MOD GoCo – comments and leadership

Our piece on the end of the Ministry of Defence GoCo initiative got some interesting comments last week . Phoenix said:

“Putting spec changes in complex MoD procurement projects on to a sensible, commercial footing, where cost and programme implications for each proposed change is clear to see? That sounds like a good idea. Recruiting talented, able staff and paying them rewards competitive with the commercial sector? Sounds like another reasonable idea. Just remind me why we need a GoCo to achieve those two fairly simple improvements”?

Biz chipped in with some different analysis of Gray’s justification of the GoCo:

As I understand it Mr Gray is concerned about a couple of other things too:

1. A divided loyalty in DE&S staff. That is, they are reliant on MoD centre for their ongoing careers and therefore are more likely to connive with the requirement setters in the ‘conspiracy of optimism that Gray outlined in his 2009 report. .... Gray thinks that a GOCO will create a complete separation between the groups and disrupt this suggested conflict of interests...

2. Gray also thinks that the GOCO is very difficult to undo and would therefore make the structural changes within MoD procurement near permanent... Big outsourcing decisions will all have this factor within it, but it’s usually seen as a risk rather than an advantage.

I have a feeling that GOCO, as an argument, is probably too finely balanced .. for it to be demonstrably the right thing to do. A lot of the thinking about it seems to be down to instinct rather than an overwhelming case. Is that enough to justify the huge risk involved in privatisation? Probably not, when there are other things that can be done.

That last summing up is pretty close to my view really. And thanks for those and as always all your comments!

The way forward now is apparently to give Defence Equipment and Support more freedom and autonomy – for instance to pay higher salaries for key staff (see our post here). And last week, the Minister, Philip Hammond, announced that the “new” organisation will be headed up by Bernard Gray, Chief of Defence Materiel, who wrote the report back in 2008 which first promoted the GoCo idea. That appointment has drawn some very different reactions , so I spoke to two people who know MOD well.

So here is “the Colonel” as we’ll call him.

 “Well, the job isn’t very different to what he has been doing for the last two years really and I don’t think you can blame Gray for the failure of the GoCo idea. It may come back anyway in a couple of years. He has done the right thing – he promoted it, but like a good public servant, he worked with the Permanent Secretary and Minister to evaluate the options thoroughly and professionally.  Not everyone likes him of course, inevitable at that level, but he’s got a serious intellect and the confidence to stand up to the politicians and the senior uniformed staff – that’s a big positive that we haven’t always seen in MOD. And it’s hard to see who else could come in and do a better job of running DE&S+ really”.

But there is another view as well. Here is the “Wing Commander”.

“The chap was never qualified for the job, little relevant leadership experience, and just writing a report doesn’t make you an expert. Never run a major programme in his life. He came in to do one thing – develop and implement the GoCo. He has signally failed to do that.  Instead the Government has opted for a model which Gray rejected in his report. By any standards, this is a major failure, but he’s been rewarded by being appointed CEO of the new entity. So much for private sector disciplines and senior managers facing the consequences of failed programmes”!

What do you think? I’ll probably go with the Colonel – I wouldn’t blame Gray for what’s happened. But it would be interesting to know how all this is perceived within MOD, at senior and working levels, and how the staff in DE&S are feeling in particular after years of uncertainty. Are they happy with DE&S+ as a sensible compromise route forward? Or does it look like a fudge that could be the worst of both worlds?


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Voices (4)

  1. R O Tate:

    I don’t see why you would agree with the Colonel. Gray was brought in to oversee the privatisation of DE&S, failed miserably and has cost the tax payer the best part of £20 million. Furthermore, the claim that he oversaw the options in a professional manner doesn’t bear scrutiny.

    GOCO was the only game in town as far as he were concerned. The proof is the undignified scramble going on now to cobble together something that looks remarkably like an option that was discounted some time ago.

    Gray didn’t have the experience, the leadership or the vision to drive through the change to a GOCO. The truth is the whole programme should have been scrapped when they were down to two bidders, both of which were led by American companies.

  2. Think Defence (@thinkdefence):

    DE&S reform needs to stop tinkering and address the real issues, politics and the requirements setters

  3. bitter and twisted:

    Do senior uniforms ever get court-martialled for programme disasters?

    1. Dan:

      They’re just doing their jobs – getting the best equipment for their men. Money just isn’t usually a factor in their thinking.

      There should, however, be people capable of saying ‘no’ to them, and they are ones not doing their job.

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