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UKTI_RGB_AW_30px_DIG_05 Feb 15. Confirmation on Tuesday that Bernard Gray, Chief of Defence Materiel (CDM), has agreed to stay until the end of the current year will be welcome by those of us that realise the need for continuity at this crucial stage in the defence procurement reform process. With important elements of structural reform at the Defence Equipment and Support (DE&S) organisation to complete it is pleasing that the need for management consistency has not been ignored. Personally I would have liked Mr Gray to extend for a further four year term but I suppose the reality is that five years in this demanding role is probably more than enough.


richardpHaving now completed the official four-year appointment term the announcement that CDM has agreed to stay in post until the end of this year to see through more vital elements of reform and to ensure an orderly and smooth transition to his eventual replacement is a very sensible solution welcome. It should I hope bring an end to the various conspiracy theories that when added up came to virtually nothing although it will at least keep them guessing   for the best part of this year. That the confirmation of CDM being asked and having agreed to sat for another year came on the same day that the highly respected Head pf UKTI DSO, Sir Richard Paniguian, hung up his boots from a position that he held for an extended six and a half years is of course pure coincidence. I will return to the retirement of Sir Richard as Head of UKTI DSO further down.

(Photo Richard Paniguian, right, with Ian Wilson, CEO of WFEL)


bernardgreayThe decision to extend the term of Bernard Gray as CDM until the end of 2015 had been widely anticipated by those of us that have been following the situation. Getting defence procurement right and making it more cost efficient and relevant to all those involved has quite rightly been the highest priority of those charged with running UK defence. That Mr. Gray is not necessarily well liked in some circles, that he has been demanding not only on his staff but on the defence industrial base matters far less than the part he has played ensuring programmes are completed on time and on budget. And while the process of change is far from complete yet I would suggest that with more than a degree of hard work by those involved implementation of the remaining structural elements of DE&S reform can be all but completed by the end of 2015. At that point, having by then been in the role for almost five years, Mr. Gray will hand over a fit for purpose procurement operation to a chosen successor who, working with industry and the military can lead defence procurement into a new era.

Having inherited the mess that defence procurement certainly was back in 2010 and that to put the whole thing into perspective would be to remind that in 2009 seventeen of the largest procurements programmes were over budget and late in delivery behind Gray knew well what he was taking on. He had after all provided the previous government with a report on the shambles that defence procurement was in. Gray also knew that the chosen route to success would be marred with political potholes and I make no apology, warts and all, for giving credit to the new regime created at DE&S and for what they have already achieved.

Of course there is a long way to go yet but by the end of this year I do believe that DE&S will be unrecognisable from the organisation that Mr Gray inherited.

The process of change at DE&S has undoubtedly been painful for those it has already affected internally and no one can say that industry has had it easy. Stubborn, hard headed and driven determination to change notions that have existed for a generation has been required and with it have gone many jobs. Sometimes it has been a case of brute force and no finesse but if that is what it takes to get the job done then so be it. I am in no doubt that faults and all Bernard Gray has been the right man for the job.

Five years in the CDM role should be enough anyone but for all that I rather doubt that the Government wished him to go but I also know that he himself would never have stood in the way of change had someone else better been available. An interesting role it has been but the job is far from being finished yet and one that over the years has not been helped by politics sometimes being at odds with reality meaning not all battles have been won. But really good progress, as I had suggested last month, has now been made and with a far greater degree of satisfaction shown in the last NAO large projects report evidence of progress in defence procurement really is self-evident.

The next twelve months will see a General Election (or maybe even two) and all the implications of potential ministerial change that go with it. A ‘Comprehensive Spending Review’ process and publication of SDSR 2015 will follow towards the end of the year or very early next. All these hint at further potential change not only in defence policy and spending issues and policy but for all the thousands of people involved in defence as well. The future will be about far fewer large programmes of course but to have changed the Chief of Defence Material at this point would in my view have been very unwise.

That said, for a new person to come in at the start of next year and to begin to take the organisation forward into a new and much tighter era is the right time for this to occur. By then DE&S really can I hope be properly described as an organisation that is not only more than fit for purpose but one that is moving forward on a basis of ongoing incremental change and benefit.

As a final word on the topic, I would be very surprised that in searching for a possible replacement for CDM (the successor will be known as CEO of DE&S) over the past three months that the process had not thrown up one or two possible candidates who may be available for succession in 2016. I certainly hope that is the case and if it is we may be assured that the handover process will be better for that.

As someone recently suggested to me, knowing when to declare is certainly a key skill just as is making sure you don’t stand in the way of change. All credit to Sir Richard Paniguian then for choosing now as the perfect time when UK defence and security exports have never been greater to hang up his boots as Head of UKTI DSO after six and a half years in what has I know been a very demanding job.

While we have to wait several months yet before we receive final confirmation of 2014 defence and security exports it is, I believe, worth reminding that defence exports for 2013 hit a record £9.8bn and that those for Security hit £3.2bn. This is a remarkable achievement in itself and whilst not all of this can be put down to the work of UKTI DSO a great deal of it certainly can.

Paniguian leaves UKTI DSO not only fit for purpose but I would have to say in an excellent state of health. I confess to having had serious doubts when responsibility for defence exports was shifted from the MOD to UKTI in 2009 and I will always dislike the underhand way in which this was done by Gordon Brown. But through hard work and initiative the new UKTI DSO has worked and I believe that under Stephen Phipson it will continue to work just as well. Intense knowledge of Security is the key facet that the new Head of UKTI DSO bring with him when he takes over the role on a few weeks’ time. There can be no taking the eye off defence of course and I am confident that this will not be an issue. Phipson enters a well-motivated UKTI DSO and talking to colleagues and peers on Tuesday at the annual UKTI DSO Symposium I heard not one word of discontent. Much of that is down to the quiet yet thoughtful and efficient style of leadership that Richard Paniguian brought to the role. How we will all miss his well-used expression ‘now here’s the thing’!

Richard Paniguian is in fact the fourth Head (both of UKTI DSO or its immediate predecessor DESO – Defence Export Services Organisation) that I have had the pleasure of working with and supporting over the past couple of decades. During that time I have been to the US in support of helicopter programmes and also into theatre in Iraq. Of Sir Richard and his immediate predecessor, the equally highly respected Alan Garwood who following the end of his term at DESO returned to BAE Systems as Group Business Development Director, it really can be said that both stand out above the crowd for the great work that they have done for and on behalf of UK defence exports and latterly, for security exports as well. Both earned great respect wherever they visited abroad and as they worked hard with and on behalf of industry in support defence exports. They are both hard acts to follow.

Stephen Phipson who takes over the role of Head of UKTI DSO is currently a director in the Office of Counter Terrorism and Security at the Home Office. Phipson also spent a total of 16 years at Smiths Industries including being president of Smith Detection. We have already met but I look forward to getting to know him much better in the months ahead and to providing whatever support that I can. He is a sound choice in my mind and one who will I am sure place as much emphasis on defence as he will for the security aspect for which he is best known.

To Richard Paniguian who I had the pleasure of spending some time with on Tuesday which was officially his very last day in the job all that I can say is thank-you for the work that you have done on our behalf and I wish you very well for the future in whatever role that you decide to take on.


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