09/02/2012 07:50 GMT

Defence Cuts Risk Armed Forces Losing Vital Skills, Says National Audit Office

The armed forces risk losing vital skills because of the speed of the government's defence cuts, the Whitehall spending watchdog warned today.

The National Audit Office said the Ministry of Defence was being forced to push through reductions to military and civilian personnel before it had drawn up detailed plans as to how it would operate in future.

It warned the MoD faced "profound changes" if it was to continue meeting its commitments with fewer people.

The MoD is in the process of cutting 25,000 armed forces personnel and 29,000 civilian staff by 2015 in the biggest round of cuts to the military since the end of the Cold War.

The reductions, set out in the Government's Strategic Defence and Security Review, are intended to reduce costs by £4.1 billion as part of the drive to plug a £38 billion "black hole" in the defence budget.

The NAO said it had "little choice other than to make cost cuts early" if the projected savings were not to be eroded by the need to carry on paying wages and the spending review targets were to be met.

As a result, however, the MoD had had to begin reducing numbers before the full details of its new operating model had been determined.

"The MoD will need to make profound changes to how it works in order to continue with its current level of activity with fewer staff," the NAO said.

"But the NAO has not, so far, seen enough detail to determine whether the department is making sufficiently substantial changes to how it works.

"Without real changes to ways of working, cutting headcount is likely to result in the department's doing less with fewer people or, alternatively, trying to do the same with greater risk."

The head of the NAO, Amyas Morse, said the MoD needed to adopt a "more targeted approach" to implementing the cuts.

"The Ministry of Defence is in the difficult position of needing to maximise financial savings by cutting headcount before it has detailed plans for how it will operate in the future," he said.

"The department has acted decisively, but runs the risk that it will lose skills that it needs, worsening the current skills shortage."

Shadow defence secretary Jim Murphy warned the drive for redundancies was "rushed and wrongheaded".

"Real savings have to be made, including from personnel reductions in the military and civilian workforce, but they must fit within a clear plan of how the MoD will do more with less at home and overseas," he said.

"The rush to show personnel the door has led to higher costs which could lead to further cuts, while important skills are being lost."

Defence Secretary Philip Hammond said the NAO had found the redundancy programme was working well and that compulsory redundancies would only be used as "a last resort".

"Of course, the scale of the financial black hole in MoD's budget that the coalition has inherited meant action was needed urgently. We recognise the risks the NAO identifies and are actively managing them," he said.

"MoD civilians contribute to every aspect of defence in the UK, internationally and in theatre and these necessary changes will be achieved mostly through reductions in recruiting and by not replacing those who leave."