potential saving of some El4 million a year effectiveness. They must be capable of performing the [paragraphs 5.5-5.7), although they acknowledged full range of individual duties for men in the same that wider factors must be taken into account. The post. Although Women’s Royal Army Corps Ministry stated that some of the servicewomen in personnel are not employed where the primary task is question had war roles or would substitute for male combat, they may be assigned to support tasks for personnel in transition to war or war. They pointed which the bearing of arms for self-defence is out that other factors such as mobility, geographical necessary. But they are usually employed on support location, unsocial hours, discipline, flexibility or and administrative tasks which, prima facie, could be expertise might militate against the employment of filled by civilians. The NAO identified 1,700 such civilians, although the situation was kept under posts. review. The Ministry also stated that, in some areas where servicewomen were employed, corresponding 5.7 Government policy precludes Women’s Royal civilian expertise was not, at present, available or, Air Force personnel from serving in direct combat contrary to the general trend, commanded salary posts in the RAF Regiment and as pilots and levels above Service rates of pay. navigators although their employment in the latter roles is under review. They are currently employed Reservists on other flying duties, as Air Loadmasters and Air Numbers and cost of Reservists Stewards; and will fly as mission crews in the airborne early warning aircraft. In ground branches 98 5.10 The NAO considered the extent to which the per cent of posts are open to female officers and 78 Ministry took account of reservists in assessing their per cent are open to airwomen. From 1 April 1984, regular manpower requirements. The total reserve all Women’s Royal Air Force personnel have received strength increased from 242,500 at 1 April 1976 to firearms training and may be employed on armed 326,000 at 1 April 1988 (Table 10). duties in defence of personnel and installations within station boundaries. Notwithstanding this, the Table 10 NAO identified 238 posts filled by Women’s Royal Air Force personnel which, prima facie, could be Strengths of Reserve Forces at 1 April 1988 filled by civilians. 5.8 The NAO noted that, because the Ministry considered the work to be too physically demanding, RN 27,100 9,800@’ 36,900 servicewomen were excluded from some tasks AMY 167,700@1 84,200’c1 251,900 performed by women in other organisations. For RAF 35,400’d’ 1,800 37,200 example, women are employed as fire-fighters by local authority fire brigades, as dog handlers by the Total 230,200 95,800 326,000 Metropolitan Police and as pilots by some commercial airlines. The Ministry told the NAO in 1988 that they @I includes the Royal Naval Auxiliary Service (3,000). were reviewing the employment opportunities of *I only 104,000 Army regular reserves are available women in all three Services. The recommendations of for deployment. the recent comprehensive study into widening Women’s Royal Naval Service employment are cc’ includes the (6,400) and currently under consideration. An Army study to the Home Service Force (3,100). review the employment, deployment and organisation Id1 includes some 10,000 over the age of 60.

25 MINISTRYOFDEFENCEzCONTROLANDUSEOFMANPOWER

5.11 Reservists receive pay and bounties amounting 5.15 The NAO noted that the transition to war and to El42 million annually. The additional annual cost war roles, which were the justification for employing of Service and civilian staff engaged in the training significant numbers of servicemen in the support and adminiStration of reservists, and other associated areas in peace, included the guarding of military and running costs, is over BOO million. The Government other establishments, outloading tasks and Military are committed to making more use of reservists, Home Defence duties. The NAO considered that there particularly volunteer reserves, which they believe is might be scope for increased use of reservists for the most cost-effective way of enhancing the front- guarding key points and other duties requiring line capability of regular forces. The Ministry plan to limited training, thus releasing regular forces for expand further the size and role of their volunteer higher priority and more specialist tasks. The reserve strength. They are considering the most Ministry intend to keep the possibility of allocating appropriate mix of reserves and regulars, taking into more reservists to Home Defence roles under review account the lower costs of the former but the greater over the next few years as additional reservists availability and higher level of training of the latter. become available, but the likelihood was that most of these would be required for existing commitments. Restrictions on the use of Reservists Civilians 5.12 The Government rely on the powers available under Section 10 of the 1980 Reserve Forces Act for 5.16 For non-operational tasks and where the the early call-out of reservists. The NAO noted that criteria for Service manning (paragraph 5.2) do not before the necessary Orders were implemented and apply, the Ministry have the option of employing the reservists available, regular troops would carry civilians or using civilian contract staff. The Public out tasks which would be assigned to the reservists. Accounts Committee in their First Report of Session The unavailability of the reservists before formal call- 1984-85 on “Maintenance of major RAF equipments” out would increase requirements for regular forces in noted that, although there were few specific transition to war and hence in peace also. comparisons of productivity between servicemen and civilians, the Ministry acknowledged that, in almost 5.13 The Ministry pointed out that the decision to all cases, civilians were undoubtedly cheaper man for call up reservists would have high international and man than servicemen. As indicated below, the NAO’s domestic political significance and be taken in very examination in 1986 and 1987 of the allocation of sensitive circumstances. The early availability of posts between servicemen and civilians showed that: reservists in transition to war could not necessarily be there were differences between the Services in the relied on. The NAO agreed but suggested that it use of civilians for functions such as supply, might be worth considering the scope for increasing transport and veterinary services; the case for the number of reservists in the early selective call-out employing Service personnel rather than civilians was process allowed under the Act, notably for Military not clearly established in some areas; and Ministry of Home Defence. The Ministry informed the NAO that Defence reviews had already identified scope for they were examining the scope for the introduction of replacement of some Service posts by civilians or a greater measure of flexibility. contractors.

