Poor wages 'hitting recruitment'
7:45pm Monday 24th February 2014 in © Press Association 2014
Defence chiefs are paying hundreds of millions of pounds to bring in consultants because "mad" salary rules mean hundreds of highly skilled jobs are going unfilled, MPs have been told.
Poor rates of pay means candidates have not been found for around 400 jobs in engineering, commercial and programme management, the Public Accounts Committee heard.
The amount being spent on technical consultants - around £400 million - was a "reflection" of the recruitment problem faced by the Ministry of Defence, it was told.
MoD officials have held discussions with the Department for Transport, which faces a similar problem with its most technically skilled staff, and is pressing the Treasury and Cabinet Office to give it the freedom to pay competitive salaries.
Bernard Gray, Chief of Defence Materiel, told the committee: "We have only filled about 10% of those vacancies and the principle reason given to us b y potential candidates is uncompetitive salary."
A senior employee who was "running" the nuclear weapons programme until last year went to the private sector for a "50% premium", the committee was told.
The MoD wants to combine the budget for consultants and the £900 million spent on staff, then set its own competitive rates.
Asked whether the MoD ended up covering the cost of the higher salaries candidates were being paid in the private sector because they were then being brought in on contracts , Mr Gray replied: "I agree, it's mad."
"One of the many reasons I've been arguing that we need to pay people properly is so that we can manage public money better."
He added: "We pay out, when we pay these firms for technical support, significant premiums to the cost of hiring the individual. So, we are talking about something in the order of about 100% mark up on somebody's time for going out and having them off our books but supplying us with services as opposed to having them on the books."
Defence chiefs admitted the department still had some way to go to change the spending culture in the department, which has come in for repeated criticism in recent years.
Spending watchdog the National Audit Office warned earlier this month the cost overruns are being brought under control but r isks remain to the long-term affordability of the MoD's equipment programme.
The NAO report also highlighted confusion over how an underspend of £1.2 billion occurred in the equipment budget - something MPs told the MoD officials looked "fairly vague" and "intuitively odd".
MoD permanent secretary Jon Thompson admitted "there's still further work to do" to explain why the sum was not spent.
Labour's Austin Mitchell said: "It all looks fairly vague and seat of the pants stuff."