Mark Leftly: Audacious they may be, but defence reforms look a complete mess

Outlook Bernard Gray is a yo-yo dieter, but when it comes to philosophical conviction he is as steadfast as the sturdiest dreadnought. Mind you, plenty of those super-battleships were sunk by undetected mines and enemies.

The former Financial Times hack holds the grand title of chief of defence materiel at the Ministry of Defence (MoD).

Mr Gray is the brain behind arguably the most dramatic set of reforms of any defence department ever seen anywhere around the world: a pair of ultra-ambitious quasi-privatisations so revolutionary they have spooked even our tough transatlantic partners who run the Pentagon.

However, the Defence Secretary, Philip Hammond, agrees with Mr Gray that Defence Equipment & Support (DE&S), the £14bn budget agency that buys the army's tanks and the navy's aircraft carriers, would be better run by the private sector. Only with that commercial nous could Bristol-based DE&S buy more things that go "bang" for its buck.

He also concurs that the Defence Infrastructure Organisation (DIO), which looks after the MoD's estate from airfields to training bases, should be handed over to companies which can make the best use of these facilities for the armed forces.

This is a breath-taking programme that earns top marks for both audacity and originality and gains bonus points for being a financially meaningful commitment to cutting the eye-watering cost of government.

Others argue it is folly to in effect privatise national security. And the unions are waking up to the fact that DE&S reform will mean thousands of job cuts, badly hurting the South-west economy.

We have previously reported that there is also potential for extreme conflicts of interest. For example, many of the companies involved could end up handing out DE&S contracts worth hundreds of millions to defence firms that are their major clients in other parts of their business. (I should declare my own conflict, of a sort, which is that I worked for the publisher that Mr Gray ran years ago, albeit he was on the top rung of a managerial ladder that I didn't even have a foot on.)

What happened this week was that one of the three consortiums bidding to oversee DE&S pulled out of the process, leaving just two teams. One of these groupings includes Serco, the FTSE 100 giant which is at the centre of the scandal that allegedly saw the taxpayer charged £50m to monitor non-existent electronic tags allocated to the dead and those who were back in custody; the other is led by Bechtel, the US engineer which is helping to dig the 21km tunnel under London that will be the centrepiece of Crossrail.

What is problematic is that these two firms are working together on a bid for DIO and are widely thought to be hot favourites. Should they win and Mr Hammond pursues his preferred plan for DE&S, that would mean one of Serco or Bechtel would be responsible for both agencies and more than half of the MoD's entire budget.

Even if the reality turned out to be that this is not a problem in practice, at the bare minimum the idea that a company – and in Serco's case, a company with a very chequered recent past – has that much control over national defence is distinctly unpalatable. Any decision that the company made would also be open to accusations of laziness through power or bias towards certain defence contractors, whether there was any truth in those claims or not.

There is another option for Mr Hammond, which is to just modify DE&S in what has been called DE&S-Plus. No one seems to know what this would actually entail and this seemingly minor change to the costly status quo is certainly not the defence secretary's preferred choice.

However, unless the bid teams are hastily swapped around or a party withdraws from one of the consortiums, it seems unfeasible that the MoD will be able to pursue DE&S reform should Serco and Bechtel indeed win the right to look after the department's estate. The only alternative would be to in effect exclude the pair from the DIO contract – and it is surely not in the best interests of the department to weaken the competitive process, let alone blank what is said to be an excellent bid.

In other words, defence reforms might be a good idea in theory, but in practice they look like a complete mess.

PROMOTED VIDEO
Arts and Entertainment
Jamie Dornan stars as Christian Grey in the Fifty Shades of Grey movie
filmFirst look at Jamie Dornan in Fifty Shades of Grey trailor
Sport
Shinji Kagawa and Reece James celebrate after the latter scores in Manchester United's 7-0 victory over LA Galaxy
football
Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Sport
Farah returns to the track with something to prove
Commonwealth games
Life and Style
fashion Designs are part of feminist art project by a British student
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
Top guns: Cole advised the makers of Second World War film Fury, starring Brad Pitt
filmLt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a uniform
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
Arts and Entertainment
A scene from Shakespeare in Love at the Noel Coward Theatre
theatreReview: Shakespeare in Love has moments of sheer stage poetry mixed with effervescent fun
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Transition Manager - Stirling - Banking - £400

£400 - £420 per day: Orgtel: IT Transition Manager - Banking - Scotland - £400...

Test Lead - Financial Reporting - Banking - London

£350 - £400 per day: Orgtel: Test Lead, London, Banking, Financial Reporting, ...

Business Analyst, Retail Bank, £375-400p/d

£375 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Farewell, my lovely

Should emergency hospital weddings be made easier?
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

Will The Minerva Project change the face of higher learning?

The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Commonwealth Games 2014: Great Scots! Planes and pipers welcome in Glasgow's Games

Commonwealth Games 2014

Great Scots! Planes and pipers welcome in Glasgow's Games
Jack Pitt-Brooke: Manchester City and Patrick Vieira make the right stand on racism

Jack Pitt-Brooke

Manchester City and Patrick Vieira make the right stand on racism
How Terry Newton tragedy made iron men seek help to tackle their psychological demons

How Newton tragedy made iron men seek help to tackle their psychological demons

Over a hundred rugby league players have contacted clinic to deal with mental challenges of game