3.1 This part assesses the main obstacles to the Department in delivering a sustainable savings programme. These include managing the timing of the tranches to maximise savings and relying on the transformation programme to change ways of working. We also assess the impact on the Department in terms of skills. The skills required under the new operating model will need to be identified early and retained for strategic objectives to be delivered.
3.2 Our experience of previous savings programmes is that an average of 20 per cent of gross annual savings targeted are not realised. Consequently, organisations often need to find further reductions to achieve overall savings targets. The Department has not identified further potential savings measures to find additional cost reductions if it fails to deliver the targets of its current plan. Instead, the Department is relying on some financial contingency and the tranche structure of the redundancy and early release programmes to be fexible enough to meet the financial savings target.
3.3 The Departmental Board monitors the progress of reducing headcount and the risks to delivery through its existing reporting arrangements. The Board receives reports on the Department's progress in delivering the savings required by the Strategic Defence and Security Review, although we have not found evidence that it explicitly measures the progress made by headcount reduction towards reaching its financial target.