It is possible to have some sympathy for the Defence Secretary John Healey, despite the irritating self-serving mantra of Rachel Reeves that the Conservatives have left a £22 billion fiscal ‘black hole’. Healey, generally a straightforward and sensible politician, has inherited a department with huge cultural problems, and real financial issues.
In March, the House of Commons Public Accounts Committee revealed that the MoD’s Equipment Plan for the next decade had a deficit of £16.9 billion, though some have suggested it may be more like £20 billion. Spending is out of control, wasteful, and unrealistic.
The most alarming aspect of this move is that it suggests a catastrophic misdiagnosis
However, the way that the Ministry of Defence is attempting to get on top of its budgetary woes is staggeringly ill-advised. Reports suggest they want to slash the spending ceiling that requires ministerial approval from £2 million to £50,000. In other words, civil servants in the MoD, no matter how senior or experienced, cannot authorise a contract worth more than £50,000. Sources ‘close to’ Healey have responded that ’it’s only right that we take a more rigorous approach’.
It is hardly a sign of confidence in the department’s officials to reduce the amount of spending they can authorise by 97 per cent. Whatever view one takes of MoD civil servants, the implication of this move will be understood for what it is: micromanagement and, to a degree, infantilisation.
The decision also implies that decisions taken by, or authorised by, ministers will be more robust and realistic than those taken by civil servants. That is a major claim to make even implicitly: Lord Coaker is an experienced operators who was a minister in the previous Labour government, but the veterans’ minister, Alistair Carns, although a Royal Marines colonel, is brand new to parliament, and neither Maria Eagle nor Luke Pollard would be in many observers’ first XI of political heavyweights.
On a more practical level, this extraordinary centralisation of budgetary authority risks bringing the department to a grinding halt. It is hardly the case that the Ministry of Defence moves at lightning speed. The Ajax-armoured fighting vehicle, which will be one of the three major platforms for the British Army in the future, has yet to enter service and will not reach full operating capability until 2028 or 2029. It began life as a joint UK/US project in 1996. Equally, its wheeled counterpart, Boxer, is the culmination of a project from with Britain withdrew in 2003 (it is still under trial).
In an organisation that moves at this crawling pace, what is the likely outcome of making any significant spending decision a matter for ministerial approval? There are only five ministers at the MoD, and they have quite enough on their plate as it is, with an ongoing Strategic Defence Review, the war in Ukraine, rising tensions in the Middle East, protecting maritime commerce in the Red Sea and the renewal of Trident. Adding potentially minor spending authorisations to their red boxes means one of two things: either decisions will simply not get made for weeks or months because they are never as urgent as other matters requiring ministerial attention, or they will be agreed without any scrutiny as a formality, in which case the process is no different in character to the status quo, just less efficient.
The most alarming aspect of this move is that it suggests a catastrophic misdiagnosis of the problems facing the department. There is a yawning gap in the Equipment Plan, the operational readiness of the armed forces is woefully inadequate, the government cannot confirm its long-term participation in the multinational Global Combat Air Programme and only one of the Royal Navy’s six hunter-killer submarines has completed an operational deployment this year.
More ministerial scrutiny of everyday spending is not the solution to any of these problems.
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