Big role planned for private sector in shake-up of defence procurement

The private sector would play a big role in buying weapons and equipment for the Ministry of Defence under a shake-up planned by ministers.

The MoD has been plagued by a series of scandals over its £14bn a year procurement programme, amid mounting criticism of inefficiency and overspending. Last year, its top 15 projects were £6bn over budget.

Now defence ministers and officials look set to be stripped of responsibility for buying. Bernard Gray, in charge of procurement, will recommend radical reform in a report in the new year. He will tell BBC Radio 4's Today programme on Tuesday: "I'm looking at how I do get a significant skills injection from the outside, because it's difficult to solve this problem one person at a time."

The changes could involve recruiting hundreds of people from the private sector. "Organisations are very conservative, steady places to work where cultural norms persist over long periods of time," he said. "Where do you get those kind of people with those different cultural norms? A variety of private sector organisations could provide those skills and we need to look at how best to integrate them."

Mr Gray said he was looking at ways of forming partnerships with private sector organisations along the lines of the Olympic Delivery Authority and the Atomic Weapons Establishment.

Peter Luff, the Minister for Defence Equipment Support and Technology, will tell the same programme: "We will be as radical as we need to be to achieve the changes we need to improve the performance of the organisation ...the status quo is unlikely to endure."

Three options are under consideration – including an independent body run by outside contractors with power to take purchasing decisions without ministerial approval. It would be accountable to Parliament but run as a semi-private operation. Other options are for contractors to run procurement, under ministerial scrutiny, or a trading fund that would keep the budget within the MoD but allow private sector expertise to be brought in.