Ministry of Defence Annual Report and Accounts 2018 –19 HC 2347 Ministry of Defence Annual Report and Accounts 2018–19 For the year ended 31 March 2019 Accounts presented to the House of Commons pursuant to section 6(4) of the Government Resources and Accounts Act 2000 Annual Report and Accounts presented to the House of Commons by Command of Her Majesty Ordered by the House of Commons to be printed 22 July 2019 HC 2347 © Crown copyright 2019 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available at www.gov.uk/official-documents Any enquiries regarding this publication should be sent to us at DFinStrat-FMPA-ATM-CFAT(Multiuser)@mod.gov.uk ISBN 978-1-5286-1100-8 CCS0319755884 07/19 Printed on paper containing 75% recycled fibre content minimum Printed in the UK by the APS Group on behalf of the Controller of Her Majesty’s Stationery Office Contents Section Page Performance Report Overview Foreword by Secretary of State for Defence 4 Introduction from the Permanent Secretary and the Chief of Defence Staff 5 Defence Purpose 6 Strategic Objectives – Notable Achievements 7 Departmental Structure 8 Modernising Programme 10 Defence Operating Model 11 DG Finance: Financial Performance Summary 12 Performance Analysis Protect Our People: National Strategic Objective 1 23 Project Our Global Influence: National Strategic Objective 2 39 Promote Our Prosperity: National Strategic Objective 3 55 Manage the Department of State and the Defence Enterprise: Strategic Objective 4 67 Accountability Report Corporate Governance Report 103 Remuneration and Staff Report 128 Parliamentary Accountability and Audit Report 151 Annual Accounts Financial Statements 178 Notes to the Accounts 183 Annexes Statement of Approved Maximum Armed Forces Numbers 246 Sponsorship Agreements over £5,000 248 Core Tables 249 Energy and Carbon Emissions Data 253 Water and Waste Data 254 Performance Report 2 Annual Report and Accounts 2018–19 Overview Foreword by Secretary of State for Defence The first duty of Government is to defend our country and to keep our people safe. The Ministry of Defence plays a pivotal role in providing defence and security for our people across the globe, and in doing so we drive a more prosperous economy and allow our nation to thrive. 2018 has been another busy year for Defence and I am proud of all that was achieved during this time. The Modernising Defence Programme is an ambitious programme of work which will ensure that we continue to protect the people of Britain, prevent conflict, and remain the strongest defence player in Europe, at a time when external threats have grown. Through the programme we have established a new set of policy approaches and capability investments that will help us to deliver the right UK Defence in future years and have earmarked funding to drive the development of innovative new capabilities. Supported by the additional £1.8 billion funding for Defence, we will now: mobilise, making the most of what we have to ensure our Armed Forces are the best placed to protect our security; modernise, through embracing new technologies to assure our competitive edge; and transform, by radically changing the way we do business and staying ahead of emerging threats. We have continued to make a difference globally. We have achieved key successes in the fight against Daesh in Syria, provided relief effort to help those affected by the Sulawesi Earthquake and subsequent tsunami, continued our specialist support on the streets of Salisbury and Amesbury, and conducted a number of important exercises across the globe. During the year we celebrated both the centenary of the end of the Great War and the creation of the Royal Air Force and celebrated the 50th unbroken year of the Continuous at Sea Deterrent in April and the 75th anniversary of D-Day in June. We have continued to act as the President of the Chiefs of Defence Women, Peace and Security Network, we have broadened the UN Security Council Resolutions to include children and armed conflict and human trafficking and the network are now running courses in ‘Human Security in Military Operations’, showing how seriously we take this important issue. We have made good progress in support of our Veterans, notably publishing the ‘Strategy for our Veterans’ and accompanying consultations, supported by a new transition policy and I am making it my personal priority that our veterans should not be subject to unfounded allegations of wrongdoing. We continue to support industry and prosperity, publishing the Dunne Review into opportunities for growing Defence’s contribution to UK Prosperity. We have launched the ‘Defence Prosperity Programme’ and published the Combat Air Strategy and the Small & Medium Sized Enterprises Action plan. These will all help us to ensure our economic and national security go hand in hand. We have developed a vibrant Innovation Community across Defence, through Innovation Hubs and an Innovation Advisory Panel, funding ground breaking research through the Defence and Security Accelerator and Defence Innovation Fund, working alongside the private sector and academia to do so. Given all that we have achieved this year I can safely say we are the best Armed Forces and the best Defence Civilians in the world. The Department will continue to do all we can do to make Defence stronger. 