back to article Watchdog raps MoD over Qinetiq sell-off bonanza

UK gov watchdog the National Audit Office (NAO) has released a damning report into the privatisation of the country's top-secret defence research labs and facilities as Qinetiq. The report, now available online from the NAO, severely criticises the Ministry of Defence (MoD) and some of the consultants which advised it during …


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  1. amanfromMars Silver badge

    Major Tom to Grounded Control ...... Zigzag is Astutely Enabled and NEUKlearer Armoured

    "It is sometimes said that the NSA has actually been able to learn a few tricks from British electronic spies in recent times."

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    I Trust that is not too Ambiguous. New Program, New Driver, New Feed Older Seed/Virgin Source.

    PS Virgin Source Gives Master Pilots Wings..... Top Gun Source.

    It is also very AESThetan. ....Very HAL.:-) .... Very Hollywood Script.

  2. Gulfie

    PFI = Long term (off balance sheet) uncontrolled financial commitment

    When is the government going to see sense over PFI? (or, in long hand - Public F****d by Industry). We the UK taxpayers are funding obscenely long gravy trains for large UK and foreign companies to make the Government balance sheets look good.

    As with this exampl, the government sells something off (or persuades a company to build something - a school or hospital) in return for a very long (e.g. 30 years) lease-back contract that is stacked heavily against the 'users' - higher costs, no early terminations...

    All the while this 20,25 or 30 year one-way commitment is not declared as a liability in the government accounts, making things look a lot healthier than they really are. And the government escapes the direct capital investment required, exchanging it for this long term commitment.

    There are problems now, particularly in the health service where money is being sucked into PFI hospitals from other services... but in ten years, when these service companies have racked up the charges, we will be presented with a choice of cancelling contracts and paying an absurdly high penalty to do so, or to pay significantly over the odds for the services. This will then be used as a reason to cut back on the services that we, the public, need and are paying for. No, wrong. We're not just paying for the service, we are also paying to line the pockets of those in the boardrooms of the service companies that won those contracts in the first place...

  3. Chris Morrison

    Could be worse...

    ...The report could have contained at the back of it the names, addresses, date of birth, NI number and bank account details for anyone connected to the MoD and QinetiQ!

    Now if I could just find these 2 CD's I've mislaid and i'll be getting my coat.

  4. Anonymous Coward
    Anonymous Coward

    Oh what's the point ?

    The Civil Service and MP's are never held responsible for their actions. What's the worst that might happen ? A resignation ?

    Might as well have saved the money this report cost. Nothing is ever learned, no-one is ever punished.

    Perhaps the NAO should investigate itself and the lack of benefit that its futile activities bring to the public.

    So the sell-off was politically motivated rather than cost motivated. What are you going to do about it ?

  5. Anonymous Coward

    Stinking Capitalist Running Dogs

    Time to hot foot it down to the lower house with torch and flame

  6. Anonymous Coward

    Just one little thing.......

    they haven't F****D UP would be nice.

    Please someone give me some reason to be hopeful, just one little thing no matter how small? Surely can't be that hard to find just one!!

  7. Dennis O'Neill


    Private Eye has been banging on about this for years, pretty much ever since it was first mooted. The Eye should be compulsory reading for the entire electorate.

  8. Anthony

    I Will NOT resign

    Nobody will ever take the blame for their actions or inactions because the standing excuse is "it's my job to fix this mess and I will stay in position and do that."

    Of course if they had done their jobs in the first place, there wouldn't be a mess to fix. Yes from that point of view the report was a waste of money but hey, the blogosphere needs these reports, it confirms our beliefs that Government is a mess, regardless of which side you don't vote for.

  9. Anonymous Coward


    SOooo .... it's the kleptocracy giving the Mugabe treatment to some US client state, is it? Maybe these firing ranges should be put to better use soon. Yeah, "contracting with the Carlyle Group" ... oh my.

  10. Mr Chris


    .. John Bourn knows a thing or two about fleecing the public purse, so he'd know it when he sees it, I suppose.

    Why on earth do the government persist with these sell-offs and PFI/PPP deals, when all the evidence (as handily compiled by Private Eye a year or two ago) is that they are significantly more expensive than the public equivalent (when one removes the handy "optimism bias" adjuster that the private sector consultants add to the calculations to show how much better value the PFI solutions are. No conflict of interest there eh?).

