''We're sharpening our grip on the equipment programme''

24 June 2011

Ministry of Defence Permanent Under Secretary Ursula Brennan tells Defencemanagement.com editor Joel Shenton about the complex job of balancing extensive reforms, two concurrent military operations and working with one of the ministry's greatest critics, Bernard Gray

Permanent Under Secretary Ursula Brennan works from a spacious enclosure on an open-plan floor of main building in Whitehall. It's considerably more modern than you might expect – the anticipated giant mahogany bookcase and creaking leather armchair are absent – and aside from the occasional uniformed officer passing by, it could be the top office in any government department.

Brennan's extensive civil service experience led to her joining the MoD as 2nd Permanent Under Secretary in October 2008 before taking on the top job in November last year. Despite all the upheaval since last October's defence review, she immediately plays down the suggestion that hers is a 'nightmare job'. There is no denying, however, that it is an enormous one.

The upheaval came after years of bad publicity for the MoD, publicity which Brennan says is set to change as a result of the current reforms. She is also positive that there is much about the ministry today that is genuinely world class. Operations in Libya provide an example of its ability to respond quickly and with force when needed, she says.

"The MoD really jumped to it in terms of planning very, very rapidly what support might be needed, offered ministers all sorts of advice and assistance and then when ministers decided what sort of route they wanted to go down in the first - in terms of evacuating people and then in terms of the work that went on with NATO around the campaign - put those arrangements in place," she says.

"That's not just the armed forces personnel who are engaged in for instance the air campaign or the naval campaign initially in Libya, but all the people; The people who worked in NATO to secure support from NATO allies, the people who did the planning, the people who advise on what you need to do to exercise lethal force. That sense that there are professionals here who, faced with a problem, spring to it and know what to do is, I think, one of the things that is really world class about the ministry."

Britain was already involved in a complex long-term operation in Afghanistan when Operation Ellamy began in March, and the MoD is also working through a package of cuts that will see it shed 42,000 armed forces and civilian personnel in the next four years. Few would argue that it was not ripe for fundamental change, but the pace and scale of change is huge, even for experienced reformers like Brennan, and the challenge is made tougher by the ministry's "large, complex and uncertain" nature.

"As the military keep reminding me, the enemy has a vote," says Brennan. "In other places you can set out a plan and you might be derailed by money or you might be derailed by politics. We have to bear in mind that we set out a plan and something will happen in the world and we have to react to that. So all of those things make it more complicated."

And many Ministry plans have gone awry. Defence Secretary Liam Fox said the department could have faced unfunded liabilities of around £38bn if action had not been taken to rein in spending. Overspends in the billions are not commonplace, but the size and complexity of some of the major defence equipment projects has meant that when they do happen the numbers involved are truly spectacular and, rightly, live on in headlines for years. It is something that the current reforms are designed to fix, but it raises the question of whether the ministry is at risk of being overwhelmed by it all.

"There's an argument that says you've got two high-profile campaigns in Afghanistan and Libya and therefore you shouldn't be trying to change yourself at the same time - and then you've got the SDSR which is actually changing the shape of your forces," says Brennan.

"But actually, if you've got a really challenging set of things to do it just spurs you to say if you've got processes which are over-complex and accountabilities which are not clear you are not going to deliver those ends," she says. "So I know it's difficult - and there are just times when you pause and think 'gosh, wouldn't it be nice to just have a bit more stability' - but actually if you've got something really difficult to do, that's when you need to say 'I need a really streamlined organisation to deliver that'."

One of the phases of the current reforms involves a fundamental restructuring of the internal workings of the ministry based on recommendations made by Lord Levene's Defence Reform Unit. The unit has already created the Defence Infrastructure Organisation, which replaced Defence Estates, and its final report is slated to arrive at the end of July.

The ministry is also bringing half of the British troops stationed in Germany back to the UK by 2015, pending the outcome of a basing review in July. Liam Fox has said the decisions on basing and Germany are more complex than a 3D jigsaw, and Brennan acknowledges that the Germany move alone is "enormous".

The standard bearer for reform, however, is Bernard Gray, whose 2009 report into procurement at the Ministry of Defence 'thoroughly pulled up the carpet', according to then-procurement minister Lord Drayson. Parties of all colours vowed to fix the procurement process which had seen overspends run into the billions of pounds and projects delayed by years at a time. Gray has since been appointed Chief of Defence Materiel, instituting some senior management changes at Defence Equipment and Support and taking his place on the new Major Projects Review Board. Despite joining the ministry, his criticism of past procurements remains trenchant and there is something quite reassuring about Brennan's assertion that he has not changed since joining the MoD.

"He hasn't suddenly turned into a civil servant," she says. "He doesn't talk civil service language suddenly.

"Is he being given all he needs? Well, part, of course, of Bernard's point was we need to be running stuff in a different kind of way and he has already reshaped his organisation and restructured it so that the way he has organised the groupings around him is different.

"He's working his way through, therefore, saying 'how do I want this organisation structured, what sort of skills and things do I need there?' He's not yet said anything to me at any rate - or I think to the secretary of state - along the lines of 'I can't get on with this without your help'."

Many of the problems identified in Gray's 2009 report were a result of process, the way business is done within the ministry, and that's where Gray is finding the most friction, Brennan says.

"He kicks at civil service process," she says. "All new people who come into the civil service say 'do I really have to go through these processes' and it's of course a good thing [that he's doing so].

"Sometimes you have to say to him 'that's something that's laid down by the Treasury or the Cabinet Office and we can fight it but we don't have the freedom to go beyond it. Sometimes they're things we've imposed on ourselves in which case if he says or anyone else says 'I'm being impeded by this thing' then its up to us to say let's remove that impediment."

By 2015, when many reforms will have taken effect, Brennan says the National Audit Office reports will have to recognise some "really impressive" improvements to MoD performance on the time and cost overruns that have blighted its major projects.

"One of the things I think that we can be saying is that, and Bernard Gray made this point, is that if you look at our forward equipment programme a chunk of the cost in there, the cost that we could get rid of, is cost of delay. Delay because we didn't manage things tightly enough but also delay because we consciously deferred things.

"Getting to a position where we are not delaying things deliberately really will make a difference to the cost and to the size and the numbers of people you need in order to do the business, so yes I do look forward to that. We don't have to wait till 2015 to be in a position where we've actually got a much sharper grip on the equipment programme. We're doing that literally day by day at the moment, getting to a much better informed understanding of what's the cost of what we have on our books and what we want to do."

While the post-2015 budgets remain unconfirmed, Brennan's focus is the day to day business of running a ministry undergoing restructuring, shedding staff and planning for the future. She denies that the tasks she faces amount to a "nightmare job", instead characterising this period as a chance to put things right.

"There is an opportunity to say 'what are the things that we don't like? Now is the chance to do them differently'," says Brennan. "And one of the things I'm trying to do is to keep remembering for myself and to keep reminding my colleagues to say 'if we don't do it now it's quite difficult to come back to some of these things later'. So this is a chance to say we can just do this differently, we don't have to do it the way we do it now.

"What I'm particularly looking forward to is that there's an awful lot about things like the SDSR where what you're talking about is what you haven't got or what you've cut," she says. "What I'm looking forward to is settling that kind of endless debate and saying now we're talking about what we are doing. And that's as true in terms of the organisation as it is in terms of anything else."