Reports and Publications

• Defence Capability and Resourcing Review (DCARR)
  • Contents
  • Executive Summary
  • PART 1 - Background
  • PART 2 - The Operating Environment
  • PART 3 - The Condition of the NZDF and Ministry of Defence
  • PART 4 - Capability Gaps, Funding Options and Implementation
  • PART 5 - Conclusions and Recommendations
  • Appendix 2: Distribution of Increased Appropriation in First Five Years

Final Report
Defence Capability and Resourcing Review (DCARR)

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PART 5 – Conclusions and Recommendations

1. The DCARR concluded that as a result of many years of under-investment, and notwithstanding the implementation of the LTDP, capacity and capability in some areas is below the requirements of government policy:
   1. personnel numbers in the three services, HQ NZDF and HQ JFNZ are below the levels required, and cannot be rapidly increased to the required levels;
   2. the number and trained state of personnel in some trades is deficient;
   3. some major weapons platforms are not yet aligned with the government’s intentions, although the LTDP will address this;
   4. some military equipment (other than major weapons platforms) is below the required standard;
   5. contingency reserve stocks are depleted;
   6. there is a backlog of maintenance and capital expenditure in the Defence Estate, which can not be fully addressed in the short term; and
   7. aspects of corporate management capability are depleted
2. There are a number of reasons for the capability gaps. The most significant were:
   1. a prolonged period of fiscal constraint throughout the 1990s;
   2. a higher operational tempo since 1998;
   3. equipment continuing in service beyond its economic life;
   4. strong labour market affecting the ability to recruit and retain key personnel; and
   5. a reduction in NZDF Headquarters and support capabilities due to the high and prolonged operational tempo.
3. The DCARR nevertheless determined that it is possible to maintain the present operational tempo (the combination of what capability is delivered, and how much) while the NZDF builds its capability to the levels required by government, within the constraints of the existing condition of the organisation, future planned equipment upgrades, and the likely available future funding. This will require the recovery programme to be spread over several years.
4. The DCARR made a number of recommendations which address key aspects of capability.
   1. In view of the particular situation of the Army, the NZDF, in conjunction with the Ministry of Defence, should undertake a special study to establish how the Army should be configured to best maintain its operational capability during the next few years as it builds its capability towards the level required by government policy.
   2. Strategic HR Policy should be closely aligned with the LTDP, to ensure that the future HR implications of equipment purchases are given appropriate focus at all times.
   3. A number of initiatives are already underway within the NZDF to address the acknowledged weaknesses in corporate management systems. Projects currently under way should be given priority and should be adequately resourced. These include:
      1. the creation of a Planning Branch to coordinate the strategic planning and programme management capabilities of the HQ NZDF, and to monitor progress of the organisational activity arising from the DCARR and RASA;
      2. continuing implementation of the Capability Management Framework processes to integrate the implications of capital acquisition planning into strategic decision making; and
      3. the roll-out of enhanced frameworks for corporate planning, risk management, performance management and knowledge management across the NZDF.
   4. The NZDF should develop a comprehensive Real Estate Strategy aligned to its over-arching Strategic Plan.
   5. In the context of the Real Estate Strategy, a comprehensive housing and accommodation assistance policy needs to be developed, which clarifies the intent of housing assistance and identifies future requirements for defence owned accommodation.
   6. The DCARR endorses the initiatives already in place to manage cost pressures, and recommends that the NZDF continue to pursue opportunities for further efficiencies.
   7. The Ministry of Defence should act to strengthen its policy capability to provide “purchase advice” to the government on the policy effects of NZDF outputs, including strategic planning, the alignment between outputs and policy, the assessment of capability choices in terms of their contribution to policy and their value for money and the strategic level allocation of resources to outputs.
5. DACRR endorses the intent of the ten year Defence Funding Package (DFP), developed by senior NZDF, Ministry of Defence and Treasury officials in conjunction with DCARR in line with Ministerial guidance, that will enable the NZDF and Ministry of Defence to build capability to the level required.

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