Prospect • DefenceEye – D

ecember 2013

THE DEFENCE Equipment and Support organisation will not be privatised, the defence secretary announced on 10 December.

Prospect, which said all along that the idea was half-baked, welcomed the announcement which it said was inevitable.

Instead, DE&S will become a “bespoke central government trading entity”, operating at arm’s length from the MoD with new “significant freedoms and flexibilities, agreed with the Treasury and Cabinet Office, around how it recruits, rewards, retains and manages staff.”

Prospect national secretary Steve Jary said: “It is truly astonishing that the Treasury would have preferred to contract out control of the UK’s defence procurement rather than give DE&S the flexibility to pay its highly-skilled staff properly and hire and retain people with the right skills and experience.”

The defence equipment programme accounts for about 45 per cent of the total defence budget. DE&S employs approximately 16,000 people – one third of them military officers – and is based in Abbey Wood, Bristol.

The government considered two options for DE&S: a private sector led Government Owned, Contractor Operated ‘GOCO’ model; and a fully

funded, restructured version of the current organisation, staying within the public sector, known as ‘DE&S+’.

A team led by Denver-based CH2MHill, and including Serco, decided it could not reach the commercial targets that the government required. The Materiel Acquisition Partners consortium – led by another US engineer, Bechtel – was the only party interested in running DE&S.

Philip Hammond said the potential benefits of privatising DE&S in “one leap are now outweighed by the risks.”

“The Treasury and the Cabinet Office need to take out their ear plugs and listen to what organisations across the civil service are saying: we can’t recruit and retain the specialists we need because of your inflexibility

on how people are employed and managed,” said Jary.

Just days before the announce-ment, Lord Levene, the former MoD permanent secretary who advises government on defence reform, said reform was held back by “civil service policies that inhibit the ability to pay the market rate for challenging jobs, and to ‘hire and fire’ flexibly.” See http://bit.ly/defence_reform

In an interview with Civil Service World, Lord Levene said a few top experts should be recruited to help train DE&S staff to “negotiate with the most senior people in the largest companies in the country and around the world” – a capability that currently “just does not exist within the civil service”.

Levene also told CSW that repeatedly blaming civil servants for delivery failure in public is “utter nonsense”. He challenged claims by Francis Maude, minister of the Cabinet Office, that there is a “bias to inertia” in the civil service.

■ The House of Commons defence select committee took evidence from secretary of state Philip Hammond, and Bernard Gray, chief of defence materiel, on 12 December. Read or listen to the evidence at http://bit.ly/defence_committee.

■■ TIMELINE:■page■8

DEFENCEEYEProspect■members■in■the■defence■industry

www.prospect.org.uk • Issue 3, December 2013

I FIND A WAY THROUGH …KATE MORAN, an operational analyst for the Defence Science and Technology Laboratory (Dstl) in Salisbury, Wiltshire, is a Prospect Pioneeer – one of the union members featured in a 2014 calendar celebrating the success of women in male-dominated industries.

“I look at questions like what the Ministry of Defence will need in the future,” she says. “What I found hardest about this job was working in a military culture. I was quite shy and easily intimidated when I first started. But working in this environment has helped me and given me a different perspective. If I’m in a meeting with five military officers and they're not listening, I simply have to find a way to get through to them.”

■ Order online at http://bit.ly/inspire_stem or contact sherri.hoppen@prospect.org.uk

Government pulls plug on procurement privatisation

Lord Levene: Blaming civil servants for delivery failure in public is ‘utter nonsense’

Why we must unite on skills2014 WILL be a key year for developing and supporting skills across the defence sector, says Prospect deputy general secretary Garry Graham

PAGE 6

JASON

ALDEN

/REX

LEON

ORA SAU

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Prospect • DefenceEye – D

ecember 2013

2 PENSIONS

Regulators agree steps to improve DC pensionsTHE OFFICE of Fair Trading has secured agreement with the industry and the Pensions Regulator on steps to tackle problems in the defined contribution workplace pensions market.

These include: ● Dealing with old and/or high-

charging contract and bundled-trust schemes – The Association of British Insurers and its members have agreed to an immediate audit of these schemes, aimed at ensuring savers are getting value for money. This will be overseen by an independent project board.

