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Lord Levene, a former Chief of Defence Procurement and now Chairman of Lloyd's of London, this week chaired the inaugural meeting of the steering group overseeing the Defence Reform Review.

Defence Secretary Dr Liam Fox launched the Defence Reform Unit on 13 August 2010 to conduct a fundamental examination of how the Ministry of Defence is structured and managed. His vision is of a leaner and less centralised Department that is built around Policy and Strategy, the Armed Forces, and Procurement and Estates.

Defence Reform is the third of Dr Fox's key priorities, alongside Afghanistan and the Strategic Defence and Security Review (SDSR).

Gerry Grimstone - currently Chairman of Standard Life and Candover Investments plc, who recently completed an independent review of civilians in Defence - has joined the steering group since the announcement last month. The other members of the steering group are:

• Lord Levene
• Ursula Brennan (Second Permanent Under Secretary)
• General Sir Nicholas Houghton (Vice Chief of the Defence Staff)
• Baroness Sheila Noakes
• George Iacobescu (Chief Executive of the Canary Wharf Group)
• Raymond McKeeve (a partner at law firm Berwin Leighton Paisner)
• Björn Conway (Head of Aerospace, Defence, Security and Resilience at Ernst & Young)
• Dr David Allen (a Non-Executive Director at the MOD)

Dr Fox also attended part of yesterday's meeting. He emphasised that he was looking to the unit to identify ways of making the MOD a more effective organisation, as well as looking at how the Department can make significant savings in running costs.

The group had a wide-ranging discussion about the way the Department works at present and the approach they should take to Defence Reform - this included looking at the scope of the review and the timelines for their work. Lord Levene explained that he wanted the group to take a 'blank sheet of paper' approach, and have an open mind about the future shape of the MOD. The group agreed that they should aim to conclude their work by the end of July next year, but with the potential for reforms to be implemented on a rolling basis as the review takes place.

The full steering group will meet again next month. In the meantime, the group will break into three teams, each of which will look in more detail at key areas of Departmental activity.

The detailed work in support of the review will be undertaken by a civilian/military team within the MOD, led by two Senior Civil Servants, Dominic Wilson and Graeme Biggar. Terms of reference for the Defence Reform Review are currently being finalised. The team will consult widely - including with the Trade Unions - and provide regular updates to staff as the review progresses.

The SDSR will outline how policy will be aligned with resources to ensure the Armed Forces are prepared for the challenges of the future. The Defence Reform Unit's work will take account of the outcomes of the Government's Spending Review and the SDSR, and it will take forward those elements of the SDSR relating to Defence organisation and management.

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