TNAG-0617-FCO40-765-Strength-and-cost-of-UK-armed-forces-stationed-in-Hong-Kong-1977 — Page 152

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You will be interested to know that the transitional costs. on the above account in excess of the DCA, all of which fall to the UK defence vote, care at September 1975 prices to $57M in 1976/77. They are estimated to come to $9M in 1977/78.

6. During the past year the MOD has been under pressure to achieve a number of reductions as part of the continuing search for econ- omies in the UK defence budget and they in turn have been pressing me to reduce civilian manpover. I on reluctant arbitrarily to reduce the numbers of locally engaged civilians because it would be necessary to replace them with more expensive Servicemen on what are cosentially non-militery tasks. Also it would be difficult to justify locally still further redundancy among civilians in Hong Kong as a direct consequence of the UK's current cccnonic straits. All this I have said in the hope that the MOD will find it possible to exclude Hong Kong from the incidence of arbitrary cuts.

This is not to say that we should not make savings whezo we can and, as I undertook in my letter to you of 27 Hay 1976, I have put in hand a study of where manpower economics might logically be · wade in the support axea which should ultimately be to the mutual benefit of both Govermento. I did so initially using my own Work Study team but thereafter invited the Ministry of Defence Inspector of Establishments to carry out a study to confirm where savings might be made, His visiting team comprises, both military and civilian experts who have the advantage of being able to compare the workload on individuals and military units worldwide. They are effectively independent consultants whose advice is widely respected.

8. The Royal Navy and Royal Air Force represent only 4% and 3% respectively of the total uniformed and civilian strength of the Garrison. As explained above, both have problems which are un- likely to be completely resolved during the next two years but the additional costs they are currently generating do not fall to the Hong Kong Govemment. Arrangements have been made for the Royal Air Force to be inspected independently from UK later this month. The Royal Navy was last inspected in September 1975, coincidental with the DCA negotiations, and support elements will again be studied by the 'Inspector of Establishments later this year.

4. So far as the Army element of the Garrison is concerned, two inspections have been completed by the Ministry of Defence toem, one of the major support units in the Garrison and the other of Headquarters. A third inspection of all the remaining units in the support area has been requested for February next year. As you will have gathered, I am persuaded that the teeth arm as opposed to the support element of the Garrison is already smaller than it should be and offers no scope for reductions.

lo.The first studies have done no more than assist in the pro- cess of getting down to the financial levels provided for the DCA, but they indieste that by the end of the 1978/79 financial year it might be possible to achieve some real savingo against the assessed Gasilcon pazsonnel costs portrayed in the TOU. Fin details, in partieulos exnet därno for effecting savings, havo yet

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