The British Government of Gordon Brown is facing serious issues when it comes to defense spending. The recession has greatly affected tax revenue and required expansion of social spending to counter the effects. This has led to more borrowing like in the United States. This shortage of money has put pressure on the defense budget and this may affect future procurements to modernize the Royal Navy and Air Force.
The government is also receiving a great deal of criticism for not providing adequate equipment and helicopters for use in Afghanistan where a large force of British troops supports U.S. efforts. Recent activity has seen a spike in casualties causing even more pressure and criticism.
Channel 4 in England reports that the government commissioned a study of acquisition efforts. The report supposedly is so negative that it has not been released. One of its major criticisms is that the acquisition process is so slow that it increases costs as delays in awarding contracts or starting programs require government funds to maintain the industrial base. The report would like to make efficiencies in this process.
One of the key recommendations is that the U.K. look at privatizing the twenty-odd thousand strong workforce involved in managing the process. England has been much more aggressive in transferring some core capabilities such as R&D and training to private contractors. Some of the transfers of these capabilities has led to creation of companies such as QinetiQ.
The Obama Administration on the other hand is planning the opposite. They are concerned that there are too many contractors involved in acquisition and plan to eliminate the positions and create new civil service ones. The rationale for these two decisions are not based on the same logic. Britain is concerned about lowering costs by transferring presumably more expensive government workers to contract jobs. The U.S. is concerned that having contractors doing government jobs may affect the source selection process and skew it to certain companies. The U.S. civil service work force has also convinced itself that contractors are inherently more expensive and are thus bad.
If the U.K. was to go through with this proposal it would make for an interesting experiment. There would be a chance to make a direct comparison of the two work forces and whether one is better and cheaper. It will be difficult for this to happen as there will be some institutional and political resistance. The U.S. Congress, especially the Democratic controlled one, certainly favors the government workforce over contractors and there will be those politicians in the U.K. with similar feelings. It would also be hard to transfer all of the responsibility and jobs to non-government. Some of the decisions would have to be such as contract award selections by government representatives. This perhaps could be passed to senior politicians or military officers if there was no empowered civil servant.
The contrast between the two approaches by governments with similar philosophies in this area is interesting. Will eventually the financial problems that the U.S. face make it go this path as well? There may come a time when more government processes are outsourced although Obama intends right now to bring some that have already been back into the government.