Westminster blog

A cloud is hanging over one of the government’s biggest privatisations.

The £6bn proposed PFI deal for the search and rescue helicopter service has taken a highly unusual turn. It could have big implications for not only the service, but how such negotiations are handled in future.

Philip Hammond told the Commons yesterday that talks have been abruptly halted — hours before a planned announcement to proceed — after the private Soteria consortium disclosed a “possible issue” to the Ministry of Defence.

Whitehall figures told us that the “issue” is a possible breach of propriety on bidding rules. In other words, this is about standards of conduct, rather than problems with fundamentals of the deal (price, debt etc).

Most of the details remain secret — indeed some ministers and senior people involved with the negotiations are still in the dark. This is certainly a story to watch carefully over the coming weeks.

A big announcement is about to be made by the Ministry of Defence.

Bernard Gray — the former Labour adviser and author of a high profile report into defence acquisition — will be taking over as chief of defence materiel.

This ends a year long search to fill the most important procurement post in the MoD and brings an iconoclast into the heart of Whitehall’s most dysfunctional department.

Gray’s scathing report, published last year, went down very badly with the MoD old guard. Indeed some people joke that his arrival as CDM may spark an exodus that will solve the MoD’s headcount problem.

There is no doubt that this is a strong signal of intent from Liam Fox and David Cameron. Change has arrived at the MoD, whether the officials like it or not.

Gray has a lot on his plate. There are hundreds of contracts to cancel and renegotiate, tough efficiency targets to reach and a reorganisation to oversee that will shed some 25,000 civilian staff.

Jim has reported on the cool response from ministers to Sir Gus O’Donnell’s unsolicited paper on contingency measures if the economy takes a turn for the worse.

But O’Donnell is not the only Whitehall knight taking a hit today from MPs.

Sir Bill Jeffrey, who was until recently Britain’s most senior defence official, has also been ticked off over his handling of the aircraft carrier decision.

The Public Accounts Committee takes the highly unusual step of criticising him by name for failing to request a “letter of instruction” from his minister before signing the “unaffordable” aircraft carrier contract.

They conclude he did not “discharge his responsibility” as accounting officer. In plain language, it means he failed in his duty to protect value for money.

The Electoral Commission have joined the data dumping fiesta today with the release of all the spending receipts from the 2010 election campaign.

There are thousands of pages of to work through, ranging from balloon purchases to contracts for the big ad agencies.

While we work through those, the commission have done a decent job or representing the major trends in this chart. Note how comprehensively outspent Labour were in 2010, particularly on the advertising front. While the spending on leaflets was roughly comparable, the Tories spent almost seven times as much on ads.