4 Annual Report and Accounts 2018–19 Introduction from the Permanent Secretary and the Chief of the Defence Staff The purpose of Defence is to protect the people of the UK, prevent conflict and be ready to fight our enemies and the last year has shown yet again that we can deliver against these aims. Our presence in Iraq and Syria continues, recognising there is still a substantive and pervasive threat from Daesh. We are extending our presence in Afghanistan by committing additional troops and continuing financial assistance for the Afghan National Defence and Security Forces until 2024. We have supported our allies against continued Russian aggression and continue to play a leading role within NATO, taking part in TRIDENT JUNCTURE, the alliance’s largest exercise in years. We have also strengthened our relationships in the Middle East and North Africa, signing the UK/Oman Joint Defence Agreement with Oman and taking part in exercise SAIF SAREEA 3. We continue to provide vital military assistance to Civil Authorities, including in the wildfires in North West England and during the illegal drone activity at Gatwick Airport. The challenge is to mobilise Defence to meet today’s threats. We have started to modernise to embrace new technologies and to ensure we have the competitive edge. Alongside a range of science and technology exercises, the multinational exercise AUTONOMOUS WARRIOR, which combined trials, experimentation and simulation, was conducted to reduce the danger to troops during combat. We continue to work closely with industry. In March we launched our Defence Prosperity programme, informed by the Dunne Review, and in July 2018 announced a major new strategic prosperity relationship with Lockheed Martin Corporation, where we will work together on innovation, research into new technologies and strengthening supply chains. We have made good progress with phase 2 of the Dreadnought programme, which began in April 2018, under the management of the new Dreadnought Alliance. Through our major programmes we have seen HMS QUEEN ELIZABETH enter service and initial flight trials of the F35 Lightning aircraft from her were successful. Over the last year, we have increased our investment in space policy and capabilities and in December attended an annual meeting of senior officials and military officers to agree proposals for strengthening space co-operation in the future. We are also continuing to transform the way we do business. Alongside the changes delivered through the Modernising Defence Programme, we are making good progress with the Enterprise Approach, meaning we can collaborate better with industry on critical skills areas; we have laid the groundwork for trials of our Future Accommodation Model which will begin later this year and have published our Strategy for Veterans. We have published our new Diversity and Inclusion Strategy ‘A Force for Inclusion’; and as part of the introduction of Flexible Service our regular service personnel can now apply to work part time or reduce their separation from their home base to provide greater flexibility for our people, reflecting modern lifestyles, and increasing the attractiveness of our careers. As an organisation we know we need to build a more empowered workforce where we encourage our people to be bold and ask questions. As a result, we have launched an Empowerment Programme to change how we work, in order to deliver on our aims. All this hard work by our people means we will have the stronger Defence required to perform in an increasingly challenging and risky world – we are prepared for the present and fit for the future. Annual Report and Accounts 2018–19 5 Defence Purpose To protect the people of the United Kingdom, prevent conflict, and be ready to fight our enemies. We are prepared for the present, fit for the future. Our aims: Mobilise to make the most of existing capabilities: • Defence already has world-leading personnel and an array of capabilities. We will make the most of these and invest to improve the readiness and availability of key Defence capabilities. We must reinforce and improve our alliances and become fully integrated within the pan-Government effort to amplify our strengths. Modernise to embrace new technologies to assure our competitive position: • We must keep pace with our adversaries by accelerating the development of new capabilities.