The MoD must address risks in the organisation and operation of
the RFCAs, which support and provide training sites and
facilities for 31,967 reserves, who comprise nearly a fifth (18%)
of the UK's armed forces, and 139,960 cadets, says a National Audit Office (NAO)
report.
The independent public spending watchdog's latest report
investigates the MoD's current oversight arrangements for the
RFCAs, including how it has addressed the 2019 Sullivan review's
recommendations.1
The 13 regional RFCAs support the UK's reserve forces, which have
an increasingly important role in national defence, and cadet
forces, which provide young people with valuable life skills.
They manage and maintain a network of 2,478 sites for training
and other activities, and support and promote the interests of
reserves and cadets in their local areas. The RFCAs have
established a Council as a co-ordinating headquarters, through
which public money flows to them. In 2023-24, the RFCAs received
£146.1 million of public money.
The Sullivan review, which concluded that the RFCAs' functions
supported the MoD's objectives and should be retained, included
two strategic recommendations for the MoD – to ‘regularise and
streamline' the Council and the RFCAs into a single executive
non-departmental public body (NDPB), and to appoint a senior
officer as sponsor for the RFCAs.
The MoD has now appointed an appropriate sponsor, but in April
2023, it paused the RFCA Reform Programme due to a lack of
Parliamentary time to legislate for a new NDPB. The MoD told the
NAO it planned to revive proposals for the NDPB, but the Council
and some RFCAs have expressed concerns that this might damage
local engagement, which they see as essential for delivering
better value for the taxpayer and effective support for the
reserves and cadets.
Five years on from the Sullivan review, the MoD has strengthened
its oversight of the RFCAs. It has implemented 36 out of 80
recommendations, progressed 25 as far as possible without
establishing an NDPB, and paused, not pursued or, in one
instance, transferred the remainder. It has strengthened its
financial relationship and service level agreements (SLAs) with
the RFCAs; developed a more business-like way to hold them
accountable; helped improve the stewardship of the volunteer
estate; and supported a new board structure at the Council.
However, some financial, legal and governance risks remain,
including the limitations of the MoD's powers to act if a RFCA
was to fail in delivering its duties. The MoD's oversight
operates through the Council, and it does not deal with
individual RFCAs. If an individual RFCA underperforms, the
Council has limited leverage to address this.
In August 2022, HM Treasury raised concerns about whether the
financial framework between the Council and the MoD was compliant
with its rules, which are meant to control and oversee spending.
The MoD is working on a new financial framework to address these
concerns, but it is not yet in place, and until recently the MoD
lacked the resources to regularly monitor spending.
The NAO also reports that for four years the MoD has not
published the Council's Annual Report and Accounts on time, which
brings together the accounts of all 13 RFCAs. In addition, the
reporting does not comply with accounting standards, for example
by not including a cash-flow statement. The Council's finance
team have prioritised reforming the structure of the RFCAs and
have had limited resources. The Council's 2023-24 Annual Report
and Accounts are still unpublished.
The NAO concludes that the MoD must mitigate the remaining legal
and financial risks, whether that is by creating a new NDPB or
further strengthening the current model. In doing this the MoD
will need to consider how best to retain the benefits of the
RFCAs' local identities and connections, while ensuring that they
provide cost-effective, high-quality infrastructure and support
services for reserves and cadets.
Notes to editors
Press notices and reports are available from the date of
publication on the NAO website. Hard copies can be obtained by
using the relevant links on our website.
1. In 2019 the MoD published the latest in its series of periodic
reviews of the RFCAs, which became known as the ‘Sullivan review'
after its author. The review examined the need for the RFCAs, the
appropriateness of their delivery model and the effectiveness of
their governance and management. The review made 80
recommendations for change, including regularising and
streamlining the Council and the 13 RFCAs into a non-departmental
public body (NDPB), to provide a "more efficient and effective
service" to the MoD, with "more accountable and business-like
corporate governance" and in order to address financial, legal,
safeguarding and estate safety risks.