Scope for increased use of Reservists Royal Navy

5.14 III transition to war and war, reservists would 5.17 The RN employ a greater proportion of reinforce the regular forces by either adding directly civilians than the Army and the RAF. The RN Supply to their number and capabilities, or taking over their and Transport Service is an almost entirely civilian support and Military or Maritime Home Defence organisation. Nevertheless there appeared to be some functions to allow the regular forces to concentrate on scope elsewhere for further civilianisation. Studies front-line tasks. The Ministry recently reviewed carried out by the Ministry in 1985 and 1986 Military Home Defence tasks and resources and estimated that more than 1,000 RN posts at Fleet concluded that there was a current shortfall in the Maintenance Groups might be civilianised. However, manpower allocated to this area. The NAO noted that the RN deferred review of the possible greater use of there was no defined war role for certain categories of civilians or contractors until the effects of the reservists, in total some 65,000 in all three Services, introduction of commercial management into the although they would be liable to recall for appropriate Royal Dockyards had been assessed. duties should circumstances so require. The Ministry told the NAO that the definition of roles was 5.18 Regardless of whether there is a need for a proceeding. separate Royal Marine pay function (paragraph 4.181,

26 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER the NAO noted that civilians would be cheaper to 5.22 The Army run priority freight and container employ than the 55 trained fighting men currently services in the UK and to Germany, with close links employed folly or partly on pay duties. The Ministry to the RAF priority freight service. The Army’s stated that in transition to war or war the marines justification for use of Service drivers on this function concerned would have a military role and be replaced was the need to operate in transition to war and war on pay duties by Women’s Royal Naval Service or and the substantial overtime payments and possibility reservist personnel. The NAO accepted that this of industrial action which would arise with a civilian arrangement allowed strength to be maintained near system. The NAO noted: that the RN’s civilian- the war requirement without also paying civilians for operated freight system would also operate in pay duties, but they noted that possible transition to war and war, and minimised overtime by civilianisation of some posts was nevertheless to be operating a strict control on urgent requirements considered. The RN believed that some other civilian outside normal hours; and that the British Army of pay jobs could now more economically be done by the Rhine freight distribution service relied on Naval personnel as an adjunct to their other work. civilian drivers although it was under military control. 5.19 The NAO also noted that the RN accepted that forther limited savings might be possible by using 5.23 Since most of the supply functions within more Retired Officers and civilians in some education major storage depots are computerised and stock is and related posts, provided that other duties and ordered using standard NATO code numbers, it transition to war needs were not adversely affected. appeared to the NAO that specific military knowledge The NAO considered that this might apply also to the was not required to perform the associated stores other Services. The Ministry are considering the duties. The Ministry believe that Royal Army possibility of rationalising and civilianising some Ordnance Corps’ depots in the UK require some education-related functions, such as children? Service personnel for transition to war and war roles. schools and libraries. However, the NAO noted that additional servicemen were being retained in the depots in order to gain general experience or in case of short notice redeployments.

