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UK MODStrategic Defence & Security Review

Analysis Support

• Introduction– SDSR Background

• Analysis through the SDSR– Supporting decision-makers

• …and since• Some Observations

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National Security Strategy

Strategic Defence and Security Review (SDSR)

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• Strategic Context• Britain’s Distinctive Role• National Security Risk Assessment• National Security Tasks & Planning Guidelines

• Adaptable Britain– 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

National Security Strategy

UNCLASSIFIED

But it’s the economy, stupid.......

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1970/71 1975/76 1980/81 1985/86 1990/91 1995/96 2000/01 2005/06

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2009/10

% of Defence spend as proportion of GDP

Expenditure £Bn on Defence £34Bn

average

Falklands conflict

Iraq conflict

• UK Personnel Costs– Average 1.7% above inflation per annum

• UK Equipment & Support costs– 3-5% above inflation per annum

The spend, in real terms has remained constant.

Defence costs in excess of inflation erode buying power

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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

Outcomes - SDSR Themes

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Defence Head Office structure

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May

SDSR

Synthesis (DSG and NSC)

Policy Choices

Capability Choices

18-20 Oct 2010

Work strands

Ideas

June July August Sept Oct

Defence Reform ReviewDefence Acquisition Reform Programme

Nov Dec Jan Sep2011

National Security Strategy

Spending Review

Defence Industry & Technology PolicyGreen Paper

White Paper

PR11 Detail

Apr2011

SDSR Headlines

Implementation

CSR

Overview of analytical support to SDSR

Technical advice and alignment with Dstl and S&T strategies

Advice and analysis to

support 18 of 41 work strands

Synthesising work strand

ideas.

Force structure risk

assessment

NSS

Advice on cyber & horizon

scanningHighlight, and help mitigate, risks of PR11

options

Learn lessons to improve support to

future SDSRs

Workshops with S&T

stakeholders to shape strategy

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• 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%

Cost Analysis aided the understanding of the scale of the financial savings

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%

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Policy ChoicesPrioritise Capabilities and shape the force structure to achieve affordability

Homeland Influence Intervention Stabilisation

Matching Resource to Aspiration

Increasing Levels ofAmbition

Developing the Defence Response

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Force Structure Cost - Projected defence budget in 2020

Steady State 2 Annual CompoundedEquipment Procurement (Aerospace) 0.0% 0%

#Equipment Procurement (Other) 0.0% 0%

COO1 1 1

Equipment (Running Cost) 0.0% 0%

COO2 1 1 Personnel 0.0% 0%

Other 0.0% 0%

COO3 1 1

Annual CompoundedOverhead Deflator 0.0% 0% 100

Top Herrick

3rd Standing Commitments 1

Harmony 2 TRUE 2nd COO 3

DPA data is available. 31 Base Overheads 1

Force Structure Cost Visualisation ToolUNCLASSIFIED

Overheads

Standing Commitments

Defence Planning Assumptions (DPAs) Cost Pressures

Strategy Management

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1 in x 1 in y

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Reset all DPAs

High Level SummaryR

Overheads

COO

Standing Commitments

Medium Scale

Analysis Tools aided the understanding of the relationship between Planning Assumptions, Costs and Force Structure

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•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

Set at 2 interventions after analysis showed

that 3 were unaffordable and unlikely historically

Analysis helped inform the development of Defence Planning Assumptions

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Analysis Supported the development of Future Force 2020

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• 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

Analysis Supported the development of Future Force 2020

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Output Evolution

• Increasing number of levels of information– From Whole Force Structure, Capability Packages / Areas, down to Force Elements

• Increasing range of tailored communication methods– Including; handouts, interactive briefings, supported desk level discussions, memos

• Increasing amount of interaction – From set handout or brief to interactive briefs holding a depth of information as required

• Increasing combinations of outputs– Optimisation and risk picture, joint outputs with other specific studies (e.g. Joint Fires)

Impact of possible Policy

Choices

Changes to Policy

Capability Audit Risks

Impact of PR11 Measures

Risk in FF20

Understanding new Policy by Capability Area

Impact of PR11 SDSR Measures

Dynamic Demonstrator

Cost Effectiveness of Force Elements

By area with specific investigations

Post SDSR Post SDSR with PR11 Measures

Epoch 1 Epoch 2 Epoch 1 Epoch 2

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Capability Packages

Risks in for a given Force Structure against a given Policy

Investigation into specific areas for IAB submissions, e.g. JCA, SCAVENGER, AH

Shortfalls & Affluences in Force

Structure

Optimised Force Structures

2010 2015 2020RISK 1RISK 2RISK 3

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Whew!

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But....the world moves on...• Funny old thing...

– 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”

– Equipment Affordability– Reserves Review– Basing study– Implications of ‘Arab Spring’

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• 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

Analysis in support of the 3 Month Exercise

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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?