● Dealing with issues with small, trust-based schemes – The Pensions Regulator has agreed to take rapid action to assess which smaller trust-based schemes are not delivering value for money. The Department for Work and Pensions has agreed to consider whether the regulator needs new enforcement powers to tackle the problem.

● Improving governance: To address the OFT’s concerns about lack of independent scrutiny of contract-based schemes, the ABI has agreed that its members will establish independent governance committees.

These should recommend changes to providers and escalate issues to regulators where they see risks of poor outcomes for savers. The OFT recommended that the government should establish a minimum governance standard to apply to all pension schemes.

● Improving the quality of information available on costs and charges – The OFT recommends that the DWP should consult on improving the transparency and comparability of information about the charges and quality of schemes to make employers’ initial choice of scheme easier. This should include whether providers could disclose a single annual management charge and investment transaction costs.

● Preventing future risks of detriment: The OFT recommends that the DWP should consult on preventing schemes being used for auto-enrolment that contain in-built adviser commissions or that penalise members with higher charges when they stop contributing into their pensions.

■ Download a comprehensive briefing on the OFT study from http://library.prospect.org.uk/id/2013/01591

New Fair Deal widens scope of protectionA REVISED policy on protecting members’ pensions when their public sector organisations are privatised came into effect from October.

‘New Fair Deal’ allows members whose jobs are privatised to retain membership of the civil service or other public sector pension schemes. The revised policy can also apply to workers whose jobs were privatised in the past.

Prospect pensions officer Neil Walsh said: “The protection for members’ pensions on privatisation, previously delivered by a policy known as ‘Fair Deal’, was under threat when the coalition government decided to consult on its future.

“However, as a result of the pensions day of action in November 2011, not only is protection for pensions on privatisation retained, it has actually been enhanced.

Members will be able to continue

in the civil service pension scheme after privatisation for the first time.”

The Treasury has produced guidance on how the protection will work in practice.

Broadly speaking, members will remain eligible for membership of the civil service pension scheme as long as they are mainly engaged on the contract that was privatised.

There is discretion to retain access to the scheme if members are transferred to another contract that also came from the public sector.

Walsh added: “Every privatisation will involve work from Prospect to ensure that ‘New Fair Deal’ is applied fairly in members’ interests. Prospect is working on guidance for negotiators and reps who will deal with these situations to ensure they are equipped to represent members.”

‘New Fair Deal’ can also have implications for workers already

in the private sector who were privatised in the past.

Currently they often have access to a broadly comparable pension scheme.

Under ‘New Fair Deal’ many will be brought back into the civil service pension scheme when the contract they work on is retendered.

However there could be uncertain consequences for some, for example where broadly comparable pension schemes have diverged from the public sector schemes that members were originally part of.

Walsh said: “While restored access to a public service pension scheme will benefit many, Prospect will monitor the implications rigorously to ensure that members are not inadvertently disadvantaged as a result.”

■ www.gov.uk/government/publications/fair-deal-guidance

PENSION UPDATES ■ Prospect response to Department for Work

and Pensions consultation on charges: http://library.prospect.org.uk/id/2013/01651

■ Prospect response to consultation on increases to PCSPS contribution rates from April 2014: http://library.prospect.org.uk/id/2013/01700

■ Petition supporting a cap on pension charges http://www.which.co.uk/campaigns/pensions/track-our-progress/

■ Prospect briefing note on the implications of Scottish Independence on pensions – please email jackie.moonan@prospect.org.uk for a copy.

■ Introduction to pension tax relief system as at December 2012, Prospect briefing note: http://library.prospect.org.uk/id/2013/01392

■ Prospect submission on the Treasury’s New Fair Deal guidance: http://library.prospect.org.uk/id/2013/01206

QINETIQ BRIEFINGPROSPECT PENSIONS officer Neil Walsh has produced a briefing for members in QinetiQ. It answers questions about the closure of the defined benefit section of the QinetiQ pension scheme. Download the briefing from http://library.prospect.org.uk/id/2013/01739

■■ You’re■never■too■young■to■start■thinking■about■your■pension.■Apprentices■at■the■launch■of■a■shipbuilding■campaign■at■the■BVT■shipyard■in■Govan,■Scotland,■on■the■Clyde■in■2009

ALAN W

ILEY

Prospect • DefenceEye – D

ecember 2013

3UNION EFFECT

RECRUITMENT RESOURCESFROM REFRESHING your noticeboard to promoting the union’s career development work, Prospect has a range of resources to help you with workplace campaigns.

