LONDON — Britain’s top defense procurement official has resigned after little more than two years in the post, and is heading to Abu Dhabi, United Arab Emirates, to run the Etihad Aviation Group.
Tony Douglas, the chief executive at the Defence Equipment and Support organization, is set to stand down at the end of this year, with an internal interim appointment expected while a successor is sought.
The DE&S boss is the highest-paid official in the British government and is responsible for managing the Ministry of Defence’s £15 billion (U.S. $20 billion) a year procurement and support budget.
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Douglas joined DE&S in September 2015 with the remit to push through a transformation program aimed at making the organization more effective and efficient. He had previously been the CEO for the Abu Dhabi Ports company.
Industry executives and others said Douglas couldn’t be faulted for returning to the commercial sector with Etihad, given the challenge and the likely huge salary hike associated with the Etihad post.
However, one executive said that may not entirely explain his departure.
“It looks like he was made a job offer he couldn’t refuse, but his going might have been made easier by the fact he appears to have had a difficult relationship with the MoD’s permanent secretary. Added to that, he may not have wanted to be associated with what could happen in the defense review,” said the executive, who spoke on condition of anonymity.
His departure comes as the British government puts the finishing touches to a mini-defense review, which could result in significant delays and cuts to programs and capabilities in order to balance the defense budget.
Media reports have put the budget over commitment at anywhere between £10 billion and £30 billion over the life of the MoD’s 10-year, £178 billion equipment plan. The MoD only recently agreed to spending plans for the financial year 2017/2018, which began in April.
“Given the budgetary pressures over the next few years, one could question whether Douglas had the resolve and stamina to drive the reform program [at DE&S] in a tough economic climate,“ said Alex Ashbourne-Walmsley, a director at Ashbourne Strategic Consulting in London.
“His absence from most of the recent DSEI exhibition [in London] was surprising given the importance of the event to the MoD and the defense industry,” she said. “This was symptomatic of his wider lack of engagement with the industry and key stakeholders.”
Despite that, the consultant said the departure of the DE&S boss could cause disruption at a time when the MoD needs to focus on program delivery like that of aircraft carriers, the Mechanised Infantry Vehicle, and the Type 26 and Type 31e frigates
”A big leadership vacuum will be unhelpful when the programs are supposed to be operating to a right timescale, “she said.
“There will be annoyance that he’s gone because of the disruption and distraction this will cause, but it did not seem that there was much love lost on the parts of industry and senior MoD officials,” she added.
Defence Secretary Michael Fallon expressed gratitude for Douglas. “I am personally very grateful for the help and support Tony has provided to me personally. ... He is responding to an unexpected opportunity in the private sector, which he has decided to pursue, and I would not want to stand in his way from taking on that fresh challenge.”
Peter Luff, the ex-Conservative government defense procurement minister, said it might take some time to recruit a replacement for Douglas if the appointment is made from the commercial sector rather than internally.
“It could be difficult to find someone of sufficient caliber, even at the present salary,” he said.
Douglas’s salary, including a performance bonus, amounts to £530,000 — little more than a university chancellor in the U.K. these days.
DE&S did not return telephone calls seeking comment.
Douglas is the second senior defense official to leave this month. Early in September, the government’s defense and security export boss, Stephen Phipson, announced he was joining the engineering employers organization, the EEF, as CEO.
Andrew Chuter is the United Kingdom correspondent for Defense News.
