Published on 20 Oct 2010

A revolving door that knows few bounds

I ran into a seasoned Defence Analyst last night. He told me two completely shocking things. Firstly that when it comes to military procurement, Israel spends £9 billion a year and administers its purchases with 400 people. Britain spends £10 billion annually on procurement and has a staff of 23,700 to do it.

The Secretary of State for Defence is getting rid of 25,000 jobs at the MOD. But when I pressed him last night on Channel 4 News, there was no clear sense that the vast majority of those redundancies will be in procurement. Indeed my analyst told me that the main MOD headquarters will bear the brunt.

There are only three seriously big UK defence contractors and they have had successive governments by the short and curlies. The notorious revolving door from the MOD and the services into the Defence industries continues to revolve despite efforts to tighten it up.

The second thing my analyst told me was that for all significant procurement contracts no fewer that 66 different civil servants, generals, and the rest have to apply their signatures. Recently, he added, that number has gone up to 83.

Finally I continued to press the Government to reveal precisely who was responsible for the contract to buy two ‘inappropriate’ aircraft carriers. Carriers that could not facilitate planes belonging to our closest allies and whose own planes would arrive more than five years after the boats were commissioned. There’s a curious reluctance to find out, let alone tell us whose fingerprints are on the documents.

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53 reader comments

  1. GS says:

    I’m sure I read somewhere that the Foreign Office is bigger now than in the days of the British Empire?

    What worries me most about the cuts (at the BBC for example) is that managers and executives will protect their own jobs and get rid of the front line staff who do the most important work.

    1. martin says:

      Wht dont we bring back national service to get the unwanting to work, benifit claimers back into work,,?..

  2. adz says:

    When it comes down to defence contracts and a great example being “the carriers with no planes”, it’s like any other contract. You sign on the dotted line and then have to adhere to the small print, which in this case seems to be two seriously expensive and needless war machines.
    These so called men, who sit in the house of commons, just didn’t get enough soldier playing when they were young did they? They just love playing with other peoples lives, whether it be axing jobs or sending kids to kill other humans.
    adzmundo The Venus Project

  3. Saltaire Sam says:

    Keep pushing, Jon. If it were as simple as just the last labour government, the tories would be naming names. The fact that Laim Fox became very coy, usggests the main culprits are still in place and still very influential.

    1. Meg Howarth says:

      Agree with Sam.

      Welcome back, by the way Been away myself for a few weeks so I may be behind the times but just posted on Krish’s yesterday’s blog (tax cheating and property).

    2. anniexf says:

      Saltaire, I love your typo – LAIM is so right! His performance last night, wriggling & evasive, made it obvious there was a lot he’d prefer not to reveal.

    3. Saltaire Sam says:

      Annie, just wish I could say I’d thought of it – but you’re right it is just a typo. However I’m going to stick with it along with Bliar

  4. the-Richard-of-Nottingham says:

    That’s the stuff Jon !! That’s where you need to be digging. Governments come and go but the civil service persists, and they don’t seem to be evolving. The difference between how other goverments operate and procure stuff, and how ours operate is stark. Our civil service – especially the MOD – needs a complete overhaul. It is way, way over staffed for this modern age
    (2 5 0 0 0 admin staff !! FFS).

    I can’t understand why ministers always seem to have some sort of misguided loyalty when it comes to defending their civil service staff, even when they’ve barely known them a few months. At least Jon Reid had the guts to say that the Home office “…isn’t fit for purpose”.

  5. Paul Begley says:

    “The second thing my analyst told me was that for all significant procurement contracts no fewer that 66 different civil servants, generals, and the rest have to apply their signatures. Recently, he added, that number has gone up to 83.”

    Just one indication that a major (and seldom considered, let alone quantified) component in public sector “waste” is overly stringent financial control systems. We’re told they’re essential, yet no one can tell us how much they cost.

  6. Kate says:

    Every time a cabinet member is interviewed I grow increasingly annoyed with myself.
    Annoyed that STILL – despite the advanced years – I find the ease with which he/she is prepared to go back on what was previously (pre-election)promised breathtaking.

