16 The Department's ability to effectively manage contracts, identify risks and oversee suppliers has sometimes been hampered by shortages in experienced and skilled staff. In the programmes we examined, risks around the availability of sufficient qualified and experienced staff were a recurring concern for teams. The cost of such staff is small compared with the costs of the programmes they deliver. DE&S has 'pinch point' shortages in areas vital to programme delivery. Both it, and the Submarine Delivery Agency (SDA) have made increased use of contractor support to fill in-house posts. This is costly and reduces corporate memory. When recruiting contractors, organisations may find themselves competing with each other, other parts of government and the private sector. To address this, the Department has plans to increase the skills and capabilities of its workforce across commercial management and programme delivery. In the meantime, it has set up frameworks for private sector partners to provide additional commercial and cost assurance skills more efficiently (paragraphs 4.2 to 4.5, 4.7, 4.12 and Figures 6 and 7).
17 The Department faces particularly acute problems in recruiting and retaining staff to oversee digital programmes and is now seeking to reduce reliance on contractors. The New Style of IT (Deployed) programme and the Morpheus project rely on outside contractors for 79% and 58% of their complements respectively. The Skynet 6 satellite programme is finding it difficult to rebuild capacity in space-based capability after the Department let its predecessor under a private finance initiative contract, thereby losing in-house skills. Defence Digital is disadvantaged when recruiting compared with DE&S and the SDA, which can diverge from civil service pay rates. The Department's chief information officer has developed a Strategic Workforce Plan to reduce reliance on outside contractors and improve digital skill levels (paragraphs 4.6 to 4.8).
18 Senior members of programme delivery teams can lack support and sufficient time in post to effectively manage the programme and supplier relationships. Despite the long-term nature of defence programmes, there is considerable churn among those leading them, with individuals frequently in post for only a fraction of the contract lifecycle. This is particularly true for service personnel, where there is inherent tension between the duration of these programmes and their career paths. For example, the programme managers for our sample had typically been in place for just over one year. Senior responsible owners (SROs) report a lack of key skills commonly associated with effective contract management and a tension between their accountability for programme delivery and lack of budgetary control (paragraphs 4.9 to 4.11).