5.20 The NAO noted that the Army, although 5.24 The Army’s “Lean Look” exercise in 1984 maintaining a policy of civilianisation wherever (paragraph 4.21) examined the role, organisation and practicable, had found that cash limits and reducing structure of the Royal Army Pay Corps. Most of the civilian ceilings in recent years had limited the recommended savings in 210 servicemen’s posts were opportunities for converting Service to civilian posts. to be achieved by more use of civilians (158) and The Ministry informed the NAO that there were also servicewomen (37). The army expected to achieve difficulties associated with recruiting civilians at the 154 of these savings by 1990 but 42 were not current pay levels which acted as a restraint in the actioned because the Army considered that suitable pursuit of a policy of civilianisation. civilians would not be available.

5.21 Unlike the RN, the Army use roughly equal Royal Air Force numbers of Service and civilian personnel for administrative transport duties in their Royal Corps of 5.25 It is the RAF’s policy to achieve the most Transport and also have a mix of personnel in their cost-effective manpower mix from their resources. supply organisation, the Royal Army Ordnance Corps. However, the NAO noted that there were some A 1986 Army study of administrative transport significant areas where this policy had not been considered whether it was cost-effective to replace implemented in full, such as aircraft equipment stores Service drivers by contracted-in civilians. It noted and repair of ground and air equipment; where the that a substantial military element was needed for RAF, like the Army, had been constrained in the past mobilisation purposes but that Service drivers cost by Government policy on civilian numbers. More E3,OOOa year more in basic pay than contracted-in recently, the RAF have been able to institute drivers and E5,OOOa year more than directly civilianisation pr0gmmnw.s involving some 1,000 employed civilians. The study considered the posts, and they accept there is scope for further differences were more than compensated by not civilianisation. They point out that civilianisation is paying overtime to servicemen but the NAO noted constrained by recruiting difficulties in some areas that the difference was equivalent to about 17 hours and that in many cases, additional training and overtime a week. In their view it was unlikely that apprenticeships may be required to replace Service this level of overtime was necessary on a continuous personnel. The NAO considered that there would be basis. off-setting savings in not retraining Service personnel

27 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER on two year postings. Given that the current studies of making more cost-effective use of manpower, of requirements for Service personnel in transition to including further contractorisation, aimed at war and war (paragraph 4.25) indicate that there may achieving the best mix of Service and civilian posts. be scope for reducing the numbers of Service The Ministry decided not to set a specific target for personnel, the NAO considered that the RAF should savings, although the possibility of setting a target for extend their existing civilianisation programme. substantial savings from civilianisation of Service posts was considered. 5.26 The Public Accounts Committee’s First Report of 1984-85 (paragraph 5.16) recommended that the 5.30 The Ministry consider that there is limited Ministry should undertake wider comparisons of the further scope for civilianisation because, in addition costs and efficiency of civilians and servicemen to their primary role, many servicemen have essential engaged on maintenance work, as the basis for a military tasks which would still be required if the fundamental review of whether the operational post was civilianised. Servicemen are also expected benefits, quantified significantly more than was then to work on demand, often at night or at weekends the case, of employing the high proportion of when civilian employees would attract overtime servicemen in the RAF outweighed the potential payments. Moreover, the Ministry pointed out, that financial benefits of more civilianisation. The NAO’s notwithstanding these conclusions, its ability to examination indicated little progress on this but further civilianise Service posts is currently curtailed confirmed the apparent potential for civilianisation by its inability to recruit civilian staffs in the among the 6,400 RAF third line repair posts, since at necessary numbers: at 1 January 1989 its civilian this level the RAF use mainly Service personnel for strength was 2.2 per cant below the planned figure major overhauls in specialist workshops whereas the for 1 April 1989. The NAO, whilst accepting these RN and the Army use mainly civilians. The NAO points nevertheless consider that, because of the noted that any action on this would await the potential savings from lower costs and greater outcome of the RAF’s review of their war productivity, the Ministry should continue to explore requirements (paragraph 4.25). the scope for the civilianisation of Service posts, particularly in the support functions, after they have 5.27 About 65 per cent of RAF drivers are Service clearly defined their transition to war and war personnel. The balance consists of civilians and manpower requirements. contractors’ staff. The RAF are concerned about the numbers of regulars available for motor transport Contracting out tasks in war and they are examining the scope for increased use of reservists. A 1982 study 5.31 The Ministry define contracting out as where recommended the formulation of a policy for the private sector provides a service which the employment of civilian drivers to ensure the most Department needs and which was previously cost-effective Service: civilian mix. This had not been performed in-house. Although the Ministry have pursued because of pressure on civilian numbers but contracted out functions for many years the scale of the Mini&y told the NAO they would progressively contractorisation increased considerably following the civilian& RAF transport posts as opportunities arose. issue of the former Secretary of State’s management principles which stated that, in general, the only 5.28 RAF pay is administered centrally by the work to be carried out within the defence support Director of Personnel Management (Automatic Data organisation was that which was essential to retain Processing) (RAF]. He has 400 staff (including 150 in-house for clearly proven operational reasons, or Service personnel), of whom 110 (including about 60 where there was significant financial advantage to the Service personnel) are involved in pay duties. taxpayer. He believed this policy enabled the Ministry Although the NAO noted that most of the Service to concentrate on their essential business; encouraged personnel had been allocated a war role, they competition; obliged managers to focus on cost- considered there was, prima facie, some scope for effectiveness; and reduced the size of the public further civilianisation in the pay function. sector.