  7. Mudplugger says:

    The real surprise is that the Israelis need a whole 400 staff to write out a simple order saying,
    “Dear US President , please send us all the military stuff we need to sort out these troublesome locals. Usual payment terms apply – we’ll tell our contacts to vote for you again. Copy this order to British Prime Minister as usual. Lots of love, Israeli Prime Minister xxx”
    Strikes me that 399 of them must have been trained in job creation by our own MoD.

  8. Old Slaughter says:

    Nice. this is news in 2010?

    For a decade or so our armed forces have been being screwed by the Government. The MOD has been a shocking disgrace and this was clear to anybody who asked anybody involved. Where were the press then, how messed up do things have for the media to show this more interest than Wayne Rooney or Jade Goody.

  9. margaret brandreth- jones says:

    To my reading there are quite a few contradictions here.

    Firstly the comparison you make with Israels military procurement being administered by 400 people and Britains procurement just a billion more PA, but paying for 27, 000 staff to administer suggests that either the staff are well paid, the weapons are very expensive or the money disappears down a black hole.

    The government certainly seem to be sticking to their plans of cutting down on the beaurocracy.

    Lets hope all those signatures are valid!

    1. margaret brandreth-jones says:

      Didn’t finish this, had to continue working…neh mind , a load of cods anyway,,,, BUT someone said that Israel gets its weapons free from America..SO if that was true the 400 people in Israels defence administration would get all that lolly between them for their costs. NAH don’t think so.

  10. Oily M says:

    Did anyone else find the statements re maintaining our ability to project the UKs influence / power overseas with the 2 new carriers? By reducing the number of ships in the surface fleet, relatively more boats will be providing carrier escort requiring boats to be pulled in from other areas. Additionally i am extremely concerned about the closing down of the Nimrod fleet. Speaking as both a keen sailor. and oil and gas worker, who provided onsite coordination of any incident? Nimrod? Removal of this aircraft from service will leave the seafaring community further exposed.

    1. adrian clarke says:

      As a keen sailor Oily , you should know that they are ships.Ships that carry small boats . or boats in the RN also relates to submarines.As for the nimrod fleet it is outdated ,having been a converted “comet” of the sixties.However having to rely on a foreign power like the US fills me with dread as they did not support us over the Falklands and without the Nimrods , we would probably have lost more ships.
      The fact that two carriers were ordered by the previous government , it is no use trying to blame the current government when they say to cancel them would cost more than going ahead.Just a little more proof that wherever Labour poked its fingers,an almighty financial mess ensued.

    2. Barry says:

      Adrian,

      The US and France assisted us in the Falklands war behind the scenes – the US going so far as to provide Sidewinder missiles which we stuck on Nimrods amongst other things.

      The Mk4 Nimrod should have been fully new rather than new wings and engines bodged onto old fuselages – the design of the aircraft is sound. The roles it could do are substantial. The potential for it was always enormous and largely unrealised. They should have been in service years ago but nobody in Government or Parliament seemed at all interested in getting it done.

      I was appalled to see that Arbuthnot man squeaking in the Commons over the Defence report – he and his colleagues in Government before Labour committed plenty of mistakes and Labour’s biggest defence error was probably having no ideas of their own and leaving everything to fester for a dozen years.

      Arbuthnot and his ilk sitting on the Defence committee helped perpetuate the irrational atmosphere that has pervaded military decisions for decades. Shamefully, the Top Brass are as content with scaling down national capabilities and tending towards EU integration as any of our elected representatives

    3. Mudplugger says:

      Barry – so France was actually helping us by selling all those Exocet missiles to the Argies ? That explains a lot.

      Good job they weren’t helping us in 1939-45 !

  11. Citizen Smith says:

    Jon
    i have been in the procurement (& outsourcing) business for many years (private and public).

    Sir Philip Green is bang on the money.

