Following last month’s news that one of the two remaining consortia bidding for the GoCo contract had pulled out, Hammond told the House of Commons that he’s “decided not to continue the present competition”.
Instead, he wants to “build on” the ‘DE&S+’ option, keeping the organisation in the public sector but giving it additional operating freedoms.
Speaking to CSW about his second annual report into MoD reform, published last week, Levene (pictured above) said: “Here’s what you need to do: get a handful of people who have that [commercial] experience, import them into the system and let them be the lead of that particular function”.
Levene has always opposed the idea of contracting out the management of DE&S to a GoCo, he told CSW. Instead, a few top experts should be recruited to help train DE&S staff to “negotiate with the most senior people in the largest companies in the country and around the world” – a capability that currently “just does not exist within the civil service”.
The “critical thing”, Levene added, is the ability to offer these specialists salaries “considered attractive in the commercial sector” – something that’s impossible due to civil service pay restrictions.
Hammond said yesterday that from April 2014, DE&S will be a “bespoke central government trading entity”, operating at arm’s length from the MoD with new “significant freedoms and flexibilities, agreed with the Treasury and Cabinet Office, around how it recruits, rewards, retains and manages staff.”
The new model could look similar to that of the Defence Science & Technology Laboratory, which operates as a trading fund with additional powers. This, according to its head, Jonathan Lyle, allows it “the freedoms [it needs] to operate”.
Commenting on other aspects of MoD reform, Levene told CSW that he’s concerned about the MoD’s lack of robust action against underperforming individuals: “Where somebody doesn’t get it right and has a bad result, they should be fired.”
Levene added that in his experience the MoD’s civilian and military staff are “extremely able”, but “you just need that threat [of dismissal] hanging around”.
In response, the MoD’s director general of transformation, Jonathan Slater, said that in April 2012 the ministry put in place “an appropriate accountability framework”, whereby the organisation’s seven top-level budget-holders are held to account by the permanent secretary and chief of defence every quarter, in addition to its standard disciplinary procedures.
Levene’s annual report – an update to his 2011 defence reform plan – was broadly positive about the MoD’s “substantial progress”. Slater said ministry officials should “take credit” for that progress and “be proud of their efforts”.
Levene also told CSW that he has “the highest regard for civil servants” and that repeatedly blaming them for delivery failure in public is “utter nonsense”. He challenged claims by Francis Maude, minister of the Cabinet Office, that there is a “bias to inertia” in the civil service.
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