Thursday, March 25, 2010

Budget confirms MOD to make £700m of efficiency savings

Budget confirms MOD to make £700m of efficiency savings
March 25, 2010

Yesterday's Budget has confirmed the 2009 Pre-Budget Report commitment that the MOD would identify £700m of efficiency savings.

The 2009 Pre-Budget Report commitment to further real-term increases in the Defence Budget in 2010/11 was also confirmed in the 2010 Budget announced by the Treasury.

The savings form part of the Operational Efficiency Programme (OEP) and 'Putting the Front Line First: Smarter Government'.

The MOD is fully committed to the recommendations of the OEP and to the rest of the package of Smarter Government efficiencies.

Current plans to deliver the £700m of efficiency savings include:

• £550m to be saved across the Department, including up to £120m from greater use of collaborative procurement on construction, food and IT as well as better management of the Defence Estate, savings through greater efficiency in equipment support, and further prioritisation in the Strategic Defence Review.

• £130m of savings within the MOD through replacement of legacy IT systems.

• £30m to be saved by further reducing the use of external consultants and expenditure on marketing and communications, including significantly reducing the number of MOD publications. The MOD has already cut consultancy spending by 75 per cent since 2002.

• The results of an independent review of Defence civil servant numbers, led by Gerry Grimstone, which is looking at the distribution of tasks between military and civilian personnel and the scope for further efficiencies. This is on top of the 40,000 reductions since 1997. Savings may be significant. Findings from the report are expected in May 2010.

The MOD is committed to delivering the significant savings necessary and is making real progress through ambitious efficiency savings and value for money plans.

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