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Stephen Lovegrove on Managing the UK Ministry of Defence

05 March 2018, 13:00
RUSI Whitehall
RUSI Members Only
A lecture by Stephen Lovegrove CB, Permanent Secretary, UK Ministry of Defence. In his lecture, Stephen discussed the challenges of managing the Ministry of Defence, in particular making Defence more innovative and protecting the UK in uncertain times.

 

ORAL Transcript

A lot has changed since 1975. Some of it even at the Ministry of Defence but plenty still holds true. In 1975 you invited one of my distinguished predecessors Sir Michael Cary to this very hall to speak to you on exactly the same subject as I am speaking today and he told the audience that day that in a democracy the view of what can be afforded for defence as opposed to other claimants on resources should be in direct proportion to the threat. The current perception is at best somewhat dim. Today, I'd like to talk about the management of the MoD in that context shaping our capabilities in what is inevitably a resource constrained environment, but critically doing so against the contemporary threat rather than those threats that we might have found more familiar even if they were never comfortable. Everyone in defence, everyone in this room, knows how important it is that we get that right. But with claims on resources and attention as insistent today as they have ever been, it is vital that we engage not just our sector but as wide a public as we can reach, and today's event is part -- but only part -- of that. Right now, of course the focus is clearly on the modernising defence programme that we announced in January and that will be the main topic of my remarks today. No doubt you will have many questions about it but I would be surprised if the first one was not: Why are we doing this again? 

In answering that let's go back to the Strategic Defence and Security Review of 2015. You will remember that we identified four areas of challenge the evolution of extreme terrorism, the resurgence of state based threats including an increasingly assertive Russia and the irresponsibly dangerous activities of North Korea. The rapid advance of technology on all fronts and the erosion of the rules based international order. That analysis still stands and the SDSR was recognised as a strong review both here and overseas. But it is unarguable to me that the pace of change in the last three of these has quickened alarmingly. 

Two examples from last week alone President Putin's State of the Nation address was a stark example of a darkening geopolitical picture replete with new and dangerous weaponry. While HMS Sutherland's current deployment is a powerful reminder of the UK's commitment to the principle of freedom of navigation. But a further development is that I think we are also seeing a radical and alarming co-mingling of all of those four elements which we did not see in 2015. There's a cross contamination of risk which greatly magnifies the dangers which any one of them poses on its own. 

Examples we're seeing regional powers developing nuclear capabilities with global reach for avowedly non-regional deterrence. We're seeing the taboo on chemical weapons flouted more regularly than we have become been used to by rogue states today not to mention ongoing efforts by extremists to acquire chemical and biological weapons. We are seeing extremely sophisticated missile technology in the hands of non-state actors being used against national armed forces. We're seeing proxy warfare, which of course has been with us forever, becoming though the new normal and deniability becoming the standard standard modus operandi. We're seeing the possibility of conventional defence platforms being severely compromised by new weapons systems. And finally we're seeing cyber activity which is both difficult to attribute and much less easy to target than you and certainly I would expect state actors to demand. The comparatively indiscriminate damage caused by ‘NotPetya’ is a good recent example. In the words of January's US defense strategy, the views of which we very much endorse in the UK, we now live in a multi polar environment subject to sweeping changes in instability and unpredictability. 

And I hope I am wrong but the long period of successful non-proliferation regimes the globe has enjoyed since the end of the Second World War looks to be in more danger than it ever has been and its impairment is unlikely to be reversible. Most of us in this room are well aware of that strategic landscape but a better and much wider understanding of it and the shifting challenges we face will allow us to make better choices over where we want to and need to invest. 

The national security capability review will give us a clearer up to-the-minute picture of the hazards we face and the vulnerabilities we need to address, which I'm sure will be read with great interest when it's published and it needs to be debated widely. But we don't need to wait that long to see what we have to do in defence. Given the challenges we're facing some but by no means all financial delay is not an option. And globally we're not the only ones to have reached that conclusion. A number of our allies have taken a good look at defence over the last couple of years. I've mentioned the United States already. But you could add France, Poland, Germany, Italy, Germany and Italy. And I'm not long back from India where I listened intently to the descriptions of their new Joint Armed Forces doctrine. These documents all have a couple of things in common. They all committed their countries to new capabilities in a change strategic landscape and they all recognised that regularly updating their strategic reviews is an inescapable consequence of the pace of events. As our French allies said in theirs late last year 'the fast changing international context inevitably imposes timely reviews of our defence strategy'. I agree very strongly with that. Clearly we will need to avoid the danger of chopping and changing in a way that makes long term planning an impossibility. 

But nevertheless it points in two directions I think. Firstly, in the preference for investment in adaptable modular and ideally evergreen platforms, with organisational structures adapted to iterative approaches to capability development and secondly in taking a leaf from other countries books by cultivating a debate about the threat picture which is prior to an informed final choices on force structure and equipment. 

Which brings us to the Modernising Defence Programme (MDP). Looking at its force rounds in a little more detail: the first is the defence operating model, the second efficiency and business modernisation, the third are commercial and industrial approach and the fourth is defence policy outputs and military capability. The first three are essentially designed to reform the way that the department works, interacts with itself and its supplier base and to allow us to maximise benefit on behalf of the taxpayer and the armed forces. All strands must work to eradicate bureaucracy and risk avoidance all must look to boost coherence and speed and be responsive to the demands of the frontline. To take these first three in turn the defence operating model. Since 2010 and Levene, we have been on a journey of delegation, one which I fully support and has brought immense strides in the effectiveness and accountability of the frontline. But the implementation of the Levine model however has not been perfect. While the frontline commanders have developed muscle mass, the centre has lost some. Jointery is overwhelmingly obviously the most important principle by which the services mount operations. But before we ever get to that point there are disjunctions and incongruities between the services that we simply cannot afford. 

