Consultants paid £29m in abortive shake-up at MoD

The accountancy firm KPMG and the US construction group Jacobs were among six consultants that shared a £28.9m taxpayer payout to prepare and assess reforms for a single Ministry of Defence agency.

The consultants' bonanza will add to the chorus of criticisms over the Government's attempts to bring greater commercial nous to Bristol-based Defence Equipment & Support, which employs 16,500. The figure is also £11m more than the MoD has previously revealed, though it covers a wider scope of work.

DE&S buys the armed forces' kit, from binoculars to Apache attack helicopters. Ministers believe the agency wastes some of its £15bn budget by not possessing the negotiating skills necessary to drive down suppliers' prices.

The Defence Secretary, Philip Hammond, wanted to in effect privatise DE&S by letting a consortium of big corporates manage it, but that proposal embarrassingly collapsed due to lack of interest.

This was known as a GoCo (Government-owned, contractor-operated). The plan angered unions and defence experts as the model had never before been imposed on something so sensitive to national security.

Instead, the agency is going to be given certain freedoms from strict Civil Service codes. For example, DE&S will be able to break the rigid pay structure of the Civil Service to attract expert staff in areas like aerospace engineering, while companies have been invited to run IT systems and human resources.

These more limited reforms, branded as DE&S-Plus, will start to take effect from April before the new entity is formally launched next year.

But to reach even this stage the Government spent nearly £1m a month on half-a-dozen consultants examining and assessing GoCo, DE&S-Plus, and other potential reforms between 2011 and 2013. A parliamentary answer to a question from the shadow Armed Forces minister, Kevan Jones, revealed that the other consultants were LEK, Booz, CVA and HSF, though KPMG pocketed the most with £8.3m.

Mr Jones said: "The cost of this fiasco just keeps growing and it's clear the Government's incompetence and mismanagement is wasting millions of pounds of taxpayers' money... it seems the Defence Secretary just can't get his sums right."

Yesterday the head of DE&S-Plus, the MoD official Bernard Gray, faced the Commons Defence Select Committee to explain how the agency will now work. The Conservative MP James Gray warned that DE&S-Plus was "incredibly Byzantine, Schleswig-Holstein incomprehensible".

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
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

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee