Annex A: Organisation and Management of Defence

Secretary of State and Ministers

1. The Secretary of State for Defence is responsible for the formulation and conduct of defence policy. As at 31 March 2003, the Secretary of State was supported by a Minister of State for the Armed Forces, and two Parliamentary Under-Secretaries of State (one for Defence Procurement and one for Veterans).

The MOD Head Office

2. Beneath Ministers lies the top management of the MOD, comprising ten senior officials and Service officers (as shown in Figure 6 below). The Secretary of State has two principal advisers: the Permanent Secretary (PUS), and the Chief of the Defence Staff (CDS). They share responsibility for much of the Department's business, reflecting the input that both military and civilian personnel make to political, financial, administrative and operational matters. The PUS has primary responsibility for policy, finance and administration in the Department. He is the MOD's Principal Accounting Officer and is personally accountable to Parliament for the expenditure of all public money voted for Defence purposes. CDS is the professional head of the Armed Forces and the principal military adviser to the Secretary of State and the Government.

3. PUS and CDS each have a deputy: the Second Permanent Secretary (2nd PUS), and the Vice Chief of the Defence Staff (VCDS). They jointly head the Central Staff, the policy core of the Department.  

4.The role of the MOD Head Office is:

• providing strategy and policy (what our stakeholders require from Defence);
   
• military strategic command of Operations;
   
• direction through high-level plans, associated balance of investment and resource allocation required to achieve Defence objectives (where we are going);
   
• the framework of objectives and targets against which the major management/delivery areas in the Department should be held accountable (how we will get there);
   
• setting departmental standards, including on key departmental processes and process owners, and ways of working in order to drive continuous improvement (the way we do things); and
   
• the machinery of a Department of State.

5. Also within the Head Office in London sit the Chief of Staff of each of the three Services (Chief of the Naval Staff (CNS), Chief of the General Staff (CGS), and Chief of the Air Staff (CAS)). Together with the Chief of Defence Procurement (CDP), the Chief of Defence Logistics (CDL) and the Chief Scientific Adviser (CSA), they sit on the Defence Council and its executive arm, the Defence Management Board.

The Defence Council

6. The Defence Council is the senior Departmental committee. Chaired by the Secretary of State it provides the formal legal basis for the conduct of Defence in the UK through a range of powers vested in it by statute and Letters Patent.

The Defence Management Board

7. The Defence Management Board (DMB) is the highest, non-ministerial committee in the MOD. Chaired by PUS, it is essentially the main corporate board of the MOD, providing senior level leadership and strategic management of Defence. Its role is to deliver the Defence aim set out in the PSA and its membership is shown in Figure 6. Specifically, it is responsible for:

• the role of Defence - providing strategic direction, vision and values;
   
• objectives and targets - establishing the key priorities and Defence capabilities necessary to deliver the MOD's Departmental objectives;
   
• resource allocation and strategic balance of investment - matching Defence priorities and objectives; and
   
• performance management - managing and driving corporate performance.

8. The DMB has two non-executive Directors. The main reason for their appointment is to widen the horizons within which the Board determines strategy, both by applying the benefits of their wider general experience and by bringing into the Board discussions any background of specialist skills, knowledge and experience that is relevant.

The Service Boards

9. Whilst the Management Board is responsible for managing the delivery of the key Departmental outputs, the administration of the single Services and their personnel is delegated to the Service Boards (the Admiralty, Army and Air Force Boards) by the Defence Council. The Service Boards are chaired by Ministers, with 2nd PUS acting as the Secretary.

Service Executive Committees

10. The day-to-day business of managing the single Services is formally conducted through the Service Executive Committees. They are:

• The Navy Board;
   
• The Executive Committee of the Army Board; and
   
• The Air Force Board Standing Committee.

11. These Committees bring together, under their respective single Service Chief of Staff, the operational and personnel commanders for each Service. The Committees support the respective Chiefs of Staff in his executive role, his management and operational advisory roles, and as the professional head of the Service.

The Chiefs of Staff Committee

12. The Chiefs of Staff (COS) Committee is chaired by the CDS and is the main forum in which the collective military advice of the Chiefs is obtained on operational issues. The PUS attends the COS Committee.

Figure 6: MOD Top Management

Top Level Budgets

13. Most Defence activity takes place outside the MOD Head Office and is managed through eleven Top Level Budget (TLB) holders (shown in Figure 7), and five Trading Funds not included in the TLB structure. PUS grants each TLB holder extensive delegated powers over personnel, infrastructure and budget. The Navy, Army and Air Force each has two separate TLBs for its Operational and Personnel commands, and the Army has a third TLB for Northern Ireland.

14. The other TLBs are Defence rather than single Service organisations. These are:

• the Defence Procurement Agency, which procures equipment for all three Services;
   
• the Defence Logistics Organisation, which is responsible for providing logistics support to the Armed Forces;
   
• the Chief of Joint Operations, based at Permanent Joint Headquarters at Northwood, who is responsible for administering the Permanent Joint Operating Bases in Cyprus, Gibraltar, Falkland Islands (and, from 1 April 2003, the British Indian Ocean Territory (Diego Garcia)) and providing a planning capability for the execution of joint (tri-Service) Operations; and
   
• the Central TLB, includes the MOD Head Office and provides corporate services to other TLBs.

15. Each TLB holder has a 'contract' with MOD Head Office, known as a Service Delivery Agreement, which specifies the outputs required of that TLB, the resources they are given to deliver these outputs, and the authority delegated to TLB holders by the PUS. Within the TLB structure is a range of agencies, spanning the bulk of Defence support activity, including logistics, training and corporate services such as bill paying and policing (see Annex C). The Secretary of State owns and is ultimately accountable for the performance of Defence agencies and Trading Funds.

Figure 7: Top Level Budget Structure of the MOD

Last Updated: 3 Dec 03