    Procurement/outsourcing in the public sector is driven by EU rules – very bureaucratic, time consuming, weighed down by too many people most of whom are ‘tourists’ who dont contribute.

    The main problem with project related contracts is they dont have contractual commitments to time / cost / quality, and there is poor governance to manage the contract after signature… i.e. no decent Service Managers and no way of incentivising / penalising suppliers to meet the commitments.

    The main problem with service contracts is that the public body does not use its purchasing power and also signs contracts without clear contractual commitment to specific levels of service, and again there is poor governance to manage the contract after signature.

    Solution –
    Get private sector help and:-
    – streamline the processes
    – appoint qualified people to mge procurement & negotiate robust project related and service contracts
    – appoint qualified people to mge project delivery and services according to the signed contracts.

    Value for Money!

    1. Paul Begley says:

      “Sir Philip Green is bang on the money.”

      From personal experience, I disagree entirely. In a small government department in the early 1990’s, we were subjected to the type of centralised financial control and purchasing contracts he recommends. In terms of the “sticker price” paid for items, it saved about 10% of the equipment budget. In terms of overall efficiency, it probably doubled the cost of the work we did, as capital equipment and people were endlessly left unable to carry out the work they were supposed to do, while waiting weeks for minor purchases to be approved through the finance department.

  12. Haggar says:

    We hired a defence industry ‘Purchasing Project Manager’ once on a very good salary, once we threw them into the real world it transpired that all she knew how to do was take a couple of drawings and walk around a building getting signatures.

  13. subversivesue says:
    1. adrian clarke says:

      slater sam at it again

  14. climateguardian says:

    It is the same everywhere you look , jobs for the boys! more jobs less unemployment, if the state had its way we all would be working for it, and nobody in the real world , except in China , India, and the sweatshops everywhere else.
    We need to value our resources so much more , whether they are natural resources, labour and energy. it is the private sector that really make the world go round and generates real wealth so where is the incentives for small independent businesses and individuals, nowhere to be seen except more for the global and national conglomerates!

    1. sandy says:

      we dont all work for the state – we already all work for the commercial banks – see The Secret of Oz to find out how commercial banks control the world economy and the lengths they will go to to obtain (historically) and maintain that control – even threatening elected governments with recessions if they do not do as instructed by the banks.

  15. Saltaire Sam says:

    I am so angry I could soon burst a blood vessel and cost the NHS even more!

    To watch the smug, self-satisfied faces of Cameron, Clegg and Osborne as they announced half a million job losses made me want to puke.

    These are men who have never had worry where their next meal was coming from or think twice about whether they could afford something their children wanted.

    They are also men who have enjoyed free university education and manage to buy second properties on expenses and will enjoy enormous pensions paid for by the state.

    Ordinary people are just statistics to them. Let them go and live on a council estate on basic benefits for a year and we’ll see just how eager they would be to slash benefits.

    1. Kate says:

      Well I hope Jon is going to have Osborne in the studio and put to him in what way are we “all in this together”? How will the lives of the cabinet’s 18? 21? millionaires be affected by the cuts. Which will lose his/her job/home etc., etc.?

      Give him a roasting, Jon!

    2. adrian clarke says:

      calm down Sam , we do not want to lose you again.Where i agree with you , it is going to be awful losing all those jobs , i still do not understand how you would pay for them ??
      Do you believe the state has unlimited funds??Do you believe that the state needs many of the bodies it employs??
      I have no feelings towards millionaires , except to believe they should pay fair taxes on their incomes and if they evade tax , should be made to pay that evasion to the treasury.I also believe the bankers should be closely controlled , and the two banks we own, turned into mutual banks run by the bank of england
      Kate i do not see the significance of your comments re the cabinet millionaires.Not one MP in any party is in danger of losing their jobs,or homes for at least another 5 years.They were all elected by us the electorate to run the country in a successful way.I would sooner someone who has been part of a successful business rather than a trade union rep or professional politician who has never worked being in charge of the country.One had only to listen to Alan Johnson today to realise why Labour got us in the mess they did

    3. Saltaire Sam says:

      No, Adrian, I don’t think the country has unlimited funds. I’m even willing to agree that the deficit needs to be reduced. And I realise that is going to cost some people their jobs.

