Britain is considering turning to the private sector to improve its military equipment procurement programmes, the BBC reported on Friday, after several official reports blamed the defence ministry for wasting billions in delayed or scrapped projects.

A parliamentary watchdog, analysts and the media have heavily criticised the defence ministry in the last year for going ahead with plans to build two new aircraft carriers, only to have one mothballed upon completion and the other not expected to be fully operational until 2020.

The ministry also scrapped a multi-billion-dollar order for Nimrod surveillance planes after a comprehensive military review last year, part of the Conservative-led government's efforts to shrink the 38 billion pound defence budget black hole it says it inherited from the previous Labour government.

Chief of Defence Materiel Bernard Gray, hired last year to rein in spiralling costs and delays in military procurement and maintenance, told the BBC Radio 4 programme Buying Defence he would recommend hiring from the private sector.

Organisations are very conservative, steady places to work where cultural norms persist over long periods of time. You need enough senior people coming in to be able to move the dial on that and that may well be hundreds of people, he said.

Where do you get those kind of people with those different cultural norms? A variety of private sector organisations could provide those skills to us and we need to look at how best to integrate them into our team, he added.

He also said he was looking at ways of forming partnerships with private sector organisations.

The move towards the private sector could prove controversial given the defence ministry is in the process of sacking thousands of staff, and has already been criticised for spending too much on external consultants.


Britain last year slashed its defence budget by about eight percent in real terms over four years, part of cuts across all government departments to tackle a big budget deficit and safeguard Britain's triple-A credit rating.

Minister for Defence Equipment Support and Technology Peter Luff said he was open-minded about private sector involvement in procurement, but no decisions had yet been made.

We will be as radical as we need to be to achieve the changes we need to improve the performance of the organisation, he said.

I think that will involve a greater involvement with the private sector in some way. I'm open minded on the options. The only thing I'd say is that I think the status quo is unlikely to endure, he added.

The Ministry of Defence (MoD) said it was too early to identify the type of private sector firms that could be involved.

A spokesman for defence industry trade organisation ADS said fewer staff were needed in the defence ministry's procurement division, but the remaining staff should be better skilled.

Defence firms have long blamed MoD meddling in ongoing projects and what they say are the ministry's muddled procurement policies for project delays and overspend.

The MoD has in turn introduced a name and shame policy on defence projects that run late or over-budget in an effort to bring market and public pressure to bear on what it considers underperforming defence firms.

Ministers have also warned British firms that they will consider buying cheaper equipment from abroad if more effort is not made to lower costs, and that it is not the ministry's job to subsidise the country's defence industry.

(Reporting by Mohammed Abbas; Editing by Jon Loades-Carter)