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The head of the Ministry of Defence has said that the organisation intends to use the current imperative to cut staff and costs as an opportunity to drive technology transformation.

In support of ministers’ ambitions to reduce the civil service headcount by 91,000 – first set out earlier this year by former PM Boris Johnson – departments were asked to model 20%, 30% and 40% reductions in their staffing levels.

In a letter to parliament’s Public Accounts Committee, the ministry’s permanent secretary David Williams said that, rather than focusing on staff numbers, the MoD had instead considered the cost savings it could make. He said the department could cut its staff budget by 7.5% and still deliver on its commitments. Williams did not spell out how many jobs might need to be cut to achieve this.

While job-cut plans are developed across government, Williams said he is “keen we use the work as a catalyst for improvements in how we run and manage the department”.

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This will include using digital transformation, automation and increased sharing of services to make the department more efficient, Williams said.

Various other government agencies – including the Department for Transport, and the Department for Environment, Food and Rural Affairs – have previously signalled an intention to help enable the desired headcount reductions by making better use of technology and digital platforms.

Elsewhere in his letter to MPs, Williams flagged up two major risks to the department’s spending on contracts.

“Firstly, there is the risk of price increases although, to an extent, our commercial mechanisms protect us from this in the short term,” the letter, written on 6 September and published last week, said.“Secondly, there is the risk of schedule delay feeding through as labour shortages, supply chain bottlenecks and shortage of materials bite. This could reduce spend in the short term with financial pressure to follow in later years.”

Inflation has risen to almost 10% from around 4% in October 2021, when the last spending review took place. 

The department has brought forward some costs and is keeping its work “under constant financial review” in a bid to limit the impact of financial pressures, Williams said.