Tony Douglas to Run MOD Procurement (and a Lot More)

Tony Douglas was appointed last week to run the Defence Equipment and Support organisation (DE&S), on a package reported to be £285,000 plus a bonus of potentially a further £250,000.

Douglas has an impressive track record, having left school at 16 to become an apprentice toolmaker in Liverpool with General Motors. He rose rapidly through various blue-chip firms to more recently be CEO of construction giants Laing O’Rourke and then Abu Dhabi Airports. So here is one thing we can be sure of - you don’t achieve that sort of ascent without being highly effective.

But this package will make him by some distance the best paid public servant in the country, outranking the Head of the Civil Service, the CEO of the Health Service and considerably out-earning the Prime Minister. Is this going to make him a "marked man"? Will the media, not to mention other disgruntled public employees, simply look to show that he is failing, as it would make an obvious headline story? Because, as the Daily Mail says, he will be the "Fattest Cat in Whitehall".

And we suspect there will be some jealousy in the ranks, quite understandably. There are some very senior Armed Forces folk - top generals and the like - who have worked their way through the system, are currently in jobs pretty much equivalent to this role, and earn perhaps £140-150,000. Not bad, but they might look at Douglas and ask what he has done to deserve more than three times their reward. And don't forget that the Armed Forces are downsizing considerably, so we've already seen some stories along the lines of "his salary would pay for 25 soldiers" and so on.

Or what about the very biggest roles in the NHS? Or running DWP or HMRC? Or a huge Council even? Will this open the floodgates to spiralling public sector salaries?

Of course, whilst this role does have responsibility for most of MOD's huge procurement spend, it is much more than a "procurement" or even "commercial" job. It is really CEO of a substantial organisation, responsible for huge programmes, running logistics operations, and  with some 12,000 staff. But then we might say the same of various other public sector roles.

The other curiosity here is whether Bernard Gray, the incumbent in this role, wanted to stay. He was reported fairly recently in a Defence News interview sounding pretty enthusiastic about another term in the role - so perhaps he didn't get the job. Or perhaps he have decided to call it a day after the biggest element of his master plan, the private sector jv or GoCo for DE&S, fell apart because of lack of bidders.

DE&S now has its multiple partners strategy, with PwC, Bechtel and SCH2M providing management support to various parts of DE&S. We have our doubts about the strategy, which might lead to confusion and even less joined up thinking than we have seen in MOD previously. Good luck with managing that, Mr Douglas.

What it really comes down to, if we forget any pure philosophical arguments about the package, is whether Douglas will be successful. Not all high-level transfers from the private sector have worked out in the past. But if he does succeed, we probably shouldn't begrudge him this sort of salary given the scale of the task. That does lead to one further question - what are his measures of success? What are his objectives, his targets, the metrics that will determine whether he receives the full bonus?

Now that would be interesting to know. I feel an FOI request coming on ...

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