Transcript the presentation

UK MOD
Strategic Defence & Security Review
Analysis Support
• Introduction
– SDSR Background
• Analysis through the SDSR
– Supporting decision-makers
• …and since
• Some Observations
UNCLASSIFIED
National Security Strategy
Strategic Defence and Security
Review (SDSR)
UNCLASSIFIED
National Security Strategy
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Strategic Context
Britain’s Distinctive Role
National Security Risk Assessment
National Security Tasks & Planning Guidelines
• Adaptable Britain
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Respond to highest priority risks
Respond to low probability but very high impact risks
Focus on upstream activity
Retain a broad spectrum of security and defence capabilities
Strengthen relationships with key allies
Coordinate and integrate whole of Government response
UNCLASSIFIED
But it’s the economy, stupid.......
£45
6%
Expenditure £Bn on
Defence
£40
£34Bn
average
5%
£35
Defence costs in excess of
inflation erode buying power
4%
£25
3%
£20
Falklands
conflict
% of Defence spend as
proportion of GDP
£15
2%
£10
1%
£5
Iraq
conflict
£0
1970/71
1975/76
1980/81
1985/86
1990/91
1995/96
2000/01
Years
• UK Personnel Costs
– Average 1.7% above inflation per annum
• UK Equipment & Support costs
– 3-5% above inflation per annum
UNCLASSIFIED
2005/06
0%
2009/10
% GDP
The spend, in real terms has
remained constant.
£ Billions
£30
Outcomes - SDSR Themes
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Uncertainty: adaptability; readiness
Future Conflict: intelligence; precision; mobility
Independence: UK; Overseas Territories
Multilateralism: risk management
Combat Focused: reductions in non-front line areas
Affordability
UNCLASSIFIED
Defence Head Office structure
UNCLASSIFIED
18-20 Oct 2010
Overview of analytical support to SDSR
CSR
Spending Review
Advice on cyber
& horizon
scanning
NSS
National Security Strategy
Work strands
Implementation
Learn lessons to
improve support
to future SDSRs
Synthesis (DSG and NSC)
Ideas
Advice and
analysis to
support 18 of
41 work
Maystrands June
Policy
Choices
Synthesising
work strand
ideas.
Force structure
risk
assessment
July
August
Capability
Choices
SDSR
Highlight, and
help mitigate,
risks of PR11
options
SDSR
Headlines
Workshops with
S&T stakeholders
to shape strategy
PR11
Detail
Defence Industry & Technology Policy
Green
Paper
White
Paper
Defence Reform Review
Defence Acquisition Reform Programme
Sept
Oct
Nov
Dec
Jan
Technical advice and alignment with
Dstl and S&T strategies
UNCLASSIFIED
Apr
2011
Sep
2011
Cost Analysis aided the understanding
of the scale of the financial savings
• Negotiations with Treasury reduced savings target from 10-20% to 7.5%
– Cost analysis helped explain to VCDS, Strategy and Finance staff why MoD’s plans
needed to reduce by 25-40% to achieve savings of 10-20%
UNCLASSIFIED
Cost Analysis aided the understanding
of the scale of the financial savings
• Negotiations with Treasury reduced savings target from 10-20% to 7.5%
– Cost analysis helped explain to VCDS, Strategy and Finance staff why MoD’s plans
needed to reduce by 25-40% to achieve savings of 10-20%
UNCLASSIFIED
Developing the Defence Response
Matching Resource to Aspiration
Increasing
Levels of
Ambition
Homeland
Influence
Intervention
Stabilisation
Policy Choices
Prioritise Capabilities and shape the force structure to achieve affordability
UNCLASSIFIED
Analysis Tools aided the understanding of the
relationship between Planning Assumptions, Costs and
Force Structure
UNCLASSIFIED
Force Structure Cost - Projected defence budget in 2020
Force Structure Cost Visualisation Tool
Defence Planning Assumptions (DPAs)
Cost Pressures
80
Reset all DPAs
Annual Compounded
Standing Commitments Steady State 2
Equipment Procurement
(Aerospace)
R
0.0%
0%
60
#
Equipment Procurement
(Other)
COO1
1
None
Small Scale
0.0%
0%
1
R
Non-Enduring
Equipment (Running Cost)
Enduring
Medium Scale
0.0%
Cost
R
40
0%
R
COO2
1
1
None
Non-Enduring
Small Scale
Enduring
Personnel
0.0%
0%
20
R
Other
Medium Scale
0.0%
0%
R
COO3
1
None
Small Scale
Medium Scale
1
0
now
Overheads
0
0
0
0
future
Non-Enduring
Enduring
Overhead Deflator
Annual Compounded
0.0%
0%
100
R
Graph
Update Graph
Harmony
2
1 in x
1 in y
TRUE
DPA data is available.
