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

Mark Leftly
Thursday 13 February 2014 01:00
Comments

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".

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in