Have a look at the website (http://bit.ly/recruit_resources) and order hard copies from central.services@prospect.org.uk.

You can also contact your local organiser for help and support – find their details at http://bit.ly/prospect_organisers

Unions protect against recessionEMPLOYEES IN workplaces that recognise unions are ‘significantly less likely’ to have been adversely effected by the recession, a survey has revealed.

The Workplace Employment Relations Survey – conducted for government by the National Institute of Economic and Social Research – also found that one in five companies not adversely affected by the recession still froze or cut pay.

Redundancies and pay freezes in the public sector have led to perceptions of job security plummeting, along with trust in managers, the survey says.

But the good news is that unions are generally holding their own across the economy, with the percentage of members and the extent of their coverage virtually unchanged since 2004.

Unions have also improved their membership in larger companies – from 44 per cent of employees in 2004 to 50 per cent. This is seen as significant because larger firms account for more than half of all employees in the private sector

TUC general secretary Frances O’Grady said the survey had revealed the degree to which opportunistic employers used the recession as an

excuse to hold back pay. “This kind of behaviour deepened

the recession and pushed working people into poverty unnecessarily. A swift return to real pay growth is now urgently needed if the emerging signs of growth are to be shared by everyone,” she added.

“It’s reassuring to learn that unions have held their own and were able to help working people get through the worst economic storm in living memory.”

The challenge in coming months would be to take unions into new workplaces and parts of the economy where membership is rare.

“We need to make life fairer at work and ensure that top earners do not leave ordinary families behind. We can only do that if we have a strong and vibrant union movement which gives a voice to the interests of working people.”

■ See: www.tuc.org.uk/campaignplan

■ The Health and Safety Executive recognises that “workplaces where workers are involved in taking decisions about health and safety are safer and healthier workplaces”. Read about the union effect on health and safety at http://bit.ly/union_effect

PROSPECT GENERAL SECRETARY Mike Clancy, national secretary Alan Leighton and negotiator Bob King visited the Royal Navy Submarine Museum in Gosport, Hampshire in November. They are pictured in front of HMS Alliance, the only surviving British World War II era submarine. Volunteers from the local community are involved in saving the submarine. www.submarine-museum.co.uk

PAUL CARTER

Prospect • DefenceEye – D

ecember 2013

4 PORTSMOUTH

Prospect demands joint drive for job guaranteesBAE Systems is seeking volunteers for redundancy at its Portsmouth shipbuilding facilityBAE SYSTEMS, trade unions and politicians should work towards guaranteeing a job in Portsmouth for anyone who wishes to stay within the business, Prospect has told the company.

The union was speaking after BAE Systems announced the loss of more than 900 jobs with the closure of its shipbuilding facility in Portsmouth.

The company said in November that no compulsory redundancy notices will be issued before the end of January 2014.

This is to allow staff from across its businesses in Portsmouth to apply for voluntary redundancy.

Prospect has welcomed this voluntary window and the opening up of the scheme beyond the naval ships business.

All those at risk of redundancy will receive a personalised quote outlining their entitlements. Anyone who is

not at risk, and working in naval ships or maritime services, can request a redundancy quote.

The BAE scheme – three weeks’ pay for each year worked, up to a maximum of 78 weeks – will apply to anyone who volunteers.

The unions expressed concern that failing to offer contractual terms for

former civil servant may inhibit some people from volunteering, freeing up fewer posts in the services business and failing to mitigate job losses in naval ships.

Prospect will continue to assert that contractual terms should apply during the voluntary redundancy window.

Negotiator John Ferrett said: “The unions are open to working with any business prepared to take on work within the naval base or to set up a new operation on the shipbuilding footprint.

