Public-private relationships in defence procurement in the EU: The case of the UK

Dr Resimić, M. (2019). Public-private relationships in defence procurement in the EU: The case of the UK. GTI-WP/2019:04, Budapest: Government Transparency Institute.

Defence procurement is sensitive to corruption and state capture risks, because the government enforces secrecy and awards high value contracts to firms in a market dominated by a few large players (Pyman, Wilson & Scott, 2009; Courtney, Cockcroft & Murray, 2002). Defence procurement in the UK has some additional risks considering that around 50% of its contracts are awarded without competition. Although the UK has low levels of corruption risks in its defence sector compared with other EU member states, there are still certain issues that cause concern. For example, survey evidence suggests that businesses in the UK think that too close ties between politics and business lead to corruption (Eurobarometer, 2017), while the national public opinion survey suggests that almost 80% of respondents consider the revolving door phenomenon as a possible example of corruption (Barrington, 2010). The available data indicates that the revolving door is a common practice in the UK, especially in the defence sector. Namely, the data of the Advisory Committee on Business Appointments (ACOBA) suggest that the highest number of requests for movements from the public sector came from the Cabinet Office and the Ministry of Defence (MoD) in the last two years (ACOBA, 2018, p. 6).

Over the last decade, the UK expressed a strong commitment to tackle some of the most pressing concerns in its defence acquisition process, related to achieving better value for money (VFM) and increasing the scrutiny of non-competitive contracts. Namely, it abandoned the outdated Yellow book regime that was used to control for an excess profit in single sourced defence procurement for more than 40 years and replaced it with a statutory framework under the Defence Reform Act of 2014. Although the UK has developed a strong institutional framework that can tackle corruption risks in its defence acquisition process, this report will demonstrate that certain risks remain, especially with regards to the revolving door, the scrutiny of single sourced contracts and achieving better VFM.

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