IDF, Treasury clash over plan to streamline costs

By YAAKOV KATZ, SHARON WROBEL
The IDF and Treasury were at loggerheads on Sunday over the significance of a cost-saving plan that was approved over the weekend by Chief of General Staff Lt.-Gen. Gabi Ashkenazi and is meant to save the military over NIS 100 million annually. The plan, the IDF announced Sunday, was devised by the IDF Planning Division in conjunction with McKinsey & Company consulting firm, which won a three-year multimillion dollar contract to create a 10-year streamlining plan for the IDF in July 2008. McKinsey is one of the world's leading consulting companies and previously conducted a similar project for the US and British militaries. McKinsey teams recently completed their review of the various IDF branches. The plan approved last Thursday by Ashkenazi pertains mainly to maintenance in the Air Force and Ground Forces Command. The IDF said that under the cost-saving plan formulated by Mckinsey, the military would likely succeed in saving NIS 30 billion over 10 years. The IDF's Technological and Logistics Directorate has already begun implementing a number of McKinsey recommendations and is hoping to save close to NIS 200 million out of its NIS 5.4b. annual budget by the end of the year. During its review of the IAF, for example, McKinsey proposed new methods for procurement and maintenance which could save tens of millions of dollars. In response to the IDF announcement, the Treasury slammed the military for playing "PR games" instead of implementing the multi-year streamlining plan as committed to by the reform of the Brodet Committee two years ago. "In a delay of nearly two years, the Defense Ministry is 'releasing' parts of the plan via press releases, which have not yet even presented to the government," said the Finance Ministry in a response. "Part of the plan, which has been released by the IDF, cannot be described as a part of a streamlining program. Negligible sums are involved, which do not match the target set by the government which spoke of savings of NIS 30b. over 10 years. We regret that the IDF is engaged in public relations instead of instituting a real multi-year streamlining plan." The government adopted the Brodet Report according to which the Defense Ministry was supposed to present a budgetary streamlining plan approved by the Finance Ministry already in November 2007. "Nothing has been presented to the Finance Ministry. This is a joke, a piece of PR nonsense," a Finance Ministry official said. "What has been released now will save only NIS 100 million a year which does not add up to NIS 30b. over 10 years. More streamlining is needed when 60 percent of the defense budget is spent on salaries and pensions."