Peter Levene to advise on MoD restructuring

13 August 2010

13 August 2010 | Angeline Albert

Margaret Thatcher’s former procurement chief at the Ministry of Defence (MoD) has been appointed to lead a new Defence Reform Unit (DRU).

Peter Levene, chairman of insurance market Lloyd's, will head a panel of business leaders in the DRU to advise on department restructuring in the light of MoD budget cuts of up to 20 per cent in the next four years.

The one time MoD procurement chief worked for former British prime minister Margaret Thatcher in 1985. His introduction of greater competition, changes to business terms and conditions changed the way the government procured defence equipment.

His main involvement in the defence industry now is as non-executive chairman at General Dynamics UK.

Speaking at the Royal Institution of Chartered Surveyors this morning, defence secretary Liam Fox called for “a leaner and less centralised organisation combined with devolved processes which carry greater accountability and transparency”.

“We must get away from the over-centralising tendency that has become the hallmark of the MoD in recent years,” Fox said.

Taking a swipe at the former Labour government, Fox said: “There is an unfunded liability in defence of around £37 billion over the next 10 years. The equipment and support programme alone makes up over £20 billion of this – that is equipment they planned without ever having an idea whether the budget would be able to afford it.”

The MoD would also carry out a strategic defence and security review.

Fox said: “It is a disgrace that Labour allowed 12 years to elapse without conducting a defence review despite committing our armed forces to conflicts in the Balkans, Sierra Leone, Iraq and Afghanistan and with the enormous changes in the global security picture.”

Fox said the MoD would be reorganised into three pillars: policy and strategy; the armed forces; and procurement and estates.

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