“Ultimately we want, and our members deserve, long-term job security. Prospect wants jobs that fully use their skills rather than piecemeal, insecure and low-skilled employment.

“This is the least they should expect, given their service to the UK shipbuilding industry over many years.”

Give Portsmouth fair share of shipbuildingSHIPBUILDING IN the UK can be sustained at three yards, Prospect told defence secretary Philip Hammond in November.

The union wrote to the Hammond after BAE Systems announced its intention to close the shipbuilding facility in Portsmouth with the loss of more than 900 jobs.

Prospect negotiator John Ferrett said: “We believe Portsmouth should be given a fair share of shipbuilding work.

“Retaining work on the aircraft carriers, instead of transferring it to the Clyde, will help to sustain Portsmouth in the short term.

“Furthermore, by awarding one of the three proposed off-shore patrol vessels to Portsmouth, the dockyard can maintain a minimum level of capability before the work on the carriers arrives.

“By adopting this plan, the government will ensure that a naval shipbuilding capability is maintained

in England and that skilled workers are retained in Portsmouth.”

Ferrett said the decision to close Portsmouth a year ahead of the Scottish referendum was “not only illogical, but dangerous in terms of the UK losing sovereign shipbuilding capability.”

Prospect asked to meet the minister to discuss “how we can avoid what is likely to be an economic catastrophe for Portsmouth if no action is taken.”

■■ Prospect■negotiator■John■Ferret■(with■microphone)■at■a■rally■in■Portsmouth■in■November

WHAT IS PROSPECT DOING?PROSPECT WILL:

● continue to consult BAE Systems to ensure compulsory redundancies are avoided and alternative roles found for members

● press for clarification on pensions, not least the impact for members who are part of the VT ring-fenced section of SIPS

● use the consultation period to ensure that BAE Systems

keeps members fully informed of any alternative roles within the business and that everyone is given a fair opportunity to apply for these jobs

● seek to protect current terms and conditions for members who move to another part of the business

● continue to make the case for maintaining a shipbuilding capability in Portsmouth.

‘Our members deserve long-term job security. This

is the least they should expect, given their service

to the UK shipbuilding industry over many years’

Prospect • DefenceEye – D

ecember 2013

5NEWS

Help for professional engineers seeking jobsTHE TALENT Retention Solution puts skilled people looking for work and companies searching for new employees in contact with each other.

It is a not-for-profit, UK-wide platform to retain skills in the advanced manufacturing and engineering sector, including

aerospace, automotive, civil engineering, defence, energy, marine, nuclear, power generation and renewable industries.

Once your details are on the TRS system you will have access to thousands of jobs.

At this stage, several hundred employers can view your profile – names are anonymised unless you attach a CV. Employers get to know more about you only when you apply for a job or they express an interest in you and you decide to respond.

It takes just a few minutes to register at www.talentretention.biz

■ More background is available on the Prospect website: http://bit.ly/trsprospect

■■ Prospect■negotiator■John■Ferret■(with■microphone)■at■a■rally■in■Portsmouth■in■November

PICTURES: STEFAN

O CAG

NO

NI

RESOURCESProspect’s Members’ guide to redundancy – download the guide from http://library.prospect.org.uk/id/2010/01156.

Moving on – don’t forget, you don’t have to leave Prospect if you are changing jobs or looking for work. Download our moving on leaf-let from http://library.prospect.org.uk/id/2010/00847

Prospect • DefenceEye – D

ecember 2013

NEWS6

employment without agreement is totally unacceptable to Prospect and is not in our agreed procedures with the company,” said Tabbner.

“This is a fundamental issue for our members and one that we should be prepared to defend collectively and by any means necessary.”

MANAGEMENT AT Serco Marine has climbed down on proposals to reduce the workforce at Portsmouth, after Prospect took legal advice.

The employer said it would suspend the proposals from current negotiations with unions “until 2016 or when the Queen Elizabeth Class aircraft carriers enter service in Portsmouth, whichever date is sooner”.

Prospect negotiator Richard Tabbner said: “Normally this would be good news for our affected engineer and other grades, but this is only a temporary stay of execution.”

