'Are we stuck in the 1950s? Certainly not.' Sir Stephen Lovegrove on modernising the MoD

Written by Jess Bowie on 22 July 2019 in Interview
Interview

Three years and three secretaries of state into his time as Ministry of Defence permanent secretary, Sir Stephen Lovegrove discusses diversity, procurement lessons, and how long his staff can expect to put up with his jokes

Photos: Louise Haywood-Schiefer

The permanent secretary of the Ministry of Defence – a lofty figure in every sense – reached his current height of almost 6’6” aged 16. It was great for getting into pubs back then, but these days he doesn’t really think about being tall. Except when he encounters a low-hanging steel joist, that is.

“One day, when I was working at what’s now BEIS, I was having to run to a meeting and I ran straight into one and knocked myself out,” Sir Stephen Lovegrove recalls, laughing. “So now they all have these big yellow warning strips on them. And that is, I think, probably my only permanent legacy in that department.”

More recently, Lovegrove towered over his new boss as he stood to greet her on the steps of the MoD. Penny Mordaunt arrived in May after the swift sacking of Gavin Williamson, in the fallout of a leak from the National Security Council. She is the third defence secretary Lovegrove has worked for since he moved from the (now extinct) Department of Energy and Climate Change in 2016.


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“As a permanent secretary, you give the secretary of state a confidential personal briefing, which supplements all of the official briefings, of which there are many. I mean, it’s about three lever arch files worth of formal briefings,” Lovegrove says, when asked to describe a day in the life of a perm sec who has just discovered he has a new defence secretary.

“The aim is to try and synthesise and simplify the main themes and challenges, and to identify the things that they really have to take a view on early in their tenure... And then, obviously, you’ll be guided by the secretary of state’s own personal preferences and interests.”

The first woman to occupy the role arrived knowing more than many of her predecessors. She is the daughter of a paratrooper and was named after the naval cruiser HMS Penelope. Her constituency is in Portsmouth, home of a Royal Navy base. She is also a naval reservist and, in Lovegrove’s words, “knows defence very well”.

Moreover, Mordaunt has spoken out in the past about making the forces more accessible for women, citing her own experience as a reservist. Like all departments, the MoD has a number of initiatives and networks to help it become more representative of the country it serves. But the ministry still has an image problem. After hearing that CSW was going to interview Lovegrove, one female senior civil servant from another department said: “Ask him why his department is stuck in the 1950s.”

Lovegrove asks if the official in question has ever spent time working in the department. She has not. “Ah, so that’s about perceptions rather than reality,” he replies.

Before addressing the many ways in which the department is “on the move”, Lovegrove discusses why he thinks those negative perceptions still endure. The MoD is, he says, a vast organisation – so large that it could occasionally feel that it was a bit self-sufficient. As a result, he thinks progress might have been slower than in other parts of Whitehall.

“And combined with the very strong cultures of the Armed Forces – and those are, you know, a real strength: servicemen and women need to feel part of powerful, strong cultures to do the things that they are asked to do – but I think it has led on the whole to a bit of a ‘Fortress Defence’ type of feeling.”

Now, though, the department is making “big strides in changing that – both externally and internally”. He goes on to list some of the ways the MoD is shaking off its old-fashioned, insular ways.

Firstly, it is trying to be a better colleague to other parts of Whitehall. “We know that we’ve got to work better with other departments,” Lovegrove says. “And not just the usual suspects, like the Foreign Office and the agencies, or supporting DfID with hurricane relief and so on, but also with BEIS and the Department for International Trade. The British defence industries are very important to the nation, and we are only going to make the best prosperity pitch if we do that alongside colleagues from around Whitehall, rather than think we can do it by ourselves.”

The department is also looking inward – in the right way this time. As it was for many parts of government, the Chilcot report on the Iraq war was “a very big wake up call” for the MoD, Lovegrove says. A significant amount of work has followed to embed a culture of challenge and ensure “all voices are heard”.

