Original URL: http://www.theregister.co.uk/2012/02/20/mod_contractors_vs_staff/

Unions: MoD 'mad to fire staff while increasing consultant spending'

Calculator says no – but watch the colonels

By Lewis Page

Posted in Government, 20th February 2012 15:39 GMT

Analysis UK public-sector unions say that revelations of what the Ministry of Defence (MoD) spends on specialist consultants show that current plans to fire tens of thousands of staff will lead to increased expenditure. Could they be right?

In a word, no. The Guardian reports, in an exclusive of the sort perhaps not hard to obtain when unions see their members' jobs threatened and those members have access to the figures in question, that internal MoD figures show annual spending on consultants - both technical experts and management types - stands at a whopping £290m. Meanwhile plans are underway to cut 60,000 in-house staff (both uniformed service personnel and civil servants) at the Ministry.

"One of the effects of these cuts is that expenditure actually increases as the MoD has to pay consultants to do the work of those leaving the department," union man Steve Jary told the Graun.

It's calculator time. A civil servant is paid on average £22,850 according to the unions. Average pay for the armed forces is if anything a bit lower. Both classes of employee get pensioned off, in the forces never later than age 55, often earlier: in the civil service at normal retirement age. Call it age 60 across the board. Then they will live on and draw their pensions of around £8k in today's money until they die, maybe at age 80.

In other words a year's work from a civil servant or serviceman costs something like £31,000 pounds on average. Getting rid of 60,000 of them, then, should save something on the order of £1.86bn a year. Even if current spending on consultants tripled as a result, the public purse would still be approximately a billion pounds a year better off. It would need to septuple before the decision was costing money.

It's no wonder that the MoD thinks it may be on the verge of actually balancing its books for the first time in decades, though sadly many of the savings aren't to come from axing the many many thousands of Defence employees who do little or nothing of use. Far too many muscles and teeth - capabilities, in military speak - are being cut off along with the lard at the moment, and often they are the wrong ones to boot.

Then, it would be lovely to think that the vanishing 60,000 would include at least a few thousand surplus military officers at the senior ranks of commander/lieutenant-colonel/wing-commander and above, plus corresponding civil-service mandarins and grandees. But history doesn't suggest any such positive outcome. Astonishingly the chair polishing, rubber-desk-johnny colonels and captains and wingcos - very few officers at these ranks work in combat units - have managed to swell their numbers by several per cent over the past decade, even as the junior officers and enlisted ranks have been decimated.

Based on the years 2000-2011 (during which 30,000 service personnel were cut but the MoD gained 270-odd posts for officers of grade OF-4 and OF-5) the disappearance of 60,000 bodies overall will probably mean that the MoD gains at least another 500 well-paid and luxuriously pensioned colonels or equivalent.

There's a prospect which might find taxpayers and public-sector unions in agreement for once, if not for positive reasons. ®

Full disclosure: Lewis Page is just bitter. Had he stayed in the Service he would certainly have been a lieutenant-commander now by time served, quite probably a commander (not so much because he was a great naval officer, even less so because his superiors considered him one, but purely and simply because so many of his generation left in disgust and as a result - combined with the increased numbers of senior billets - almost everybody who stayed has been promoted). Instead like a fool he's in the private sector paying for the commanders' fat salaries, pensions, boarding school fees etc.