LONDON — The top civil servant in Britain's Energy Department is moving over to the Ministry of Defence as its new permanent secretary, the government has announced.

Stephen Lovegrove, the permanent secretary at the government's Energy and Climate Change Department for the past three years, replaces John Thompson, the official credited with sorting out the MoD's chaotic finances during his tenure.

The Conservative government announced Thompson's departure last month. He will head up the government's tax and revenue department.

"I look forward to getting to grips with its [the MoD] many challenges, not least implementing last year's strategic defence and security review," Lovegrove said in a statement.

One consultant, who asked not to be named, said Lovegrove will face a major challenge to avoid an overheated budget in the next couple of years.

"The priority issue for him is the budget and the funding of the capability aspirations included in the strategic defence and security review (SDSR) last November. Actions to keep the budget in balance could bite during the financial year 2017-18," he said.

The permanent secretary is the department's most-senior civilian official. The role includes leading the department on finances, policy and planning.

He has had several jobs in government including a stint as chief executive of the Shareholder Executive – the department that manages government-owned or part-owned businesses.

Prior to joining the civil service he was the managing director in the corporate finance department at Deutsche Bank .

Defence Secretary Michael Fallon said he would work with Lovegrove to "implement the SDSR and make defence more innovative."

One former senior official, who asked not to be named, said it was important the MoD's new permanent secretary recognized the department was not a business.

"Given his background, he has to remember that the MoD is not a business. It is an absolute that, while controlling the budget is essential, he has to recognize that the key is value for money in delivering our national security, not paring security to fit a financial ideal, like Procrustes. We know what happened to him," he said.

No date has been announced for Lovegrove to take up the new appointment.