“So we’re doing that; we’re bringing civilian and military staff much closer together so both sides can benefit from the other side’s thinking; and we’re trying to empower our employees as much as we possibly can, so that they can contribute more effectively, and do so without the sometimes slightly over the top levels of hierarchy that we have in this organisation. That is a really, really big theme for us.”

Can he give a concrete example of where staff have been empowered? “This year, we’ve taken away the budgets for infrastructure from our Defence Infrastructure Organisation and given them to the front line, so that the Army, Navy and Air Force and indeed other organisations can spend their infrastructure budgets in the way that they know is going to be most effective, rather than being dictated to by the DIO.”

These are “big sums of money,” he says – and they now live in the front line command.

Empowerment will mean different things to somebody running a military base in East Anglia and a policy professional in head office, Lovegrove says, and he admits that in London, the MoD still has ways of developing policy advice for seniors which “are probably not as fast as the rest of Whitehall”. Nor are they “really fast enough to be able to respond to and reflect the very fast-moving world that we live in”. So this too is a work in progress.

Cold stats illustrate another of Lovegrove’s challenges. The MoD has been bumping along the bottom of the Whitehall diversity charts for a while, with both women and those from black, Asian and minority ethnic backgrounds underrepresented at all grades.

In 2019, 43% of the department is female and 35.7% of its senior civil servants are women, while 5.2% of officials overall are non-white and the number of BAME officials in the SCS is “too low to declare” without individuals being identifiable. While these figures have been climbing every year, it’s clear more must be done to prove to those on the outside that the MoD isn’t just a place for white men.

For Lovegrove, “the best way of doing that is to use the ambassadors we have in the department to demonstrate it on a daily basis”.

“There are some very high profile people here who don’t come from traditional defence backgrounds,” he says. He cites the recent appointment of Professor Dame Angela McLean as the department’s chief scientific adviser, and the fact that three of the MoD’s seven directors general in head office are women, which “certainly hasn’t been the case” here in the past, and “is not the case in any of the other defence ministries that I’ve visited over the last three years either”.

“So, you know, talking about it, making it clear that we have real role models in the department; making sure that we’ve got women and other underrepresented groups on all of the selection panels, making sure that we put everybody through staff engagement processes, all of those techniques that you have in making the kind of appointments that you want to make – all those things we are using.”

As for the official who said the MoD was stuck in the 1950s, “We should make sure she comes over and spends a bit of time in the MoD,” Lovegrove says. “She should talk to Cat Little, our DG of finance [who is also the MoD’s race champion], she should talk to Vanessa Nicholls, who runs nuclear enterprise, she should talk to Linda Dann and Polly Scully, who did all of our Brexit planning and organised all the Brexit contributions that defence made to other departments.

“We need to tell our story a bit more vocally, and get the message out there that when it comes to Fortress Defence, the drawbridge is lowered”

“She would see that there are women who are enjoying their work in defence and being treated at least as respectfully as men, both in terms of their person and their professional aptitude. And I think we just need to tell our story a bit more vocally, and get the message out there that when it comes to Fortress Defence, the drawbridge is lowered.”

The fortress isn’t Lovegrove’s only martial metaphor – he often reaches for phrases which have a military ring. During his last interview with this publication, he spoke of “being at the base camp of Brexit” and today, when describing the steps a perm sec takes to welcome a new defence secretary, he talks of “mapping out the main contours of the landscape as you see them”. (A few minutes before saying this, Lovegrove has whipped away a literal and presumably classified map that has been leaning against a wall in his office, for fear it is accidentally snapped by CSW’s photographer).

Lovegrove studied English literature at Oxford before a series of jobs in the City, and his years in the private sector and Whitehall have clearly done nothing to dull his love of language. But what about his eye for a good plot? He is married to the prominent British screenwriter Kate Brooke, whose credits include The Forsyte Saga and Mr Selfridge. Does she ever mine him for tales of Whitehall intrigue?