The centre, a strong centre, is necessarily the answer to that. As envisaged in Levene, it needs to be strategic, fully knowledgeable and where necessary directive, we need the capability to husband and steward resources in accordance with the strategic picture developed by, working hand in glove with, colleagues across the rest of Whitehall. At the moment the centre in my opinion is not consistent or uncompromising enough to do that and we cannot expect the single services and other top-level budget holders to do our job for us. 

We have bulked up our senior leadership in the centre and it is already paying dividends. A chief operating officer, who can sit on single service boards, building the inter-connective tissue and driving accountability. A chief information officer who can draw together the extremely complex and extremely expensive threads of our networks. Networks which can be both vulnerabilities and battle-winning capabilities. A director general of nuclear, who can holistically oversee the immense national endeavour of renewing our deterrent, both the weapons systems and the platforms as well as its protection. These are all important and necessary steps in improving the cohesion of UK defence and making sure that we place our resources where we need them, and you can expect further reorganisation in the department as the year progresses.

Number two: efficiency is clearly linked to the operating model as indeed both are to number three, our commercial strand. I have been very honest in the past, that the department, like all Whitehall departments faces some extremely challenging efficiency targets - ones that stretch far into the future and demand of us a different way of meeting them. But we have to recognise that the efficiency campsite we inhabit at the moment has become too crowded and too untidy. At least four different efficiency programmes have been adopted by the department in the last eight years and the dangers of double counting and confusion are apparent on a daily basis. We need to urgently untangle those knots and own, right across defence, a consolidated and realistic picture of what we can do. I want that picture to be at the very edge of arduous and exacting. It must be to keep faith with the taxpayer. But I want it to be stable and consistent too. Capable of iterative but not unmanageable adjustment, with governments that is fit to the task. 

Our third strand commercial engagement sees our most important partners playing their part with defence equipment and support. We have much to do here: streamlining first our own processes so that the curse of contract adjustment is eliminated as much as possible and sustaining investment in important supply chains where we know that failure to do so will lose time, money, and the sovereign capability that we need. That is work for defence. But it is an obvious truism but no less true for that, that we need our partners to work with us. We need radical and sustained improvements in productivity in some of our biggest facilities and projects. Improvements that only industry can deliver. 

We must not let monopoly/monopsony habits persist in our relationships. I want to be very clear, in the current climate overruns can only be met with cancellations somewhere else in the programme. Our suppliers need to be as committed and as imaginative to continuous improvement as we will demonstrate ourselves to be. I want a thriving British defence sector as much as they are achieving it requires nothing less. We also want to work more closely with industry in pursuit of increased export success, recognising the challenges of operating in a more complex competitive and ever-changing environment. Exports like conflict need to be a whole of government exercise, a partnership of government and industry. 

Finally strand four: defence policy outputs and military capability. In a sense this is the conventional extension of the work that we did under the national security capability review of last year identifying opportunities for modernising our military capability making defence better able to make a full and sustainable contribution to national security objectives. It is where the most difficult questions, separate from those relating to the reform of the department, must find their answers. 

Where are we placing our big bets? Surely it makes sense to concentrate on areas which play to the UK's strengths -- both traditional, of course-- but emerging ones too, like laser and other directed energy weapons, cyber, both defensive and offensive -- the latter to work as a weapon and as a deterrent -- electronic warfare and simulated training techniques. Some of these choices are not going to be easy. I was going to plagiarise something that Professor Chalmers wrote earlier in the year but I thought it might be more honest just to quote him. 'The more radical, he wrote, the commitment to the rapid fielding of new disruptive technologies, the less useful the traditional measures of military capability become as indicators of national military power. That statement is true and it begs the question I started with: How can we move the public debate towards such a frank and necessary recognition of threats and possibilities?  

I think it would help if we aren't too prescriptive at the start of our discussion. That's why our public debate is built into our programme. A programme, as the Secretary of State has said, is designed to deliver headline findings in time for the NATO summit in July. I want a wide and open consultation and mature conversations with the armed forces, with industry, with international partners, with defence commentators and with the public. Conversations which don't shy away from the central questions of what we as the United Kingdom want from defence. As we embark on a new and different leg of our national journey. And that starts with the disciplined and informed conversation about what we want to defend against.

 Thank you.

 

Speaker Biography

Stephen Lovegrove CB became Permanent Secretary at the UK Ministry of Defence in April 2016. He previously spent three years as the Permanent Secretary at the Department for Energy and Climate Change and nine years at the Shareholder Executive, where he was Chief Executive, and a Director General of BIS, in which role he oversaw the development of strategies and transactions for the full range of State owned businesses, amongst them the Royal Mail, the Ordnance Survey and British Energy, as well as establishing the Green Investment Bank. Before joining the Civil Service, he worked in investment banking, and was a Managing Director in the corporate finance department of Deutsche Bank. Stephen also sat as the Government’s Representative on the Board of the London Organising Committee of the Olympic Games and Paralympic Games. He is a member of the Civil Service Board, the National Security Council (Officials) and chairs the Civil Service Leadership and Learning Board.  He is a Non-Executive Director of Grosvenor Estates. He was appointed Companion of the Order of the Bath (CB) in the 2013 New Year Honours List.

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