2.15 The Department found unclear responsibilities and accountabilities between the commands, who specify equipment requirements and hold budgets, and DE&S as 'deliverer' of these requirements, was a root cause of poor performance in DE&S. Individual projects gained approval for significant investment without full account of their impact on the Department's overall affordability position. As such, the Department believed that the future organisational design for DE&S must include:
• increased clarity around responsibilities and accountabilities, and a separation of duties between DE&S and the commands, plus stronger governance arrangements;
• hard-charging the commands for DE&S's services to ensure workload is defined; and
• setting a baseline to measure performance against, and to ensure change control process for new work is better regulated.
2.16 Responsibilities and accountabilities throughout defence have been formalised. Much of the improvements to the interface between the commands and DE&S has come through the new defence delegated operating model (paragraph 1.9), as well as a requirement from the Materiel Strategy team to better define accountabilities in preparation for implementing a GoCo. In May 2014 the Department published a framework document reaffirming DE&S's purpose and role, with the governance, policy, financial and human resources parameters that guide its day-to-day work.
2.17 Organisational changes from the new operating model have streamlined DE&S and focused it on delivery of the Equipment Plan. From April 2013, 120 capability planning staff transferred to the commands. In April 2014, 1,200 staff responsible for managing UK naval bases transferred to the Royal Navy and 2,000 Information Systems and Services' staff transferred to Joint Forces Command.
2.18 To improve accountability, head office no longer manages the Equipment Plan budgets. In April 2014 budgeting responsibilities moved to the commands, who are now responsible for setting budgets and also holding DE&S to account for delivery.
2.19 To make greater efficiencies from DE&S's £1.3 billion annual operating costs, the Department expects to implement a 'hard-charging regime' in a limited form from April 2015. DE&S will recover its operating costs from the commands, who hold the budget, rather than DE&S receiving budgets from head office.
2.20 The commands are developing and agreeing with DE&S quasi-contracts specifying the equipment and support DE&S will provide and the resources the commands will provide.35 Although these contracts are not yet in force, the Department plans to further develop them and expects these will influence its corporate key performance indicators from 2015-16.
2.21 DE&S now has greater autonomy as a departmental arms-length body. A DE&S board has been established, including a non-executive chair and members to advise and constructively challenge the chief executive, supported by an executive board (Figure 5).36 The chief executive is responsible to Parliament for stewardship of DE&S's resources as an accounting officer.
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35 Command acquisition and support plans (CASPs).
36 The executive team leads day-to-day management of DE&S. It is made up of the chief of defence materiel as chief executive of DE&S, the director general resources as chief finance officer, the chiefs of materiel for Fleet, Land, Air and Joint Enablers, the human resources director, the commercial director and the exports director.