      But!

      It is madness to cut so hard that we are about to lose front line police and firemen. It is madness to be cutting jobs when there is no sign that the private sector is ready or willing to provide new jobs.

      The private sector keeps telling us they have made savings by which they mean cutting jobs and we are told that 500,000 private jobs are set to go as a result of public sector cuts. More dole, less tax.

      The solution is to to increase the percentage of the burden shouldered by tax.

      Even in their increased tax the tories have been unfair by loading it on to VAT, a regressive tax.

      On a day when a woman who inherited £100m wins a case over her ex-husband who thinks £1m plus two houses and a car is too little to live on, it is hard to believe there is not a lot more tax out there to be had

    4. low resolution fox says:

      A long time ago we abolished slavery in this country.

      Welfare is slavery, a person who works pays for another person who doesn’t.

      A person who starts off in poverty but starts earning £50k a year as a Labour MP should be kicked out of their council flat. A token example, but one that is true. A single mother has 3 kids, when those kids leave she is still entitled to keep the 4bedroom house, and even hand it onto the kids. Why?

      The wealthy do not want benefits because they understand they pay for them (after 60% is wasted on admin).

      The tories haven’t even been evil – most of this will happen due to natural wastage as 5-10% of staff leave and won’t get replaced.

      I champion welfare where it is appropriate – but to say it was nice to live under Labour is to suggest it’s nice living on a credit card until you have to pay the loan back.

    5. Kate says:

      ” Kate i do not see the significance of your comments re the cabinet millionaires.Not one MP in any party is in danger of losing their jobs,or homes for at least another 5 years.”

      Well that, Adrian, IS the “significance”! Life for the megarich goes on as before.

      So how are we “all in this together?” It is an arrogance and a conceit of George Osborne to maintain thus.
      Btw – look who was wheeled out to justify the cuts – Danny Alexander, a LibDem…nipping from Ch4News to the BBC studios for Newsnight.No sign of George Osborne, or any Tory, of course, but then why should he/they when he has the likes of Alexander and
      Vince Cable to take the flak.

    6. dbarry says:

      Exactly – if only we had more losers in Government.

      BTW – where was Brown yesterday?

    7. adrian clarke says:

      Kate , of course life for the mega rich goes on as before , but the point is they are all the same over 600 of them , it is not just millionaires in government or opposition.Of course Danny Alexander is wheeled out to justify treasury matters that is his job .You never used to see Gordon , it fell to Yvette Cooper or Laim Byrne.
      Of course we are all in it together, it is just some are deeper and drowning.If this fails then we are in real trouble

  16. Philip Edwards says:

    Somebody mentioned Philip Green earlier and his comments about procurement processes at the MoD.

    Anybody who saw the Antony Barnett programme on off shore tax dodgers the other night will know we should take Mr. Green with a very large pinch of salt, at least until he and his wife pay all taxes as de fato British residents.

    Come to think of it, Barnett is no paragon of virtue either. On the Open Democracy (try not to stifle laughter) website he was one of those who urged people to vote LibDem so we got a coaliton government.

    Well, we’ve got one now…….So thanks for your “democratic” efforts, Antony, but I think I’ll sprinkle salt on your tail too before I give you the benefit of the doubt again.

    1. Meg Howarth says:

      There are two Anthony Barnett’s, Philip, and I think you’ll find the Open Democracy one is not the same as C4’s Dispatches’ investigative journalist. Open Democracy’s Barnett was one of the founders of Charter 88.

      Agree with you about Green – posted re same on Krishnan’s yesterday’s blog this morning.

    2. Phillip Edwards says:

      Meg, Thank you for the correction.

      Of course I apologise unreservedly to Mr. Barnett of Channel 4. I got it wrong.

