PracticePeople In PracticeTreasury plans for MoD under heavy fire

Treasury plans for MoD under heavy fire

The Treasury has come under fire for pushing controversial plans to partially sell-off Britain's secret defence research laboratories despite industry opposition in both the UK and US.

The House of Commons all-party Defence Committee report said the Treasury-backedstrategy to sell-off the Defence Evaluation and Research Agency (Dera) under apublic-private partnership relied on ‘a wing and a prayer’.

The Ministry of Defence sale of Dera could bring in as much as £1bn for the Treasury despite opposition from UK defence manufacturers and the US government.The new plan will see Dera split in two, with 9,000 scientists due to work for anew company to be floated on the stock exchange and 3,000 remaining as part ofthe MoD.

The report said that the sell-off would threaten the UK’s ability to acquireeffective military equipment for its armed forces.

A MoD decision on the sale is due at the end of next month.

The report stated: ‘In our judgement the current risks of proceeding with thepublic-private partnership – even in its new and improved format – continue tooutweigh the still hypothetical benefits.’

George Bruce, head of the House of Commons all-party Defence Committee, told theToday programme: ‘The drivers behind this are the Treasury. I’ll say that again – the Treasury, the Treasury, the Treasury. They and a few people at Dera are just out to save money.’

He pointed out that trade unions, UK and US defence manufacturers and the USgovernment were all opposed to the sell-off for business and security reasons.

‘The MoD argue that the private sector can do it, but we think they are wrong’,Bruce added. ‘Think again and quietly drop these proposals is what the Treasuryought to do.’

Minister for Defence Procurement, Baroness Symons that under the core competencemodel the MoD would continue to act as an in-house advisor.

She said that the use of prime contractors over the last decade and not thetreasury had driven the part-privatisation and claimed that the proposals hadbeen greeted on her last two visits in March and May to the US.

‘This is a privatisation too far’, said Ian Duncan Smith, shadow Minister ofDefence.

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