“It would be fair to say that my wife does try to mine me for interesting story ideas. But I think you can rely on my discretion,” he says. “She might occasionally have an idea and then ask me if it’s plausible – you know, ‘Does that work?’ or ‘Would they ever do it like that?’

“And I often say, ‘No, they wouldn’t ever do it like that’.” Lovegrove pauses, before bursting out laughing: “And then she just writes it anyway.”

One side of life in a government department that a screenwriter might find less inspiring is its budget – although the scale of the MoD’s spending is, in its own way, dramatic. The department’s 10-year equipment and support budget is around £180bn, with a potential funding shortfall of at least £7bn.

Those in defence circles hail Lovegrove as a competent manager and accounting officer. He worked in communications for Deutsche Bank before joining the Shareholder Executive, the body that, until it was dissolved in 2016, managed the government’s commercial interests in state-owned businesses. He is also a former chairman of British Nuclear Fuels.     

According to one Whitehall watcher, the perm sec’s business experience and his time in other departments make him “a fresh pair of eyes” and more “streetwise” than some of his MoD predecessors.

Likewise a select committee member who has interrogated him on numerous occasions says: “He knows what he’s talking about and is over the detail – and when you’re in front of us it’s immediately obvious if someone doesn’t know their stuff.”

But is there only so much one perm sec, however competent, can do? The fact remains that the ministry has acquired an unfortunate reputation over the years for its ability to manage projects: they always end up over budget and behind schedule, experiencing numerous problems along the way.

Some argue that it is simply the nature of the beast and that managing defence projects will always be like trying to hit a moving target. In the years it takes to complete them, both your enemy and the technology will have changed, so you are constantly having to change specifications, which costs more money.

Others take a less favourable view and say that, when it comes to procurement, the department is simply dysfunctional.

“The department certainly isn’t dysfunctional when it comes to procurement,” Lovegrove says without hesitation. All large capital projects, whether they are public or private sector, are subject to scope creep and cost and time overruns, he says, which is why they have contingencies built into them. He then cites the Dreadnought-class nuclear submarines currently being built.

“The Dreadnought programme has a basic budget of £31bn, with a £10bn contingency. Exactly how much of that contingency we end up using, I don’t know. I’d be surprised if it came in dead on £31bn. And I would like it not to be closer to £41bn. But the reality is that building a nuclear submarine like that is the most difficult technical challenge in the world apart from putting a man on the moon, and really big, long, complex programmes like that will be subject to difficulties in the process. And many of our programmes – while not always quite as extreme as that – are in that kind of category. So we have plenty of ways of managing the inherent uncertainty involved.

“The second thing is that people often say that the defence capital budget is ‘£17bn worth of unaffordability built in over the next 10 years’, or whatever. The truth is, over a 10-year period, you can choose to do things or not do things which mean that you can manage what looks like quite a bald figure at the start of the process throughout the process. And that is what the department will always do. And we don’t overspend on an annual basis, because we’re constantly pulling the levers we can pull on what is a very large set of programmes.

“Having said all of that, do we acquire everything absolutely perfectly? No. Nobody does. And like everybody else, we are in a process of constantly trying to improve our procedures,” Lovegrove says. He adds that the department currently has “four big transformation strands” under way: in people, digital and information systems, logistics and support and in acquisition.

“Do we acquire everything absolutely perfectly? No. Nobody does. And like everybody else, we are in a process of constantly trying to improve our procedures”

“And we do want to see whether there are ways in which we can get our acquisition more nimble, with better predictive capability, so that some of the problems inherent in programmes like this are minimised.”

One area where more “predictive capability” might have come in handy at the start is Army recruitment – a high-profile example from recent years of an MoD project going off the rails. Outsourced to Capita in 2012, the programme has missed its targets every year since.

What lessons has the MoD learnt from the ongoing and – to quote the Public Accounts Committee – “abysmal” contract?

