MPs fear cost of Ministry job cuts

In a critical report, the Public Accounts Committee said plans to reduce the civilian workforce by 29,000 and military personnel by 25,000 were being pushed through without a proper understanding of what skills would be required in the future.

While the move will save £4.1bn by 2015 it could also fuel spending on outside consultants, which has already soared from £6m to £270m in four years, the MPs said.

They were encouraged by the MoD’s attempts to tackle poor staff morale, which it had acknowledged was “not in a good place” as a result of the changes.

Margaret Hodge, who chairs the committee, said the Ministry went ahead with cuts without a proper understanding of what skills it would need in the future.

“We recognise that the MoD must make tough financial decisions if it is to reduce its spending by 7.5 per cent a year by 2015, and that it has acted decisively.

“But we are concerned that these cuts have been determined by the need to cut costs in the short term rather than by considering the MoD’s strategic objectives in the long term and the skills it will need to deliver them successfully.

“If the department loses key skills, it may have to spend even more money on replacing them, perhaps by buying them in from external consultants. Spending on consultants is already soaring, from £6m in 2006-07 to £270m in 2010-11. This would not represent value for money.

“We welcome the department’s candour about how these cuts are affecting staff morale. That morale is low when jobs are threatened is unsurprising, but it is encouraging to see the department take active steps to improve the way it communicates with its staff on the need for change.”

The MoD was ordered to cut annual spending by 7.5 per cent by 2015 as part of the Government’s deficit reduction plans.