Defence Evaluation and Research Agency
The Defence Evaluation and Research Agency (DERA) was a part of the UK Ministry of Defence (MoD) until 2 July 2001. At the time it was the United Kingdom's largest science and technology organisation. DERA was split into two organisations: short-lived transition bodies known as PDERA ("privatised" DERA) which became a commercial firm, QinetiQ, and "RDERA" (meaning "retained" in Government DERA) which became the Defence Science and Technology Laboratory (Dstl).
At the split, QinetiQ was formed from the majority (about 3/4 of the staff and most of the facilities) of DERA, with Dstl assuming responsibility for those aspects which were best done in government. A few examples of the work undertaken by Dstl include nuclear, chemical, and biological research. In the time since the split both organisations have undergone significant change programmes. QinetiQ has increased its focus on overseas research with a number of US and other foreign acquisitions, whereas Dstl has a major rationalisation programme aimed at changing many aspects of its operations.
Formation
DERA was formed in April 1995 as an amalgamation of the following organisations:
- Defence Research Agency (DRA) which was set up in April 1991 and comprised the Royal Aerospace Establishment (RAE); Admiralty Research Establishment (ARE); Royal Armament Research and Development Establishment (RARDE); and, Royal Signals and Radar Establishment (RSRE)
- Defence Test and Evaluation Organisation (DTEO)
- Chemical and Biological Defence Establishment (CBDE at Porton Down), which became part of the Protection and Life Sciences Division (PLSD)
- Centre for Defence Analysis (CDA).
The chief executive throughout DERA's existence was John Chisholm. DERA's staffing level was around 9000 scientists, technologists and support staff.
Flotation
In 2001, when Defence Minister Lewis Moonie announced the creation of QinetiQ, he said that it would remain a British company based in the UK. The Ministry of Defence would keep a 'special share' in the company, and safeguards would be in place to prevent conflicts of interest. In February 2003, the U.S. private equity firm the Carlyle Group acquired a 31% share for £42m. Prior to stock market flotation, ownership was split between the MoD (56%), Carlyle Group (31%) and staff (13%). The Carlyle Group was expected to invest for three to five years, after which a stock exchange float would take place. From 2002 to 2005, former chair of the Joint Intelligence Committee Pauline Neville-Jones was non-executive chairman of QinetiQ.
On 12 January 2006, following financial press speculation concerning a stock exchange float, an announcement was made in parliament by Dr John Reid, Secretary of State for Defence. He said that the Carlyle Group 'will continue to retain a significant stake in the company', and that the government would continue to hold a 'Golden Share' to protect the UK's security and defence interests.
QinetiQ was floated on the London Stock Exchange in February 2006. The company had been valued at between £1.1bn and £1.3bn, with the MoD holding estimated to be worth £616m – £728m, the Carlyle Group's holding £341m – £403m, and staff/management's holding worth £143m – £169m. Controversy was generated by the very large returns for the Carlyle Group and senior managers, with figures of over £20m suggested in the media for Sir John Chisholm.[1]
