Financial consultancy services

Tender description

In the context of its budget forecast, MoD is looking for additional external and independent assurance to answer the following questions: 1) How credible is the revised efficiency plan within the MoD financial forecast? 2) How robust is the delivery confidence and value estimation for efficiencies at both TLB level and in the overarching financial forecast? 3) How much financial risk is being carried and to what extent do you think this risk is too much or too little in the overall financial context of the department’s financial position? 4) Do the planning assumptions currently used stack up? 5) How much confidence is evidenced in delivery milestones and what level of risk is there in the profile of savings currently assumed? 1) The Ministry of Defence (MoD), like all other Government departments, has a requirement to deliver efficiency savings in order to transform its business and create the headroom for investment and sustainable overall savings in public expenditure. In successive Spending Reviews, MoD has committed to savings targets and up until recently has had a very good track record of delivery; 2) MoD, agreed to substantial additional efficiency savings in the 2015 Strategic Defence Spending Review and whilst it has line of sight to nearly 80 % of the total, it is struggling to achieve planned savings in the early years and in some areas does not yet have confidence in deliverability or quantum; 3) The MoD is in the middle of its annual budget cycle "ABC 18" which updates the MoD 10 year financial forecast and sets a budget for the year ahead. This forms a critical input to the National Security Capability Review (NSCR) led by the National Security Adviser (NSA), and is also the basis upon which the department assures and understands Top Level Budget (TLB) progress in achieving savings; 4) MoD has undertaken significant assurance work internally over the summer of 2017 over its efficiency savings, with much more detail and understanding of its plans. MoD has also invested in more capacity and capability to deliver this work and has recently appointed a chief operating officer to lead MoD’s strategic efficiency plan working closely with TLBs. However, the financial challenge faced by MoD is so significant, that the confidence with which we need to assure ourselves and Government of savings plans needs to be increased. There are specific challenges in the early years of the financial plan, where the gap between the funding required and that provided by HM Treasury is significant and partly is driven by reduced confidence in delivery of savings quickly. Objectives/Deliverables: 1) MoD is now looking for additional external and independent assurance to answer the following questions: (a) How credible is the revised efficiency plan within the MoD financial forecast? (b) How robust is the delivery confidence and value estimation for efficiencies at both TLB level and in the overarching financial forecast? (c) How much financial risk is being carried and to what extent do you think this risk is too much or too little in the overall financial context of the department’s financial position? (d) Do the planning assumptions currently used stack up? (e) How much confidence is evidenced in delivery milestones and what level of risk is there in the profile of savings currently assumed? 2) MoD is not looking for a detailed audit, nor does it want to constrain advice or views to these questions alone if there is value to be had in observations beyond the specific questions and themes identified above; 3) The contractor will provide a draft report to the DG Finance for discussion with a final report for discussion with the MoD Permanent Secretary, Chief Operating Officer and DG Fin; 4) The contractor will provide a short report in powerpoint presentation format which is capable of being shared with colleagues in Cabinet Office and HM Treasury. This is likely to include a formal presentation of findings with the Cabinet Secretary and possibly with other senior colleagues in Government. Independence: 1) In addition to relevant experience operating at this level of Government, independence of thought and judgement is a key requirement in order that final conclusions have credibility both within and outwith MoD. Many of the efficiency savings proposed within the MoD financial forecast and requiring assurance have been developed with the direct assistance and advice of external advisers. MoD considers that a conflict of interest may arise if past participants (certainly at an individual level) were to offer their services in response to this requirement.