17 The Department has not identified further potential savings measures should the headcount reduction not deliver the required financial savings. Instead it is relying on some financial contingency and the tranche structure of the redundancy programme to give it flexibility. As planned savings are sensitive to several factors including delays to the redundancy programme, this approach may not be sufficient. For example, the second military tranche has been delayed by three months to allow for broader changes in the Department. The delay has reduced savings from this tranche alone by an estimated £100 million to £138 million to 2015; 4 to 5 per cent of total savings projected to be made in the military headcount reduction.
18 The Department has not yet developed detailed plans on how it will reduce the Army headcount further. The Department has to reduce the numbers in the Army by a further 5,000 as a result of the three month exercise to cut costs. The Department has started to redesign the structure of the Army around this new figure. It has not yet profiled the numbers of people that will go through natural wastage or through redundancy. Any delays to the process would erode the point at which the resultant savings exceed the cost as the Department continues to pay salaries, benefits and contributions to pensions.