Private sector may be given power to buy MoD’s weapons and equipment

Ministers are considering proposals under which the private sector would play a big role in the procurement of weapons and equipment for the armed forces.

The civil servant in charge of defence procurement, Bernard Gray, has submitted a report setting out options for bringing in private expertise, and a decision is expected in the new year.

Defence officials said no decision had been made, but procurement minister Peter Luff said it was “unlikely” he would stick with the status quo, whereby multi-million-pound purchasing decisions are made by ministers and civil servants.

Ministry of Defence procurement has been the subject of many damning reports over a number of years, after a series of projects came in late and over budget.

A report last year from the Commons public accounts committee blamed “organisational failings and a dangerous culture of optimism” at the MoD for purchasing decisions that saw the department overspend on its budget year after year.

The new report is part of a reform programme introduced under last year’s Strategic Defence and Security Review to fill a £36 billion black hole in MoD accounts.

That review also saw the UK’s aircraft carriers left without jets and Nimrod surveillance planes broken up for scrap.

Mr Gray is understood to have identified three options for change, including the establishment of an independent body to run the £14bn procurement programme.

It would be run by outside contractors who would have the power to take purchasing decisions without prior ministerial approval. The body would be accountable to parliament but run as a semi-private operation, in a similar way to the Olympic Delivery Authority.

Mr Luff said: “We will be as radical as we need to be to achieve the changes we need to improve the performance of the organisation.”