      However, the comments on Mr. Barnett of Open Democracy still stand.

  17. Michael Palmer says:

    Keep pushing Jon. Embarass Cameron and Osborne into admitting they need to make further meaningful cuts.
    It’s blxxdy rediculous to employ 24000 people doing the work of 400.
    Also, bearing in mind the scale of the finances involved, as well as the impact on National Security, it borders on public deception to not identify who was/is responsibility for the Carrier fiasco. They should be named.

  18. Peter Smith says:

    Jon
    Some good stuff, and I don’t claim MOD procurement is perfect of course, but it is nonsense to say that there are 23000 procurement staff in MOD.
    That is more than the entire staff of Defence Equipment and Support which (and you only have to go onto their website to find this, it is not exactly investigative journalism)”DE&S acquires and supports equipment and services, including ships, aircraft, vehicles and weapons, information systems and satellite communications. As well as continuing to supply general requirements, food, clothing, medical and temporary accommodation, DE&S is also responsible for HM Naval Bases, the joint support chain and British Forces Post Office.”
    An awful lot more than ‘procurement’.

  19. Saltaire Sam says:

    Interesting to watch George Osborne leave his luxury London home and get into his chauffeur driven car (paid for by the tax payer) to go to work this morning and then climb back into the limo to make the 200 yard journey from Downing St to Parliament.

    Then there’s the Lords who will pocket £300 a day (provided by the tax payer), no questions asked, just for turning up.

    We are all in this together

  20. Indigo says:

    “Israel spends £9 billion a year and administers its purchases with 400 people. Britain spends £10 billion annually on procurement and has a staff of 23,700 to do it.”

    Oh, come on, don’t be so simplistic. Israel gets its armaments from the USA, including the latest that are still being trialled. I am sure that when you are GIVEN your weapons, it requires fewer people to “administer” them than if you had to go through all the tendering work etc yourself.

  21. Mark says:

    Anyone that has ever had dealings with the government knows the bureaucracy and idiotic hoops they set up for tendering companies to jump through. I’ve long been convinced that the motivation for this is twofold:

    (1) to transfer responsibility and the civil servants’ accountability by drowning procurement in rounds and rounds of idiotic admin and

    (2) to make jobs for the boys and girls.

    I once sat in a meeting with civil servants working in the monolithic bureaucracy known as the Office of the Deputy Prime Minister. I can’t say why because I had to sgn the official secrets act, but the experience was amazing.

    The deal we ended up offering was incredibly bad value. Why? Because the govt wanted a completely bespoke product but they wanted to be able to walk away from it with little notice. So, the penalties were huge! To my knowledge they haven’t walked away yet, so we have probably been shafted as tax payers on a deal that could have been much cheaper…

    And here’s a statistic for you. As tenderer, we were designing, evaluating and presenting the project. There were three of us at the first meeting – the ODPM personnel exceeded 12! Just to listen to our presentation!

  22. Saltaire Sam says:

    If the treasury got its sums wrong on child benefit to the tune of 150 per cent, how can we trust any of their figures?

  23. adrian clarke says:

    Sam, you old Socialist,i didn’t notice you commenting on Labour ministers doing exactly the same when in government.Nor any comments on their spending millions on office chairs,paintings and fine wine.I didn’t realise you had double standards.
    Even Jon was at it tonight when he likened himself to the poor , not the rich.Wonders will never cease!!!!!!

    1. Saltaire Sam says:

      I’m against excess from all politicians and often commented pre-blog on the irony of working class John Prescott in his free luxury Admiralty Arch apartment.

      Their salaries, perks, redundancy payments and pensions are why politicians quickly lose touch with what it is like to live on an ordinary wage.

      But the current bunch of multi millionaires and tax dodgers, as demonstrated by Dispatches, take the biscuit because they claim to care about the poorest but introduce cuts that C4News showed conclusively will hit hardest those on lowest incomes. I just hope the limos have good air conditioning to soak up the crocodile tears.

