Stewart Penney/LONDON
The UK Government is to spin off around 75% of the Defence Evaluation and Research Agency (DERA)and float it on the London stock exchange, while folding sensitive parts of the organisation back into the Ministry of Defence (MoD).
The proposal is a revision of an earlier model, according to which the MoD would have retained control of around one-third of DERA, including "core competencies". The model was widely criticised, with industry, trade unions and DERA sources doubting the viability of the two-thirds being offloaded without key capabilities.
The new model will see the UK Government take a "golden share" in the floated "New DERA", allowing it to impose restrictions on its activities. To retain its impartiality when providing advice to the MoD, New DERA will be barred from manufacturing, while concerns expressed by certain companies over potential damage to their intellectual property will be assuaged through the retention of relevant elements of today's agency within the MoD.
Also to be retained are the Chemical and Biological Defence Sector, the Centre for Defence Analysis, the Defence Research Information Centre and the Defence Radiological Protection Service. The Aircraft Test Establishment at Boscombe Down is, however, among the list of sites under consideration for inclusion in New DERA, despite disquiet.
A consultation lasting until early June will determine whether foreign or individual ownership of New DERA should be capped, and will determine which sites are kept within "Retained DERA". New DERA would be formed early next year, with a flotation shortly after. Chief executive Sir John Chisholm will head the new company, which will take around 9,000 of the agency's 11,500 employees.
The UK's 1998 Strategic Defence Review opted to end central funding of DERA and identified "a public-private partnership" as the best way to raise money.
Source: Flight International