Lord Drayson: Britain's top gun

How the Government's quartermaster-in-chief is banging heads together

Lord Drayson, by his own admission, has just emerged from a mid-life crisis.

The minister for Defence Procurement, in charge of spending billions of pounds each year on updating the tools of war for the British armed forces, gave up his sensible company car when he sold Powderject, his biotech group, for £542m three years ago. Now he drives a super- charged Aston Martin in the British GT Championship and stalks the political jungle of Westminster.

"When I sold the business, I wanted to try new challenges. In motor racing, I just wanted to see if I could do it competitively. It was a change-of-life thing - call it a mid-life crisis," he says with a laugh.

As one of a three-car team competing in the British GT, he turned in his best performance to date in a race at Silverstone last month. Reaching speeds of up to 160mph in his Aston Martin DBRS 9, he crossed the finish line seventh in a field of about 30. "It's just awesome. It's the absolute best thing." And it was a respectable result for someone who only went into motorsport after pocketing £70m from the proceeds of selling Powderject to Chiron, an American rival.

Lord Drayson is equally inexperienced in politics. The first-time minister is now 18 months into the Herculean task of overhauling the way the Government spends its £15bn a year weapons budget.

He had no expertise in the defence industry when he took over a government department notorious for massive cost and time overruns. He had never even been to the Ministry of Defence before taking the job.

Lord Drayson was appointed by Tony Blair to use his experience in business to overhaul MoD procurement and to improve the prickly relationship between the ministry and the arms industry. "I come at the job knowing what it's like to be on the other side of the table. I know what it's like to be accountable to shareholders. So I can say some pretty direct, clear things to industry. They can't bullshit me."

For the ebullient father of five, it was a baptism by fire. Before he could even get his feet under the desk, he became the object of renewed criticism from the Tories and the press. Lord Dray- son may not have huge experience of working for government, but he has first-hand knowledge of the public procurement process. In 2002, the Government awarded Powderject a £32m contract to provide flu vaccines. The deal was controversial because Lord Drayson had made a £50,000 donation to the Labour Party just months before.

Unabashed by the flak flying in his direction, he went on to make further donations to the party totalling £1m. So when Mr Blair announced his appointment to the MoD, the storm of controversy was predictable.

Yet a year and half on, Lord Drayson is making some headway at the MoD. He has streamlined the organisation, merging the logistics and procurement arms into one. And he recently unveiled the Defence Technology Strategy, which takes a venture capital-style approach to new defence technologies.

Industry sources acknowledge there is greater clarity about what the MoD wants, and the quality of dialogue is better. "I am trying to bring a results orientation to the place. I've said to the Commons Select Committee, 'Judge me on results.' 2005 was about getting the strategy right; 2006 was about implementing that strategy; 2007 is when we should see some visible improvements."

The centrepiece of the make- over is the Defence Industrial Strategy, a White Paper published by the MoD last December that laid out a revamped approach to government procurement. Rather than simply buying weapons systems and passing the upkeep and training to the military, the DIS seeks to involve industry in long-term partnerships through the entire life of weapons systems and programmes. Lord Drayson cites a recent decision by Boeing to move some of its technical capabilities to the UK as proof that industry is buying into the DIS.

But big challenges remain. Parliament's Public Accounts Committee issued a scathing report this summer, pointing out that the department's 20 biggest defence projects remain £29bn over budget and a combined 15 years behind schedule. The £3.5bn project to build two new aircraft carriers for the Royal Navy, for example, is years behind schedule. The companies that are to build the ships - BAE Systems, Thales and VT Group - have submitted a bid that is said to be at least £300m beyond what the MoD is willing to pay, causing further delays.

And as the MoD struggles to equip British forces in Iraq and Afghanistan, industry has complained there is not enough money to fund future arms-manufacturing projects.

Shipbuilding consolidation is also an issue, as there are too many suppliers to be sustained by the MoD. But since VT and BAE called off a joint bid for the naval business of Babcock Inter- national earlier this year, nothing has moved. Lord Drayson has, in the past, threatened the players with a loss of business in an attempt to inject some urgency. But now, he says, he has grounds for optimism. "I still want that before the end of the year, and that's not a naive hope."

Other parts of the DIS have also made waves. Lord Drayson is keen to solidify a UK base of technical expertise for certain strategic defence capabilities, such as nuclear submarines. He is less concerned about keeping UK defence champions on home soil, however, which does not go down well in some quarters.

Recent public comments to the effect that he would not be bothered if BAE, the UK's largest defence company, moved to the US caused furore. "We don't get into protectionism," he explains. "We recognise that it is in the interest of this country to have a strong defence industry and to be able to access the capabilities we need for strong defence. Having the most open market is the best way we can do that. We are relaxed about where shareholders live, but we are not relaxed about where the skills and capabilities lie."

Yet for all the headaches, Lord Drayson has taken to politics. "I never expected it to be as adrenalin charged and exciting as it is," he says. "There is nothing quite like standing at the dispatch box to get your heart running."

BIOGRAPHY

BORN 5 March 1960.

EDUCATION BSc in production engineering from Aston University; PhD in robotics.

CAREER

1986-91: managing director, Lambourn Food Company.

1993-2003: co-founder and chief executive of Powderject.

2004: raised to the peerage as Baron Drayson of Kensington.

2005: appointed under-secretary of state and minister for Defence Procurement, and government spokesman for defence in the House of Lords.