Published:

12 comments

Picture 1 Antonia Cox was Conservative candidate for Islington South and Finsbury at the general election and is author of More Bang for the Buck: how we can get better value from the defence budget, published by the Centre for Policy Studies.

ConHome readers might be wondering what Liam Fox is doing in appointing a former Labour special adviser to the key post of Chief of Defence Materiel. Not only is Bernard Gray a rounded figure who might have difficulty squeezing into a tank, but he is not a general or an admiral. But that is the point. After the now infamous contract for the QEII class aircraft carriers – £4 billion and counting – which would have cost more to cancel than to deliver, the case for greater commercial expertise and experience in defence procurement is clearer than ever.

Mr Gray was a special adviser to one of the more distinguished of Labour's six defence secretaries in thirteen years, Lord Robertson. An ex-journalist, he later headed the private equity-backed buyout of some specialist News International publications. An experienced businessman himself, he has no illusions about the power of the defence industry. Its ability to mobilise constituency interests, and to hire former generals and permanent secretaries, give it formidable clout, even though direct full-time jobs supported by MoD expenditure are less than 0.3% of total UK employment.

That said, Gray seems genuinely determined to do defence procurement better. In the New Year, when the Defence Secretary is focusing on overseas strategic relationships often neglected by Labour, he will have to do much of the heavy lifting for Lord Levene's report, due in the summer, on how procurement processes should be reformed.

Of course buying complex defence systems, with their long lead times, is inherently difficult. But when the National Audit Office compared such projects with the similarly demanding construction of North Sea oil rigs, it found project management there was often much better. The MoD still goes for "exquisite solutions" when civilian and military off-the-shelf technology often offers better value with fewer risks: hence the description of the Army's infamous BOWMAN radio as Better Off With a Map and A Nokia.

The report produced by Gray for Labour's penultimate Defence Secretary, John Hutton, in 2009 correctly characterised the "conspiracy of optimism" in defence procurement as "a process of over-ordering and under-costing which is not constrained by fear on the part of those ordering equipment that the programme will be lost". That is because cancellation is rare, once industry, local political interests and other government departments have been enlisted in support.

In addition to good analysis, Gray made some sound proposals. He said the single service chiefs of materiel should be replaced with a single chief, recruited externally. That wasn't a case of writing his own job description, but a sane response to the problem of competitive aggregation of single service wishlists, without rational trade-offs.

He wanted military personnel without line management expertise to be advisers only, not programme managers. He wanted to reduce the absurd rate of churn in Defence Equipment and Supply by making those in senior positions do a double tour of four years, instead of two. For equipment with high support and maintenance costs, he wanted the "contracting for availability" models that are common in the private sector to be introduced.

Where Gray could hit roadblocks is with his proposals for privatisation. He suggested the Government Owned Contractor Operated model for DE&S – the 23,000 strong organisation partly housed in the vast office complex pictured this week in The Times (£). Alternatives include the use of private sector strategic partners or the spinning out of individual projects. Civil service unions will be up in arms. It is not going to be easy.

But I've always argued that those of us who care about the armed forces – and that is still a surprisingly high proportion of the public, not just Conservative voters – need to know that our troops are getting proper kit. After highly publicised failures, like the inability to protect troops in Iraq and Afghanistan from roadside bombs, we need to see that the Coalition government is doing a better job. Otherwise we will lose faith in Britain's ability to punch above its weight in defence. And if that happens, political support for a significant increase in the defence budget after 2015 will disappear. Gray had better get cracking.

12 comments for: Antonia Cox: Bernard Gray may have previously advised a Labour Defence Secretary, but Liam Fox was right to appoint him as Chief of Defence Materiel

Leave a Reply

You must be logged in to post a comment.