    PFI policy is controlled by a PFI unit under a chap who is a partner on secondment from PwC - and PwC just happen to be the largest PFI financial adviser to the government. Ace.

  11. Mr Chris

    Nothing new though, is it?

    Since Brown and Blair cooked up the PFI fiddle (very useful for Gordo to stay in line with his Golden Rules) and also decided to continue the Tory policy of privatising everything in sight (because the private sector knows best, oh yes), it's been one long catalogue of projects being late and over budget.

    Note to mods - I'm confused as to why none of my comments over the last day or two have been posted? Have I done something to offend the mighty El Reg staff?

  12. Anonymous Coward
    Anonymous Coward

    Between the li[n]es

    So, the Carlyle Group, which is in no way related to George Bush and Saudi oil money is making money from governments.... again..... this is not a story about PFI this is the prologue to another documentary by a fat beardy american.

    Mr Chris, you are right - but this is facilitation, with the risk of calls of "consipacy theory" are the government a) Stupid or b) Up to something that we don't fully understand, not sure which one I would prefer.

  13. Anonymous Coward
    Anonymous Coward

    employee shares

    QinteiQ employees earned more than 80 quid. That 40 pound share option converted to 1750 shares, about £3700 when I sold mine! Not quite as good as Chisolm and Loves 20 odd million though! Fortunatly I don't work for them any more.

  14. Luther Blissett


    >> When is the government going to see sense over PFI? (or, in long hand - Public F****d by Industry). We the UK taxpayers are funding obscenely long gravy trains for large UK and foreign companies to make the Government balance sheets look good.

    The opposite point of view says the government knows exactly what is happening. The USA has its corporations profiting vastly and unaccountably in Iraq and Afghanistan at cost to their taxpayers. The UK, having been told that no way is it going to get a share of this action (remember BP started in Iraq), has, by some bizarre coincidence, entered into schemes which likewise cost their taxpayers vast and unaccountable sums, such as PFI and IT contracts. It could be argued that in both cases the vast debts from these government arrangements produce results which were either unnecessary or could have been achieved at less cost differently. (The UK example would require an understanding of the specific accounting rules of the IMF).

    Except that is is not really coincidence. It is a way for the central banks (which supposedly stump up the money for governments to be able to pay for things) and their private operators to ensure massive recurrent revenues for the future, in the US from interest, in the UK from renting hospitals back and paying for their "management".

  15. amanfromMars Silver badge

    Dated ....Past Sell By Date

    "Not quite as good as Chisolm and Loves 20 odd million though" If they are of any value to Qinetiq that will be Qinetiq Funding to Spend on Employee Programs/Inward and Onward In-House Investment. I try not to think of Carpetbaggers...that is just so Harold Robbins kitsch.

  16. Lloyd Walters

    Business types running rings round Whitehalls politico's & mandarins ?

    In the article you wrote:

    "Three other executives are specifically named by the NAO: Graham Love, Hal Kruth and Brenda Jones, who made £20m, £13m and £11m respectively."

    These three joined QinetiQ in 2001. Would it be unfair to assume that the civil service types they replaced might have been uncomfortable with setting themselves up for such a gargantuan windfall ?

    Their leader, Sir John Chisholm, also has a business background, and was brought in by the MoD in 1991 to consolidate their research organisations, and ended up running the lot.

    Speaking on Radio 4's Today programme this morning, Lord Gilbert said that Chisholm had misled him with regard to the possible benefits accruing to senior management following the privatisation. At the time Lord Gilbert was the minister at the MoD responsible for this matter. He presumably remains a relatively poor man.

    These were the relative returns on investment:

    Top ten - 200 fold growth (4.0 % of the shares)

    Next 245 managers - 145 fold growth (3.1 % of the shares)

    Staff 8000+? - 9 fold growth (3.4 % of the shares)

    Why was it deemed reasonable that the top ten managers needed to be "Incentivised" at over twenty times the rate of incentivising the staff? In the outside corporate world, when staff, management and directors are awarded share incentives, they are usually at the same price discount at any one time, and the relative importance of the people being rewarded is accounted for in the number of shares made available to them. However in this case, QinetiQ's top management awarded themselves shares in large quantites, which would possibly be fair enough, but then they really gilded the lily by charging themselves less than a twentieth the price per share that the rank and file had to pay !!! A moral crime of the first order.

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