Defence boss Rhys Jones says he has big regrets about the way staff were told they were for the chop.
A critical report by Auditor-General Lyn Provost slates the handling of Defence Force redundancies and says the effect on morale sparked an exodus of staff, affecting defence capabilities.
Ms Provost criticised the force on several fronts, including overstating the savings from its planned 1400 redundancies. She was also critical of the speed and manner in which those redundancies were carried out in 2010 and 2011.
Lieutenant-General Jones acknowledged yesterday that letters sent to defence staff to be made redundant had been hurtful.
The letters followed a review of 2400 military personnel records, which resulted in scores being assigned to individual staff to decide which ones should be discharged.
Ms Provost quoted an internal Defence Force document, which revealed that horrified military bosses tried to tone down the letters, but were told they could not.
General Jones said the force was acting on legal advice over the wording of the letters, but if he could do it over again, he would handle it differently.
Ms Provost blamed the process for a drop in morale and increase in staff attrition, which soared to an exodus of one in five staff at its peak.
There was also significant concern about the ability of the armed forces to carry out their work.
"An example of the effect on outputs is the decrease in sea days available for inshore patrol vessels," Ms Provost wrote.
General Jones admitted the Defence Force was now considering downsizing its naval fleet.
It will raise fresh questions about the military procurement process, which has faced severe criticism over purchases such as light armoured vehicles, many of which ended up in storage.
The Government insists the $350 million to $400m in savings had freed up money for the front line.
But Ms Provost said that had not yet eventuated.
- © Fairfax NZ News
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