      You and the government can try to pin all this on the previous government – and they should shoulder their share of the blame – but the public are not fools. They can spot humbug from many miles and the idealogical axing of the state we saw today, the moving of the blame to local councils while also hitting them hard, and the smug smiles on Cameron and Osborne’s faces will come back to haunt them.

    2. Philip Edwards says:

      Adrian, To equate New Labour with Socialism is so absurd it should need no emphasis.

      Quite rightly (pun intended) the Tories for years accused New Labour of copying their policies and even extending them.

      You can’t have it both ways.

      There are still many in the Labour Party who loathed what Kinnock and Blair did to it, who have not forgotten the moral imperative of its roots. It is thanks to these individuals the party has retained a remnant of its conscience and raison d’etre.

      We have now had thirty years of extreme right wing authoritarian politics in this country and it has steadily eroded our freedom and social cohesion. The results are all around you. Now we are once again to witness disgusting, cowardly attacks on the living standards of our most vulnerable citizens.

      But soon there will be no place to hide. The Establishment are running out of excuses for their rip-off, though I wouldn’t put it past them to find another war somewhere to send our young men and women off to die in yet another rich man’s war, poor man’s fight.

      Enough is enough.

    3. Jim Flavin says:

      Re Philip Edwards comment – dead on the money .

    4. adrian clarke says:

      Philip you must live in a parallel universe.If you believe Labour (new or old) are anything like the Tories or followed Tory policy.In 1979 Labour took over a thriving economy,and for two years kept to Tory spending plans.After that they returned to type
      Spending out of the window,great expansion of the public sector.Great influx of immigrants to create a multicultural society.Spending on schools and the NHS without any controls or idea where the money was going.
      Living beyond their means on the belief the banking system would continue to pay for their extravigance.Certainly not Tory policy
      As for 30 years of right wing authoritatianism , you make me laugh.We had 30 years of freedom to run our own lives.It has taken just 13 to replace it with a big brother society(socialist ideals) where aour lives are controlled from birth to the grave.Spying in dustbins, on street corners,controlling the very words and views we expound.Keep your Socialism!!!!

  24. P.A.B says:

    There is a story to be told about the Nimrods and the decades of delays in the updating – and the important job they do. As for the fast jets, when was the last dogfight? Battle of Britain? There must be surely a story to be told about the aircraft carriers – if they are like everything else handled by the MOD then the original commissioning may go back a long, long way. Factcheck should be on the job as I write.

    As for the shameful treatment of child benefit, the trouble for the Tories and the Lib Dems is only just beginning. A friend’s family will lose benefit for four children and, apart from the unfairness compared to the families with two earners on £40k each, who keep child benefits, they are baffled how the Govt claims to be family friendly when it treats families where the mother stays at home to care for children so badly. The fact that the estimate of how much is being taken away from families is now not £1b but £2.5b simply illustrates it was conceived by Cameron and Osborne over a glass of Ch. Petrus the night before the speech.

    Incidentally, the Ch.4 News round table discussion is a brilliant concept, enabling us to see the arguments and details in the round.

    1. bdbcks says:

      re: round table discussion, subconsciously underlining the notion of “we’re all in it together”?

      other than that it is interesting to see usually singular seen journalists mechanizing as a unit. perhaps this format could be extended to interviewing politicians aka giving them the all directions proper cerebral kicking they deserve.

  25. Jim Flavin says:

    Some amazing stuff here . Its as if the Dispatches programme last Monday had not happened for some . These millionaires and their grotesque poloicies continue to be defended by people who I think – are far from millionaires . Myabe the chains give a feel of security . That these peopel[ politicins ] are in a position to put people out of work – while they and their friends live it up, pay liittle or no tax – and as usual forget what they put or not put in their manifestos is beyond words – but they have the support of many – far too many . They must – and they may be right – consider the people to be utter fools .

  26. Graham says:

    This goes to show the waste of time and resources within the MOD. If other government departments show a similar level of waste then its not a surprise that our country is so heavily in debt.

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