NAO examination

5.29 The Ministry accept that in some cases 5.32 The support functions contracted out by the civilians are more productive than Service personnel individual Services include aircraft servicing, at their primary task and in general are less expensive academic teaching and research, range support in terms of basic pay, allowances and training. In services, stores depots, driver training, catering, June 1987, while the NAO study was in progress, the cleaning and laundry. The contracts are awarded after Ministry decided to undertake a review of the means competition and are for a fixed period with a

28 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER

termination clause. The NAO did not examine cross-fertilisation of ideas between the Services performance on individual contracts and in general it (paragraph 5.42). was too early at the time of the investigation to examine trends in prices after expiry of the first 5.36 The NAO noted that in a few cases, such as the contracts, the bulk of which had been placed RAF accommodation stores depot, complete functions following the issue of the Secretary of State’s or areas had been contracted out. In most cases, only management principles (paragraph 5.31). parts of an area were considered; in others a complete function was considered but only part was contracted out. For example, a private helicopter operator offered 5.33 At 31 March 1988 the Ministry estimated that, to undertake the full range of search and rescue since 1979, the contracting out of Defence support operations currently performed by the RN and the services, excluding the Royal Dockyards, had resulted RAF, at an annual saving of around E24 million. The in savings of some 13,260 mainly civilian posts and offer was not taken up, partly for operational reasons, net annual savings of over E49.2 million. The NAO but the RAF identified some aspects of the work as found that deficiencies in central management possible candidates for contractorisation and one information made it difficult to verify these savings. contract was let. The Ministry’s castings were a measure of the difference in rasourca costs between doing a job 5.37 The NAO also found there were no centrally in-house or by contract. In some cases, Service approved guidelines on the procedures for monitoring personnel might be redeployed as part of the transfer contractors’ performance or costs. Monitoring was not of resources from support to front-line tasks. The being carried out or was being done on an ad-hoc NAO noted that: improvements were seldom made to basis and was of variable quality. In the NAO’s view in-house arrangements before they were costed and there was a need to monitor the overall costs of a compared with contractors’ bids; and the significant particular activity since the contract normally covered redundancy costs arising from contracting out were only labour. not quantified in all cases. Multi-departmental review 5.34 The NAO found that to date the contractorisation effort had largely been directed 5.38 In 1986 the Treasury and the Prime Minister’s towards civilian posts in ancillary functions, as these Adviser on Efficiency commissioned a review in six were most likely to be suitable for contractorisation departments, including the Ministry, to assess: the and because of civilian manpower cuts. There had, ways in which departments identified services which however, also been several examples of contracting might be contracted out; how they tested and out work previously done by Service personnel and evaluated the possibilities: and how they controlled the Ministry accept that there is scope to extend the the delivery of services and ensured that value for policy to more areas involving Service posts. It is money was obtained. Ministry policy to continue using contractors in transition to war and war. Each of the Services has 5.39 The internal Ministry report which preceded negotiated dormant contracts for use on mobilisation the main report concluded that “in recent years the and recent contracts have specified the contractors’ sustained drive to contract out services had produced obligations in war. useful cost and manpower savings without affecting operational performance”. It was, however, critical of certain aspects of the arrangements. While noting 5.35 Within the overall policy set by Ministers the that the absence of rigid central controls was in line Services have discretion as to the activities which with the Ministry’s policy of delegation, it they contract out, resulting in some inconsistencies recommended better co-ordination. It considered that between them in essentially identical areas. For there was a need for clearer guidance on the type of example, the RAF are the only Service to run a major activity to be offered for competition and for a store using contractors’ staff but, unlike the other strategy for retaining essential tasks in-house. Services, they do not use such staff on security duties. The RAF use contract drivers for 5.40 The report also found: that many Ministry of administrative transport at some units, while the Defence managers considered that more attention Army and the RN employ their own drivers. The should be given to increasing internal efficiency Ministry told the NAO that they do not consider that before tenders were invited; that they needed more commonality is automatically an objective in itself help with placing and controlling contracts; and that because the needs of the Services are often different. the primary aim of contracting out was seen as a However, they have action in hand to develop co- means of achieving manpower reductions, ordination of the contracting out programme and the occasionally at greater cost. In this connection the

