Hammond reconfirms commitment to defence privatisation

Secretary of State for Defence The Rt Hon Philip Hammond MPSummary: Defence Secretary Philip Hammond has renewed his plans to part-privatise the way the Government procures food and weaponry for the MOD just weeks after the bidding process for the contract was abandoned.

Last month, Mr Hammond announced that the contract to transform Defence Equipment and Support (DE&S) into a Government-owned, contractor-operated enterprise had to be called off due to a lack of competition after one of only two bidders pulled out.

Failed tendering procedure

The failed tendering procedure is rumoured to have cost the Government £17.8m. Despite criticisms that the plan wasted money and would have caused serious privacy concerns regarding the passing of sensitive military information into private ownership, Mr Hammond has now announced new measures to partly renew the privatisation process.

DE&S is now set to receive greater operational freedom and less red tape, including the ability to increase salaries in order to attract highly skilled senior staff.

Procurement of defence equipment

Private contractors will only oversee certain aspects of DE&S instead of the previous plans to have the successful bidder operate all aspects of the procurement of defence equipment, weapons and food.

A spokeswoman for the MOD said: “The new DE&S is an arm’s-length body working within specially agreed freedoms that will allow DE&S to operate differently to the rest of the Civil Service. It is an innovative structure that will bring the change needed to make sure every pound spent on defence provides value for money.”

Mr Hammond has appointed Bernard Gray as the first Chief Executive of DE&S-Plus, the newly revamped agency. DE&S-Plus will have an annual spend budget of £15bn from April.

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