The most worrying development was that the employer had intended to bypass collective bargaining by making affected members of staff sign a new contract of employment. This would have allowed the employer to implement their de-manning proposals.

Serco Marine told workers who refused to sign a new contract of employment that they would “implement dismissal and re-engagement, giving appropriate notice up to a maximum of 13 weeks”.

Prospect wrote to the employer warning that if it continued on this course of action, the union would ballot all members nationally on industrial action.

The letter added that Prospect rejected the proposals to reduce the workforce and also reserved the right to ballot if the job cuts were implemented in the future.

“Changing contracts of

Why we must unite around skills2014 will be a key year for developing and supporting skills across the defence sector, says Prospect deputy general secretary Garry Graham

A HEALTHY and thriving defence industry is important for national security and makes a fundamental contribution to the success of the UK economy.

Developing and supporting skills is going to become increasingly important, as is attracting high-quality entrants to the industry.

The practical reality is that

there is going to be fierce competition for engineering, scientific and specialist skills from other parts of the economy.

Some of this competition will come from the energy generation and supply industry as well as nuclear. While these industries face similar challenges, they are more advanced in identifying their

skills needs and developing industry-wide solutions.

The defence sector could learn from industries where employers are working cooperatively – identifying gaps, agreeing common standards and developing training solutions.

It has been interesting that companies who compete with each other in the commercial

arena are recognising the need to work together on skills and the benefits this can provide.

I have detected a desire among some private sector employers and the Ministry of Defence to think differently about skills and an appetite for more collaborative working. Discussions are at an early stage – but the will is there for a more strategic approach.

Prospect can make a valuable contribution to developing the skills agenda and encouraging maximum participation.

18,112Typhoon and Typhoon Future

Capability Programme

J

3,268A400MA

BCDEFGH

I

5,348Queen Elizabeth

Class Aircraft Carrier

12,266Future Strategic Tanker Aircraft

(Voyager)

7,204Astute Class Submarine

MAJOR EQUIPMENTPROJECTSCost in £ million

A – Joint Combat Aircraft (Lightning II) £2,200 mB – Lynx Wildcat £1,663 mC – Specialist Vehicles £1,394 mD – Warrior Capability Sustainment Programme £1,319 mE – Beyond Visual Range Air-To-Air Missile (METEOR) £1,122 mF – Chinook New Buy and Project Julius £1,121 mG – Merlin Capability Sustainment Programme £791 mH – Complex Weapons (Spear Cap 2, Block 1, and FLAADS) £783 mI – Airseeker £634 mJ – Falcon £349 m

Cuts suspended with a stingSO

URCE: M

AJOR PRO

JECTS REPORT

5,556Type 45

Destroyer

Prospect • DefenceEye – D

ecember 2013

NEWS 7

Acquisition, infrastructure and corporate services: In each case a central problem has been civil service policies that inhibit the ability to pay the market rate for challenging jobs, and to ‘hire and fire’ flexibly. In my view, the apparent rigidity of these policies is a major barrier to delivering value-for-money.

Lord Levene, Defence Reform, Second Annual Reviewhttp://bit.ly/defence_reform

£10,000 boost for MOD nuclear staff THE TREASURY has approved a Ministry of Defence request to increase the allowances paid to suitably qualified nuclear staff.

MOD said this was “a significant development and a very welcome step to addressing the skills vulnerabilities in the defence nuclear community”.

As part of the 2013 pay deal, MOD ringfenced 0.5 per cent of the non-consolidated pay bill to address recruitment and retention difficulties.

Under the old system, nuclear suitably qualified and experienced personnel (NSQEP) civilian staff in MOD who were assessed to have level 1 (awareness), level 2 (practitioner) or level 3 (expert) competence were eligible for an allowance of £2,000 a year.

Under the new recruitment and retention allowance, MOD civilian NSQEP assessed to have level 2 or 3 competence and fill a post with those

requirements will be eligible for an allowance of £12,000 a year.

Those assessed at level 1 competence, who are filling a post requiring that, will be eligible for an allowance of £4,000 a year.

Both allowances are pensionable. However the onus is on individuals to apply for it. Prospect told MOD that it should be for management to identify those who are eligible.

