More on MOD “cash for influence” and equipment procurement

We reviewed yesterday the Sunday Times "sting" where various retired military men were caught offering to use their influence in favour of certain suppliers or projects.

It's not clear how much these individuals could actually achieve, and how much of their conversation was bravado around how important they are / were, and I don't honestly think they are in a position to influence actual procurement processes very much. But it raised a couple of issues beyond the specific MOD situation.

The first is around the "revolving door" between public and private sector, as senior people move between the two. The opportunities for misuse of knowledge or contacts are obvious, and the current system under which the Advisory Committee on Business Appointments has not stopped a single person from making a particular move for the last 15 years is clearly a waste of time.

But is it feasible to stop it? Cries of "restraint of trade" would quickly be heard, and we can't on the one hand propose that the public sector needs more private sector expertise, then argue that once you're in a public role, you can never go back to the private. Yet this sort of thing all adds to the general and growing  public mistrust of both big firms and big government - everyone appears to be "in it for themselves", not a healthy state of public opinion.

Of course, it is not just MOD where this revolving door happens. We mentioned the John Suffolk move to Huawei, perhaps the most worrying example of this trend.  And Dean James, a senior DWP executive, moved from DWP to Ingeus, who then did very well in their bidding for the Work Programme contracts. I'm sure that was done fairly, knowing DWP, but it all just leaves a slightly worrying taste in the mouth.  Just this week, we heard that Alan Cave, a key DWP man on the policy / delivery (not procurement) side of that programme has left to go to Serco. Apparently as an SCS2 he wasn't senior enough to need clearance from the Advisory Committee on Business Appointments, but I can assure you that his value to Serco will be immense.

All of this puts even more pressure on public sector procurement to be very transparent, fair and honest. That is the most important guard against corruption and undue use of influence. Yet the second point I drew from the Times article shows the dilemma faced by key organisations such as MOD.

One of the retired military men - Sir Richard Applegate -  talked about how he had helped to lobby and influence the MOD to spend more on a certain sort of helicopter equipment. Now while that may have favoured his client supplier, it sounded like there was a decent case for the expenditure on safety and performance grounds. So in an ideal world, MOD would be researching these issues themselves, and it wouldn't need lobbying to get the product onto the shopping list.

We therefore want an MOD that is open to the market, to new ideas, and indeed is pro-active so it doesn't come down to contacts and influence to get your products onto their radar. But then we want and need MOD to run scrupulously fair and professional procurement processes, that make sure the best supply decisions are made.

That's a tricky balance, even more so when public sector resources are under pressure. And of course there is the elephant in the room here. If Defence Equipment and Support does go down the GoCo route, how will things change? Will the retired generals and lobbying firms find it easier or harder if Serco or Bechtel are running the military procurement organisation? Or will it still be Ministers and top people in MOD who hold the real power around allocating budgets and specifying what is bought?

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