“Well, there are quite a few lessons out of that and I don’t fully subscribe to the PAC’s judgement on that contract,” Lovegrove says. “The main lesson though is that there was an assumption on the part of the Army – and it was, perhaps, agreed to on the part of Capita – that a wholesale change in the technology underlying that particular contract, which is quite complex, too complex, was capable of supporting the kind of ambitions that the contract had in the first place.

“So it was over-specified, and the technical complexity of the systems-change underlying it, which then moved from the Army to Capita to manage, was underestimated. And that is really at the root of the problems.”

The closure of half of the Armed Forces’ local recruitment offices has not helped matters. Asked if the Army will now reopen some of them, Lovegrove says: “I don’t know about recruitment centres, but what I do know is that the decision to have the first personal interaction with a potential recruit not be with a soldier, but somebody from Capita – which was driven for very good reasons, because they wanted to release as many soldiers as they could to the front line – certainly did not improve recruitment rates. And the Army is now returning to having, as it were, recruiting sergeants being the person that potential recruits talk to, and that has got to be a good thing.”

“It is probably best to start where previous hearings have taken us, which is with an acceptance... that the 1996 deal was a poor one,” Lovegrove said in May at the beginning of a Public Accounts Committee hearing into military housing.

He was referring to the sale of the MoD’s housing stock 23 years ago to the private company Annington. The so-called sale and leaseback contract – dubbed “appalling” by PAC chair Meg Hillier – has already lost the MoD billions, and more potential losses loom when rents are renegotiated from 2021.

Speaking to CSW for this article, Hillier praises Lovegrove for his “ability to see problems from a mile off”. But one of her big concerns about permanent secretaries in general is the constant “musical chairs and revolving doors”: perm secs have a habit of sticking it out for three or four years, and then retiring or moving onto the next thing, she says. Hillier wonders if Lovegrove – or any MoD perm sec – will stay at the department long enough to drive through the necessary institutional change. If he could remain in post for, say, 10 years, he might be able to see off future crises like Annington Homes before they happen, she suggests.

So how long is he going to stay? Or perhaps this is his exit interview?

“Ha! Maybe when it gets published I’ll discover that it was my exit interview, I don’t know!” Lovegrove laughs.

“But, ‘how long are you going stay?’ – I don’t know. If the basic question is: do permanent secretaries need to stay long enough to be able to get to know their brief, see where the big tensions are in the job that they’re doing, try to put in place things to deal with those and then see them through, then I absolutely agree with the chair of the PAC on that.

“I mean, I haven’t typically changed my jobs very often. I was in the City for a long time. And then I joined the Shareholder Executive and I was there for seven or eight years. And then I was at DECC for three and a half years and then, well” – he pauses to chuckle – “it got abolished. And then I came here, and I’ve been here for just over three years. And you know, I’m not proposing to go anywhere at all.”

He adds that in the private sector, “maybe 10 or 15 years ago”, the problem was the other way. Bosses stayed too long, they became “a bit stale and complacent” and, having appointed everyone underneath them, were becoming too powerful. “There’s no challenge. There’s no obvious succession. So, you know, there’s a balance to strike.”

As for staying 10 years at the MoD, that “may be a bit too long”, he says. “I think people might tire of my jokes by then. But I agree with Meg that the right thing to do is to give a proper run at some of these problems and for people to take responsibility for the actions that they put in place.”

During our earlier conversation about his height, CSW has reminded Lovegrove that taller people are statistically more likely to be successful. Does he think it has helped his own career?

“I would hope that that wasn’t the only reason that anybody asked me to do a job... but maybe it was? They didn’t say so at the time!” he says, smiling.

An advantage of his current elevated position, however long he keeps it, is that the ceilings at the MoD are nice and high, leaving Lovegrove free to make the right kind of impact.

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Jess Bowie
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Jess Bowie is editor of CSW.

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