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According to the Daily Mail, the MOD has spent £180 million of its budget on luxury items for top civil servants and officers, including hotels, car hire and a Sky Sports subscription. The figures obtained by the newspaper show that officials spent £110 million on hotels between 2009 and 2013, including £5,500 for Andrew Manley, the chief executive of the Defence Infrastructure Organisation for nearly 50 nights at a four star spa hotel. The Mail highlights that expenditure on hotel accommodation has increased by £3 million during a period in which the rest of the MOD has faced substantial cuts.
The Daily Telegraph reports that Philip Hammond has “dismayed” Britain’s allies in the Gulf by pulling out of a conference in the Middle East at the last minute to give a statement to the House Commons on defence procurement. The newspaper says that the British defence secretary was invited to take part in a panel at the Manama Dialogue in Bahrain on the future of Syria, where he was expected to talk about regional issues and Britain’s position on relevant security matters.
Diplomats had hoped that his presence in the region would boost Britain’s push to seal a new £20 billion arms deal to sell Typhoon warplanes to the Gulf States, as well as win backing for the expansion of the naval base in Bahrain. Mr Hammond’s pull out is reported to have angered some representatives from Gulf States attending the conference. Labour said the withdrawal could damage Britain’s relations with its partner allies in the region. However, while confirming the defence secretary was scheduled to attend, the MOD denied that the defence secretary was due to give a speech.
The Secretary of State for Defence Philip Hammond MP delivered an oral statement to the House of Commons the Government’s plans for reform of defence procurement.
Mr Hammond opened his statement by saying there was widespread acceptance that the present defence acquisition process is not good enough. Highlighting the report compiled under the previous government by Bernard Gray, he said there that while there had been notable successes, there had been many examples of poor-performance and sub-optimal outcomes for the armed forces and the taxpayer.
Mr Hammond said that changes already implemented had ensured that a £38 million black hole in the budget could be resolved and that DE&S effectiveness was no longer undermined by an overheated programme. However, he said that the reforms already instituted were only a start, adding that there is still a long way to go in procurement reform.
On 19 November, Mr Hammond mentioned that he informed the House that the MOD had reached the detailed proposals stage of the competition, with only one proposal being received from the two consortia remaining in the process. Mr Hammond confirmed to the House that the competition would not be continuing and therefore the government will not proceed with the GoCo model at this time.
According to Mr Hammond, the heart of the approach was to “test the market’s appetite” for delivering a GoCo along the lines set out, using the competitive process to drive innovation and value. He added that with only one bidder remaining in the competition at this stage, a judgement had to be made about whether the public sector comparator alone would generate sufficient competitive tension to ensure an effective outcome for the armed forces and value for the taxpayer. He said that it had therefore been concluded that the risks of proceeding with a single bidder were too great to be acceptable.
Mr Hammond said that GoCo remains a potential future solution to the challenge of transforming DE&S, but that further work is necessary to develop DE&S financial control and management information systems to provide a more robust baseline from which to contract with a risk-taking GoCo partner.
The MOD will therefore build on the DE&S plus proposition, which Mr Hammond said would transform DE&S further within the public sector, supported by the injection of additional private sector resource and ensure the organisations become “match-fit” as the public sector comparator for a future market testing of the GoCo proposition.
Mr Hammond outlined that the unique nature and characteristics of DE&S would be recognised as a commercial facing organisation by setting it up as a bespoke central Government trading entity from April 2014. The new organisation will be given a hard boundary with the rest of the MOD, and a separate governance and oversight structure with a strong board under an independent chairman and chief executive, who will be accountable to Parliament for the performance of the organisation. Mr Hammond said that Bernard Gray has agreed to become the first chief executive of the new trading entity, thus providing a vital thread of continuity between the original Gray report and the continuing DE&S reform agenda.
In response to the Defence Secretary’s statement, Shadow Defence Secretary Vernon Coaker criticised Mr Hammond for an “embarrassing U-turn” and asked why it had taken the Government so long to realise the difficulty of proceeding with only one bidder. Mr Coaker went on to say that the Secretary of State was in danger of making a bad situation worse by announcing the swift move to a DE&S plus model. He warned that there had been no timeframe for consultation or scrutiny for the new proposals and said they posed more questions than they provided answers to.
Mr Coaker did however say that the opposition support a DE&S plus model and that it is conscious of the need to reform Britain’s defence procurement. However, he said that more detail was needed on the proposed model and that the projected costs needed to be set out.
Policing Minister Damian Green said that the organisations mentioned by Mr Gwynne refer cases to the IPCC, which then decides what form of investigation, if any, to carry out. It will continue to do so.
Defence Minister Anna Soubry responded that this information is not held in the format requested as the MOD does not routinely distinguish between UK and overseas travel when accounting for the associated expenditure. Ms Soubry said she could provide information on expenditure in the UK on hire cars and hotel accommodation arranged through the applicable central contract.
For the financial year 2012-13, the MOD spent approximately £14 million on hire cars and £28 million hotel accommodation.
Ms Soubry said to give context, these figures relate to approximately 230,000 military and personnel in 2012-13.
Soubry said that the MOD was, under its transformational programmes, encouraging and facilitating the adoption of working practices that reduce the need to travel (such as audio and video conference) and has achieved a reduction of 20% in overall travel and subsistence costs since FY 2009-10. Soubry added that staff that need to travel must do so in a way that is the most economical in both cost and official time.
Equipment worth £1.5 million has gone missing from the MOD distribution base in Donnington. The Daily Mirror reports that vanished items of army equipment include £13,500 of body armour and infra-red cameras worth £8,500. The Department said that even fake blood and £8,500 of edible survival training candles have disappeared. Other big losses from the base include £14,500 of TV systems and batteries worth £24,600. The Taxpayers Alliance said it was concerned over the report, saying “this isn’t the odd missing pair of boots”. An MOD spokesman said that “every effort” was made to avoid losses of any kind.