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Last Updated: Tuesday, 29 January 2008, 19:25 GMT
Growing pangs of Britain's spy agencies
By Gordon Corera
BBC Security Correspondent

MI6 headquarters
MI6 has been shrouded in secrecy for most of its history

The annual Intelligence and Security Committee report provides one of the few glimpses into the normally secret world of Britain's intelligence agencies.

The insights it provides are a mix of the serious, the strange and the more mundane.

Britain's intelligence and security services have been growing fast since 9/11 but that process has not always been straightforward.

According to the report, the growth has created concerns "that aspects of key intelligence and security work are suffering as a consequence of the focus on counter-terrorism priorities" and the committee calls for possible separate, additional funding to maintain capabilities in other areas.

MI5 has expanded fast, particularly into the regions.

New offices were opened in the South East and Wales in 2006/7 - and by 2008, regional stations will house three times the number of staff originally planned, the report reveals.

One of the biggest challenges has been maintaining standards and corporate culture at a time of such speedy growth.

International terrorism

In some areas, MI5 has moved to use more consultants on IT and project management to cope.

The Secret Intelligence Service (SIS) - or, to use its more popular name, MI6 - grew at a rate of 3.6% in the last year compared to nearly 30% for MI5, but it has still been undergoing significant changes.

It reprioritised its resources after the London bombings in July 2005 to provide a greater focus on the international dimension of terrorism.

This has led to a reduction of work in some fields, the closure of two foreign stations and the transfer of serious organised crime work to the new Serious Organised Crime Agency (Soca), as well as the "suspension of operations directly related to economic wellbeing", as the report puts it.

In its broadest definition, counter-terrorism now takes up 56% of MI6's work and that figure is rising.

A specialist operational team had been created within MI6 to look at the interface between al-Qaeda and radicalised British Muslims and try and 'catch the connection' between the domestic and overseas aspect of the threat.

'Disruption operations'

MI6's greater focus on counter-terrorism has also led to a significant increase in the number of direct "disruption operations" against terrorist targets, the report says.

This is where MI6 has produced information which has frustrated terrorist activity at home or abroad.

The total number of these operations has increased by almost 50% compared with the previous year, and the number of these operations judged to have caused "significant disruption" to the terrorist targets has almost doubled.

Sir John Scarlett, chief of MI6, expressed his concerns over what growth might mean.

He said: "Any growth carries risk…at the end of, let's say [the next] five year period, a substantial proportion of the Service's staff will be quite inexperienced…and there will be a disconnect between that inexperience and then the ability of the more experienced part of the Service to manage that and to control it and to direct it.

We were managing to support most of security service's highest priority operations, but we were not achieving the quality of support that we and they had agreed we should aim for

GCHQ official

"And obviously a service like ours cannot afford to flip-flop around with weak management, particularly middle management, which is where the risk is likely to be most intense."

The committee also looked at the issue of whether the government was justified in saying that there were real national security considerations when it came to halting the Serious Fraud Office's investigation into BAE Systems' dealings with Saudi Arabia.

Sir John told the committee that if Saudi Arabia had carried out a threat to withdraw counter-terrorist co-operation the results would be serious since it was a ‘an absolutely key country', although the government declined to show the committee one note from the prime minister on the subject.

The report gives some sense of some of the bureaucratic controls that surround the spending and work of the intelligence services.

In some cases, it all sounds very much like any other Whitehall department with talk of spending targets and efficiency reviews.

MI6 now even has a dedicated efficiency officer and a contracts management officer.

John Scarlett
John Scarlett has been chief of MI6 since 2004

Last year, Britain's spies actually managed to exceed their efficiency targets, partly by cutting back on travel.

In other cases, the concerns are rather more unusual and specific to the world of intelligence.

For instance there were two cases in which MI6 made errors in paying its agents.

The problem was associated with incomplete "contact reports" which should record, amongst other things, any cash or benefits provided to the Service's agents from public funds.

One issue that is clearly causing some concern amongst the members of MI6, as for many other workers, is the issue of retirement and pensions.

The Civil Service retirement age is due to increase to 65 over the coming years, while MI6 officers have always retired at 55.

Highest priority

MI6 says changing that age would pose problems in terms of overseas deployment of staff and effective intelligence gathering, but the committee said resolving the issue should be a greater priority.

The government's eavesdropping agency, GCHQ, has also been put under pressure with resources increasingly devoted to supporting MI5 operations. Making sure its resources keep pace has not always been easy.

"By the end of the year we had found that we were managing to support most of security service's highest priority operations, but we were not achieving the quality of support that we and they had agreed we should aim for…essentially because we were spreading ourselves too thin," one official from GCHQ told the committee.

The summer floods in the Gloucestershire region also caused real disruption.

If the flooding had continued for very much longer or been more severe, GCHQ's operations could have been even more severely disrupted, according to the report.

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