29 NAO noted eight contracts which had been let at a Current initiatives net additional annual cost to the Ministry of nearly E200,OOO to save 52 mainly civilian posts. The 5.42 The Ministry responded to the report by Ministry told the NAO that this flexibility in cost was setting up a study to establish the extent to which strictly limited and had been withdrawn pending the contracting out had been applied in a systematic way issue of revised guidance reflecting the conclusions of across the Services and, in particular, to ensure that the multi-departmental review. lessons learnt from one area were available to others. They told the NAO that, as a result, a more formalised structure of responsibility and reporting 5.41 The report concluded that, if the Ministry’s has been introduced. Responsibility for competition efforts on contracting out were to continue, they programmes has been formally allocated to would soon have to move out of the area of simple management areas but progress is monitored by the domestic support into increasingly complex subjects, Director General of Management Audit [paragraph 2.19) who reports periodically to the Permanent perhaps involving multiple activity contracts covering Under Secretary and Ministers. Additionally central a number of sites or establishments. It proposed a guidance has been issued emphasising the importance strategy for competition in the Ministry to ensure of value for money criteria. This stresses that the better value for money and more consistent results efficiency of the in-house activity should be from the limited resources available. This proposal established and taken into account where the area is was endorsed in the main multi-departmental review exposed to competition. A more complete and report which acknowledged that the Ministry of comprehensive central record of competition activity Defence had contracted out more mainstream is being assembled and a new and more detailed activities than any other Department, but guidance document for use by line managers has recommended that the policy should be restated to recently been published. This takes into account the revised systems of control; gives more detailed place clearer emphasis on value for money. The costing advice: and stresses the need for closer and Secretary of State endorsed this in February 1987, more relevant monitoring of contractors’ performance confirming that cost-effectiveness and efficiency and costs. The Ministry are also examining the should be the determining factors in contracting out feasibility of placing a number of common support decisions. activities at several units under the same contractor. MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER

Glossary of Abbreviations

NAO National Audit Office

NATO Organisation

RAF Royal Air Force

RM

RN Royal Navy

UK United Kingdom

31 iWNIST&tY OF DEFENCE: CONTROL AND USE OF MANPOWER Appendix 1

32 MINISTRY OF DEFENCE: CONTROL AND USE OF MANPOWER Appendix 2 The Army Command Structure

-.-.--.-.. NOdetails ofstructure show” ------. Link betweencorps and locatIon

...... -AMC -

. . . ..-..----.------AMC -

...... -AMC -

CORPS BRANCHES RAMC Royal Army Medical Corps DGAMS Director General Army Medical Services RADC Royal Army Dental Corps P in C Paymaster in Chief RAPC Royal Army Pay Corps DAVRS Director of Army Veterinary & Remount RAVC Royal Army Veterinary Corps services WRAC Womens Royal Army Corps DWRAC Director of Womens Royal Army Corps MPSC Military Provost Staff Corps PM (Army) Provost Marshall (Army] R&P Royal Military Police DA (Ed] Director of Army Education RAEC Royal Army Education Corps DALS Director of Army Legal Services ALC Army Legal corps CG Chaplain General RAChD Royal Army Chaplain’s Department DGTM Director General of Transport and RCT Royal Corps of Transport Movements RAOC Royal Amy Ordnance Corps DGOS Director General of Ordnance Services Royal Electrical and Mechanical DGEME Director General of Electrical & Engineers Mechanical Engineering ACC Army Catering Corps DACC Director of Army Catering RPC Royal Pioneer Corps DAPL Director Army Pioneers and Labour

33