Defence will embark a two-year “One Defence” restructure, the largest since the mid-90s, realigning its civilian and military functions and cutting away a sizable portion of its upper management.
The First Principles Review has recommended disbanding Defence Materiel Organisation and Capability Development Group, two of Defence’s larger civilian-employing entities. In their place, a new Capability Acquisition and Sustainment Group under a deputy secretary reporting to the secretary will be created to ensure a single end-to-end process for capability development.
A unified shared services group will be created to cover the entire organisation, where in the past DMO and other sub-agencies have employed upwards of 500 people in corporate functions identical to the rest of Defence.
Additionally, one military “three-star” position and seven SES Band 3 roles will be cut from the organisation as a result of the DMO/CDG merger — a 32% cut of that rank. The diarchy will remain with the Chief of the Defence Force and the secretary of the department at equal rank in hierarchy and jointly responsible for whole-of-organisation decisions.
If fully implemented, around 1650 civilian positions will be cut, on top of the existing 1500 personnel cut in the forward estimates. However, additional personnel may be retained or even gained in upcoming recommendations from the Force Structure Review and the Defence White Paper, originally slated for later this year.
The review argues that public servants should be used wherever a uniformed ADF member is not absolutely required, principally because an ADF member’s salary and entitlements can be around 20-40% more than their civilian counter-part at almost every rank.
Defence Minister Kevin Andrews released the review’s findings this afternoon, saying “this was not designed as an efficiency review” but to ensure Defence’s resources were fit for purpose:
“This was to look at the corporate structure of Defence to ensure it is enabled in a way which can deliver on our Defence needs for this century … If there are ADF personnel doing APS jobs, there should be a clear case made why they are doing that.”
Andrews added that all the recommendations have been agreed to in principle, bar one involving the oversight of the Defence Science and Technology Organisation.“The APS are part of the capability of Defence — they’re not some separate organisation.”
Design and implementation plans will be immediately initiated starting with changes to SES Band 3 positions and progressively affecting other SES and Executive Level ranks over the three, nine and 15 month milestones. New performance agreements for SES and EL 2 positions will be rolled out in three months. EL 1 positions will follow in 15 months, along with the roll-out of the performance management system for higher grades.
The strategic workforce plans for all job families will include a skills audit of current personnel, future skill requirements and gaps. There will be a bell curve distribution for personnel performance. The report says Defence’s existing performance management tools were not effectively used:
“We view this as a failing of leadership and management. Staff need to be informed of priorities, what is to be done, why it is necessary and how it contributes to the larger Defence mission. Leaders have to set the example though behaviour. Difficult conversations not held are detrimental to the performance of individuals, and to the morale of other staff who see pay increase awarded for underperformance.”
Less than 2% of APS personnel at the department were rated below satisfactory in 2014 according to the report, an indication that hard conversations were not taking place. A sample of performance agreements showed that performance goals were not always clear or focused on outcomes.
The new strategic workforce plan — apparently Defence’s first to include public servants — will in future become part of the budget process. In two-years time, Defence workforce footprint should be reduced to around 16,000 personnel, and around 1000 uniformed personnel currently undertaking public service duties returning to their military service.
Defence force chief Air Chief Marshal Mark Binskin said this would strengthen the relationship between civilian and military personnel:
“The best bit out of this is that it continues to blend the APS and the ADF together. The APS are part of the capability of Defence — they’re not some separate organisation. They are a key part, we are an integrated force: one Defence and that’s what brings us together.”