THE former chief of defence procurement under Margaret Thatcher has launched an outspoken attack on the Government’s Defence Industrial Strategy (DIS), saying that partnering is no substitute for competition in defence procurement.
Lord Levene of Portsoken, chief of defence procurement from 1985 to 1991, told the Commons Defence Select Committee that the plan for the defence industry published by Lord Drayson, the Defence Procurement Minister, last December was a return to habits that he had worked hard to undo in his time at the Defence Procurement Agency.
“One thing I have some fundamental difficulty with is the notion that partnering can be as effective as competition,” Lord Levene told the defence committee.
When asked by James Arbuthnot, Conservative MP for North East Hampshire and chairman of the Defence Select Committee, whether the DIS was a move away from the concept of obtaining best value for money, Lord Levene said: “The document tries as well as it can — and I think it has been very carefully put together — to steer a middle course and to achieve as much as it can in both directions. We will never have a perfect solution.”
Lord Levene, now chairman of Lloyd’s of London, was credited with introducing the principle of competition to defence procurement in the late 1980s. However, in the 1990s critics said that competition had deteriorated into an era of confrontation, in which the Ministry of Defence and BAE Systems, Britain’s biggest defence supplier, were often at loggerheads.
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John Smith, Labour MP for the Vale of Glamorgan, asked Lord Levene whether he was concerned that the Government was in danger of conflating the interests of one private company with the interests of the country. “If I may say so, you have effectively answered your own question,” Lord Levene said.
Lord Levene’s comments are likely to surprise many in the defence industry. Although he makes clear that he is speaking in a personal capacity, he is the honorary president of the Defence Manufacturers’ Association and chairman of General Dynamics UK, the military communications group.
The defence industry has welcomed the DIS and has heaped praise on Lord Drayson, the architect of the document.
Lord Drayson said that Lord Levene had conceded in his evidence to the committee that the environment had changed greatly since 1991. “Where competition is appropriate, competition is a central part of our techniques, but, unlike in the 1980s, in some areas it is not possible to take a purely competitive approach,” Lord Drayson said.