The MoD’s Defence Equipment and Support organisation (DE & S formerly DESO), employs 16,000 full-time staff and more than 3,400 contractors to handle the three armed services’ £14bn annual spending on new equipment and on maintenance. It oversees Britain’s £163bn 10-year defence budget and most of the government’s largest expenditure projects.
But today, the Times and the FT confidently predict that defence secretary Michael Fallon, speaking at an Institute of Directors dinner in Durham, will reveal many shortcomings, including fraudulent charges that arms companies have levied on the taxpayer for:
- croquet lessons,
- horseracing trips,
- speeding tickets
- and magicians.
And today, the National Audit Office has released a report saying that during attempts by the DE & S to privatise the running of procurement, which were abandoned in December 2013 after a collapse of the bidding process, MoD civil servants had ‘squandered’ £33m on consultancy fees and preparatory work.
Mr Fallon’s proposal:
A Whitehall defence watchdog will be set up, with the power to fine defence companies up to £1m if it discovers abuse of the contracting process. The defence secretary will tell the audience that the MoD will demand “100% transparency”.
FT: “Mr Fallon’s remarks are likely to be greeted coolly by a defence industry that has so far been broadly critical of government reform efforts”.
And sadly, the ‘fat cat’ mentality survives unscathed . . . The FT reported (14.4.14) that the MoD had asked the Treasury for permission to give top staff in the new watchdog inflation-busting pay rises or bonuses when they leave.