Safeware. I too would be interested to know what the risks were. I simply relayed the gist of what the man said.
Casting my mind back to the last Century, my Group used a Service Level Agreement with DRA/DERA for the re-lifing of oil, grease, paints, adhesives, sealants and rubber items. As an Agency, they made charges for the service but no money crossed budgets. The plan seemed to be that, after achieving full Agency status (or privatisation), the Budget covering those charges would be disaggregated to the User, to then include them in LTC/STP bids. If DERA charged, say £1,000 (a silly sum only used as an example) an hour for the work, it didn't matter as the money would be passed across to cover it. It was also an internal MoD accounting process that drained nothing from the Defence Budget other than the true cost. Now, if the costs were artificially inflated, it wouldn't matter; so long as DERA or Quinyquick remained part of the MoD. Once outside (or 80% of it) the MoD, though, that inflated cost would be very lucrative and protected by the precedent of already being an agreed charge. There were no acceptable Contractors we could use for that function anyway. Early this Century, I moved on to other things so don't know if the funds were ever disaggregated. None of it sounded very risky.
I still find it interesting that none of the profit making members of the management Board were career Civil Servants.