MoD risks an internal cold war by going outside to hire big-hitters

Parliamentary business

The Ministry of Defence on October 13, 2010 in London, England. Government departments are braced for budget cuts when Chancellor of the Exchequer George Osborne delivers the Comprehensive Spending Review on October 20, 2010. (Peter Macdiarmid/Getty Images)

The Ministry of Defence spent £583,000 on headhunters to recruit senior civil servants last year – enough to buy nearly 6,000 pairs of boots for British soldiers. That’s up from £121,000 in 2010, when the Conservative-led Coalition came to power.

In absolute terms – the MoD’s budget is £33bn – this outlay is a drop in the ocean. MoD sources are also rather keen to point out that these headhunters’ fees amount to less than 0.001 per cent of the defence budget over five calendar years.

In that sense, the expenditure is hardly a scandal, merely representative of ministers’ wider ambitions to attract highly skilled managers from the private sector to help the MoD get a tighter rein on its notoriously budget-busting capital programmes. Nevertheless, it all seems a bit pricey given that more than £1.5m was spent filling just 40 senior posts over five years, which works out at nearly £38,000 per search. Moreover, senior civil servants, who have spent years negotiating the intricacies and vagaries of Whitehall to reach their elevated positions, worry that younger generations of public sector talent are being snubbed. They reckon the theory that private sector training trumps a civil service background is a false panacea.

Take Dave Penman, general-secretary of the FDA union, which represents 18,000 of the UK’s most senior civil servants. He is not against snaffling experts from industry, but says the spending on headhunters “raises a question over whether the MoD is spending too much time and money looking to recruit from outside, when there is plenty of talent inside the MoD”.

Labour’s Louise Haigh, the 28-year-old MP (I know, I know – and she’s still eight years older than the SNP’s “Baby of the House”, Mhairi Black) for Sheffield Heeley, dug up these figures from a ministerial answer to her parliamentary question this month. She warned that, at the current rate of increased reliance on headhunters, they could soon be earning more than £1m a year from the MoD. “Given that this [increase] is at the same time as the Government is targeting front-line public sector workers for mass lay-offs and pay cuts, you really have to question their [the MoD’s] priorities,” added Ms Haigh.

It should be added that the idea of bringing in a few highly paid managers, while axing those who have spent their lives dedicated to the public sector, would smack of disloyalty to those who remain. If their career prospects are hampered by outsiders, they might well surmise that it is time to move elsewhere.

There is a difficult balance to strike here, because the MoD has started to get a handle on some of its expenditure overruns, and that is partly down to its change of recruitment priorities. As a spokeswoman said: “It is vital that we attract the very best candidates for senior roles which involve huge responsibility, often managing multimillion-pound budgets. That is why we occasionally use headhunters to encourage outstanding candidates in the private sector – who might not otherwise consider joining the civil service – to apply to the MoD.”

Next week, the Government publishes the Strategic Defence and Security Review (SDSR), which will lay out the shape and expenditure priorities of the armed forces for the next five years. The last review in 2010 resulted in thousands of redundancies; this time, with Britain committed to meeting Nato’s target of spending 2 per cent of national income on defence, there should be fewer nasty cuts.

But what we should look out for over the coming years is a shift in the MoD’s structure, with tiers of top management taken over by career industrialists rather than those with experience of mastering civil service bureaucracy.

Let’s hope that the MoD is not wasting nearly £38,000 a time on poaching from the private sector when the best staff might be already working in the department, seething at the blocked career opportunities.

Britain has the skills to go green. Does it have the will?

Next week is acronym week in Parliament: as well as the SDSR, we have the CSR (Comprehensive Spending Review), which will lay out cuts of up to 40 per cent across Whitehall as part of the Government’s charge to balance the nation’s books by 2020. One of the first departments to reach agreement with the Treasury was Energy and Climate Change. Among its cuts are 200 jobs, representing one in eight staff.

The timing could hardly be worse considering the UN climate-change talks in Paris start at the end of this month. These are considered the most important environmental discussions in years, but Britain will struggle to play a leading role after first cutting subsidies for renewable energy schemes and now taking an axe to the civil servants needed to develop policy.

Our engineers are among the most skilled in the world and could be expected to be at the forefront of the new technology needed to fight climate change. Without subsidies and a well-resourced Department of Energy, though, Britain’s green industry will not develop at the pace needed to make sure their talents are utilised to the full.