TNAG-2239-FCO40-3218-Future-of-Hong-Kong-Royal-Navy-presence-1991 — Page 23

TATEMENT ON THE DEFENCE ESTIMATES-1990 ANNEXB

savings building up to some £55 million a year. Cleaning 'nd catering contracts still constitute a large proportion of the sayi but we are increasingly focusing on more sophisticated areas of support activity like air traffic control and engineering. We are promoting ways of increasing flexibility by, for example, using area and multi-function contracts to replace large numbers of individual contracts.

406. We have secured economies in the use of Service manpower, allowing resources to be transferred to the front line. This improves operational effectiveness without a corresponding rise in personnel. There has also been a significant reduction in civilian manpower numbers.

THE NEW MANAGEMENT STRATEGY

407.

Next year, we plan to introduce the New Management Strategy (NMS), described in last year's

Statement. This will radically change the current system of central financial control to one where budget holders, at all levels throughout the Department and Commands, will have delegated authority over the resources they need to carry out their tasks. Aligning financial authority more closely with executive responsibility in this way, together with the associated system of planning and performance review, will enable better value for money to be obtained from our operating costs, and give clearer direction to our work.

408. In the past year we have completed the budgetary arrangements under which the Department's operating costs for the armed forces, currently amounting to over £12,000 million, will be allocated to 21 Top Level Budget (TLB) holders, including the operational and support Commanders-in-Chief. These TLBS will be supported by

Figure 11: Estimated Costs of Defence Commitments for 1990-91 1.2

Home Base

£2.557m

Nuclear Strategic Force £1,480m

3

Other3

£858m

£2.086m

Eastern

Atlantic

£2,672m Maritime

£586m Channel

Berlin £63m

RAF Germany (incl. reinforcement

forces) £947m

£4.135m

Central Front

£3,125m

BAOR (incl. reinforcement forces)

NOTES:

1. The total cost matches the total expenditure (£11.702 million) covered by the first six sections of Table 2.3 of Volume 2.

2. All the costs shown include directly attributable expenditure on capital works and equipment and are operating cosis

for material and manpower. The costs of operational headquarters, bases and general operational support have been attributed pro rata.

3. Other expenditure in this diagram includes the costs of amphibious capability, the Allied Command Europe Mobile

Force (air and land), the United Kingdom Mobile Force, and out-of-area commitments.