David Blackburn

Gray heralds the latest shake-up

Gray heralds the latest shake-up
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The coalition is taking it to the MoD, Whitehall’s most intransigent department.  The FT’s Alex Barker reports that Bernard Gray has been appointed Chief of Defence Materiel. 

Gray is a revered and original defence specialist with a history of criticising the MoD in plain terms. Resentment persists over his savage report into procurement, which exposed the full extent of the wasteful ‘conspiracy of optimism’ that pervades the department’s operations and its relations with contractors. He argued:

‘Industry and the Armed Forces have a joint vested interest in sponsoring the largest programme at the lowest apparent cost in a ‘conspiracy of optimism’. This ‘conspiracy’ gives rise to an over-large programme, and the deep reluctance to cancel projects means that these pressure are not relieved.

When this over-large and inflating programme meets the hard cash totals that the MOD has been allocated each year, the Department is left with no choice but to slow down its rate of spend on programmes across the board.

The result is that programmes take significantly longer than originally estimated, because the Department cannot afford to build them at the originally planned rate.’

Plenty of officials will take early retirement over being subordinated by this tricky customer, which will ease the task of sacking 25,000 civil servants.

Gray’s immediate priority is to support Peter Luff, the Procurement Minister, in renegotiating contracts made by the previous government. His long-term labour of love is to dispel the conspiracy of optimism and ensure that Britain buys what Britain needs. He will have to chide officials and the service chiefs, something that no government has managed. However, Gray’s reputation and determination are considerable. The numerous personnel changes at the top of the MoD are a clear sign of Cameron and Fox’s intent.