Liam Fox’s successor as defence secretary is great at crunching the numbers. But can he keep the generals behind him?
Philip Hammond lacks the boyish enthusiasm for defence possessed by his predecessor, Liam Fox, but he does have something more unusual for holders of his office: an accountant’s attention to detail.
Hammond is also a control freak, colleagues say, whose brain has proved big enough (so far) to absorb the myriad complexities of the Ministry of Defence budget.
Both characteristics have helped him bring discipline to military finance, as has the introduction of his “magic whiteboard”.
The board may be Hammond’s most significant legacy at the MoD – though the absence of something so prosaic may explain why the military budget has been so abused in the past.
The heads of the three services sit on their own military committee to discuss procurement issues. Hammond told them to write down on a whiteboard the 10 most important things they needed, in order of importance.
The army, navy and air force have at times been less than sympathetic to each other’s equipment requirements, so thrashing out the details behind closed doors is important.
Drawing up the list has also made the services “own up” to projects in their programmes that they haven’t found money for.
Once the ranking has been agreed, the chief of the defence staff, General Sir David Richards, and his deputy, General Sir Nicholas Houghton, present the findings to the main defence board.
Hammond chairs the 10-strong team, whose members include the MoD’s chief bean-counters, Ursula Brennan, the permanent under-secretary, and Bernard Gray, chief of defence materiel.
“When the ministry has enough money, the board plucks something down from the whiteboard and, hey presto, it is bought,” said a defence source. “Nothing comes off the whiteboard until then.
“The system is working remarkably well, which makes one wonder why the MoD never did anything like it before.”
That has been a question the defence select committee and the National Audit Office have been asking for years as they have watched the MoD dig itself into ever bigger holes, with successive governments tolerating mismanagement because of the unique commitments the military make on the country’s behalf.
The recession put an end to that. And treating the service chiefs like schoolchildren in a remedial maths class is the least of the indignities the MoD has suffered over the last two years.
The cost of Hammond’s declaration has been 60,000 civilian and military posts, in a redundancy programme that began under Fox and will continue for the army until 2018. And the loss of equipment including the aircraft carrier Ark Royal, four frigates and the Harrier jump jet fleet has left the armed forces weaker, and a little mortified.
Though the services retain huge public support, backing for them is weaker at Westminster. With his “You do the fighting; I’ll do the talking” comment, David Cameron slapped down the first sea lord, Sir Mark Stanhope, for making the mild observation that the navy would be unable to conduct operations in Libya indefinitely and do everything else it was committed to without something having to give. The remark was a warning to the other service chiefs to stay in line, and they have. But that may not last.
Though Hammond will take the plaudits, almost all of the difficult reforms, and the Whitehall bloodletting, took place under Fox. The military believed Fox was on its side, and that he would battle to ensure the MoD retained some special status among the other big departments. The generals, admirals and air marshals are less sure about Hammond, the quiet bookkeeper.
If he is to keep the MoD on track, and the services behind him, he will need their help and support. Retaining it may yet prove more difficult than the number-crunching he is so good at.