Source · Select Committees · Public Accounts Committee
Recommendation 3
3
Accepted
Report progress on MoD's Support transformation programmes, skills provision, and industry engagement
Conclusion
The MoD’s transformation plans are complex and ambitious, but its track record means we are sceptical about its ability to achieve them. The MoD has put in place the £2.5 billion Business Modernisation for Support (BMfS) programme to upgrade its legacy IT infrastructure and introduce aligned business processes across its bodies. This programme is intended to resolve many of the historic issues the MoD has faced in managing its inventory, however it is highly complex: transforming services for around 65,000 users across Defence whilst maintaining operations throughout. The MoD’s track record in delivering business and digital transformation is patchy, and the Committee is concerned about the level of skills and personnel available to MoD to manage these programmes. The MoD faces staffing gaps of around 25% across both BMfS and its Future Defence Support Services (FDSS) programme, which aims to find the best commercial arrangements for inventory management from 2028. While the MoD told us it has brought in digital skills for BMfS, it acknowledged that the staffing gaps create risks for FDSS, though it is confident it can still meet the 2028 target delivery date through sensible prioritisation. Recommendation: In its Treasury Minute response, the MoD should write to us setting out progress on its Support transformation programmes, how it is ensuring it has the right skills and experience to deliver them, and how it will engage with industry in doing so.
Government Response Summary
The government agrees and provides detailed progress updates for its Support transformation programmes, including BMfS (first deliverable autumn 2024) and FDSS (key investment decision by year-end). It also details ongoing process improvements for medical materiel and strategic engagement with DHSC.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Major Programmes) portfolio: • Business Modernisation for Support (BMfS). This programme is in transition from design to delivery with the first major deliverable on track for autumn 2024, when all three Services move onto the same base inventory system for the first time, and two 40-year-old legacy systems are retired. Further progress is dependent on the department approval to grow the team to deliver the desired outcomes. • Future Defence Support Services (FDSS). This programme is working towards a key investment decision milestone at the end of the year. Progress is dependent on the department’s approval to grow the team to deliver the desired outcomes and which, if not forthcoming, will trigger an extension of the current Logistic Commodities and Service Transformation (LCST) contract. • Sustainable Road Transport. This programme is proceeding towards the final investment decision point in late 2025. Progress is dependent on resourcing the team past its current end date of March 2025. • Fuels Transformation Programme. This programme is in the delivery stage and due to close, as planned, by April 2025, when initiatives will transfer to single Service business- as-usual activity. All programmes have an agreed commercial strategy that ensures appropriate industry engagement. Good use is also made of industry advisory bodies and industrial placements. million uplift in staff employed inside the Delivery Partner (Team Leidos) together with additional staff established into key areas of UK Strategic Command. 5.3 The primary aim has been to segment medical activity from the broader scope of LCST and strengthen customer-supplier integration across the range of forecast, planning and operational activity. This additional investment has been coupled with analysis and planning that has led to improved requirement definition of medical equipment, alternate routes to market and key changes to the end-to-end supply chain policy & process. This has resulted in a sustained period of above contractual target (92%) Medical availability performance since September 2023. Process improvements are in place to ensure that short shelf-life medical materiel can meet the challenge presented by long duration maritime deployments. Similar process improvement, ensuring speed of procurement, has already been made to aero- medical equipment. Next steps include strategic engagement with the Department of Health and Social Care to elicit access to medical stockpiles and the introduction of smarter ways in which contingent medical operational stock might be maintained at readiness to support Defence activities. The Future Defence Support Services programme (which replaces LCST in 2028) is already well advanced in understanding the specific needs of Defence Medical, and particularly medical devices. Equipped with greater contractual leverage and alongside a Defence customer who has learned, it will substantially redress the challenges encountered by LCST. 5.4 The Permanent Secretary has written separately on this issue as part of follow up to queries raised in the Committee hearing.