Overheads
COO
Standing Commitments
Flat Real
Flat Cash
-14%
Graph Legend Order
Auto-update
Available?
Top
Herrick
R
3rd
Standing Commitments
Standing
Commitments
1
2nd
COO
COO
3
Overheads
Overheads
1
Base
UNCLASSIFIED
31
Tables
High Level Summary
Strategy Management
Analysis helped inform the development
of Defence Planning Assumptions
• The Armed Forces in the future will be sized and
shaped to conduct Standing Commitments plus:
– an enduring stabilisation operation
– one non-enduring complex intervention
– one non-enduring simple intervention
Chosen by National Security
Council from 3 affordable
postures developed using Dstl
FaST tool
UNCLASSIFIED
Set at 2 interventions
after analysis showed
that 3 were unaffordable
and unlikely historically
Analysis Supported the development of
Future Force 2020
UNCLASSIFIED
Analysis Supported the development of
Future Force 2020
• Developed initially by DG Strategy, drawing upon Dstl analysis
– Scenario-based analysis generated insights into force requirements
– Force structure analysis highlighted differences between ‘ideal’ DPA force
structure and 2015 post-Afghanistan force
– Synthesis of workstrand paper ideas
• Identified 5 key questions that drive the shape of the force
• Generated three coherent force structures for 10% and 20% savings
levels
• Highlighted constraints and dependencies between policy aspirations
and capability
• Tested forces emerging from Senior Decision Maker discussions
– Informed VCDS Senior Judgement Panel debates on the value of major
force elements
• Capability analysis informed the understanding of risk within and
across the Defence Planning Assumptions
UNCLASSIFIED
Output Evolution
Understanding new
Policy by Capability
Area
Dynamic
Demonstrator
By area with specific
investigations
Optimised Force
Structures
Changes to
Policy
Shortfalls &
Affluences in Force
Structure
2010
Cost Effectiveness
of Force Elements
Impact of PR11
Measures
Impact of
possible Policy
Choices
Capability Audit Risks
2015
Post SDSR
Capability
Packages
2020
RISK 1
RISK 2
RISK 3
Impact of PR11
SDSR Measures
Epoch 1
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
Risk in FF20
Risks in for a given Force Structure against a given Policy
Investigation into specific areas for IAB submissions, e.g. JCA, SCAVENGER, AH
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Increasing number of levels of information
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Increasing range of tailored communication methods
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Including; handouts, interactive briefings, supported desk level discussions, memos
Increasing amount of interaction
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From Whole Force Structure, Capability Packages / Areas, down to Force Elements
From set handout or brief to interactive briefs holding a depth of information as required
Increasing combinations of outputs
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Optimisation and risk picture, joint outputs with other specific studies (e.g. Joint Fires)
UNCLASSIFIED
Post SDSR with PR11 Measures
Epoch 2
Epoch 1
Epoch 2
Whew!
UNCLASSIFIED
But....the world moves on...
• Funny old thing...
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Some residual variance on the programme
Reality of reaping all of the predicted savings
Overall size and shape of the Army post Afg
New CDM (Bernard Grey) cost realism
FOREX/Fuel
The “3 Month Exercise”
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Equipment Affordability
Reserves Review
Basing study
Implications of ‘Arab Spring’
UNCLASSIFIED
Analysis in support of the 3 Month Exercise
• MoD needed to better understand
the requirement to re-balance the
books
– Responsive Cost Analysis
• Further Senior Judgement Panels
recommended areas where
reductions could and couldn't be
taken
– Dstl provided 8 perspectives on Force
Structure & Capability
– Costs, risks against Defence Planning
Assumptions, and implications in terms of
historic operations context
• SofS announcement 18th July 2011
UNCLASSIFIED
Some Analysis Observations...
• The challenge of ‘real decision-support’ vs ‘doing studies’
– The use of analysis is not a given
– Has to prove itself useful and credible
– Timely and accessible
• Value of ‘deployed analysts’
• Foundation of the evidence base and tools
– Force Structure Cost Model
– Force Structure analysis tools
– Strategic Balance of Investment & capability analysis
• Value of visualisation techniques & responsive tools
• Flexibility, responsiveness and determination
UNCLASSIFIED
Questions?
UNCLASSIFIED