Viewpoint: How to make Nato leaner, meaner and cheaper

Reforming Nato's military and civil structures is never easy because so many vested interests are at stake, but important steps were taken at the summit in Lisbon to make it leaner and more efficient - saving taxpayers' money.

It's easy to see why reform is needed. Nato has:

  • Two separate staffs - civil and military, often dealing with the same issues
  • 11 fixed military headquarters, manned by more than 13,000 military officers
  • 14 agencies with overlapping responsibilities
  • More than 300 international committees
Image caption The 14 Nato agencies, including the one managing the Eurofighter, will be merged into three new bodies

Alliance leaders made it clear in the months leading up to Lisbon that they wanted to bring costs down, in line with national defence reductions.

Nato currently costs 2.5bn euros (£2.1bn, $3.4bn) per year - for headquarters, investments funded jointly by the 28 member countries, and additional funding for Afghanistan.

There was no agreement on unifying the separate civil and military staffs, but decisions were taken at the summit to cut the command structure by more than a third, and reduce the cost of the agencies by a fifth.

These steps should result in better value for money.

Command Structure

Nato has no armed forces of its own, they are all individually owned by the nations that belong to the alliance. But its command structure sits above and is separate from these forces.

There are two Supreme Allied Commanders, one based in Mons, Belgium, the other in Norfolk, USA.

All operational command headquarters come under Supreme Allied Commander Europe (SACEUR). There are nine of them in seven European countries - but most of them are never in practise used for operations.

For example, when Nato deployed forces in the Balkans and Afghanistan, SACEUR took charge, with limited assistance from Joint Force Commands in the Netherlands, Italy and Portugal. The headquarters in the field were provided initially by elements from Nato's nationally-owned forces (such as the Allied Rapid Reaction Corps HQ, provided by the UK) and then by ad hoc fixed headquarters, which remained for the duration.

Alliance leaders at Lisbon were only asked to agree on the overall size of the reductions - the total manpower requirement is to come down by almost 5,000 posts - around 35% - to well under 9,000.

The number of headquarters will be reduced from 11 to seven.

But the real difficulty with reforming the command structure is not deciding to reduce it but agreeing how and where to do so. The argument over which ones should go will continue into next year, with much horse-trading as nations fight to keep Nato flags and Nato jobs.

Pointedly, the task of preparing the final proposals, by June 2011, has been given to Secretary General Rasmussen - not, as is normally the case, to the Nato ambassadors working on the basis of consensus.

Having fewer headquarters will concentrate command expertise and professionalism. The UK's experience is that a single permanent joint HQ for all operations (the PJHQ at Northwood) yields rich dividends in strengthened planning and command skills and general operational mindedness.


Few outside the Nato organisation know much about the Nato agencies. Many were established simply as a convenient way of managing a multinational procurement project.

The problem with these agencies is that they overlap, duplicate each other's activities, and fail to provide proper oversight of Nato's procurement programme. For example, within the air defence domain, different agencies manage different projects to provide command and control systems.

Nato leaders have now agreed that the 14 agencies should be merged into three new bodies, one for procurement, one for support and one for communications and information systems.

Precisely which activities will be gathered where, and which sites will be closed, will be decided by June 2011.

The expected saving in running costs is 20%. The expected savings as a result of performance improvements are even greater. Again, vested interests will be at stake as the details are finalised, since the agencies support high-quality jobs.

More savings

As Secretary-General Anders Fogh Rasmussen has said, reforming Nato is not an event, it is a process. Alongside the changes to the command structure and the agencies, other changes are also afoot.

Intelligence support is being reformed; staff requirements are being reviewed to find efficiency savings; improved financial management is to be introduced; an end-to-end rationalisation review of capability planning structures will be undertaken; and a review of head office structures will precede the planned move into a new building in Brussels in 2015.

Committees are also being scrutinised and reduced. Overall, the objective is to make Nato more effective, more efficient and more engaged.

Watch out for haggling as the details are worked out. But the reform path has been laid and the nations will insist it is followed.

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