National secretary Steve Jary said: “We have been working to enhance the sustainability of the MOD’s cadre of nuclear specialists for three years now and, while it has taken far too long, we welcome the MOD’s proposal to recognise that its pay rates are uncompetitive.

“Prospect’s MOD group council considered the MOD’s offer in early December and we will be responding to ensure the payments are implemented as soon as possible.”

PROSPECT CONDEMNS QINETIQ PAY SECRECYA PROSPECT survey of pay increases for QinetiQ staff highlighted significant differences in how awards were distributed across divisions of the company, particularly in three larger divisions – air, maritime and weapons.

QinetiQ refused to reveal the distribution of pay awards, even to the ‘employee engagement group’. Staff have also been told that: “QinetiQ does not expect open discussion of salary increases.”

Prospect national secretary David Luxton said: “This culture of secrecy is not conducive to team working and openness and can be corrosive in an organisation where co-operation is required across teams and disciplines.

“The consequences of union derecognition are becoming ever more apparent as the company seeks to draw a veil of secrecy over pay, with no scope for negotiation or challenge.”

The Equality Act 2010 says that employers cannot prevent their employees from making a ‘relevant pay disclosure’ to anyone, or prevent them from seeking such a disclosure from a colleague for the purposes of finding out whether there is unlawful pay discrimination. See http://bit.ly/pay_secrecy

Prospect is working hard to prepare the ground to restore union recognition and give QinetiQ employees an independent voice at work. You can send messages of support to qinetiqbranch@prospect.org.uk.

Why the civil service needs an independent pay reviewThe Prospect Pledge campaign is asking MPs, members of the Scottish Parliament and Welsh Assembly members to back an independent review of specialist pay in the civil service.PROSPECT SPELT out the benefits of such a review in a letter to the director of civil service workforce reform, William Hague. The union said an independent review could include opportunities to:

● decouple specialists’ pay from short-term political constraints

● consider objective evidence of pay rates for specialists across the economy

● align specialist pay to the challenges the service will face in the future

● build specialists’ confidence in their pay arrangements – both pay rates and progression systems – to start to repair damaged morale and

address recruitment and retention problems

● break down obstacles associated with fragmented pay systems which inhibit the movement of specialists across the service

● help build genuine professional communities as a route to enhance knowledge and skills across the service

● make the civil service an enduring employer of choice for specialists.

■ You can read Mr Hague’s reply at http://library.prospect.org.uk/2013/01673. Find out more about the pledge at http://bit.ly/brain_drain

■■ Alison■Seabeck,■Labour■MP■for■Plymouth■Moor■View,■at■the■launch■of■Prospect’s■Pledge■campaign■at■the■House■of■Commons■in■November

STEFANO

CAGN

ON

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Prospect • DefenceEye – D

ecember 2013

8 PRIVATISATION

Published by Prospect, New Prospect House, 8 Leake Street, London SE1 7NN

DefenceEye editor: Marie McGrath E marie.mcgrath@prospect.org.uk T 020 7902 6615

Printed by: College Hill Press

GOCO MODEL AT DE&S: GOING, GOING, GONE!

Timeline of a U-turn

6 DECEMBER■■ Financial■Times

reports that the MOD has decided to shelve the GOCO option

10■DECEMBER ■ Secretary of state

announces that the government will not proceed with the GOCO

12■DECEMBER ■ Commons defence

committee special session on Materiel Strategy with Philip Hammond and Bernard Gray

20■NOVEMBER ■ Commons third

reading. Procurement minister Philip Dunne describes the withdrawal of one of the two consortia as “regrettable”

19■NOVEMBER■ ■ It emerges that one

of the two consortia has withdrawn

†† The group – led by Denver-based CH2M Hill with Serco and WS Atkins – failed to deliver its second phase bid/proposal by the deadline of Friday 15 November.

Hammond tells Parliament in a written statement: “MOD has received a bid from one of the consortia but the second has decided to withdraw from the competition.

“This is regrettable and the reduction in competitive tension will make it more challenging for the department to conclude an acceptable deal with the remaining bidder, notwithstanding the competition from the DE&S-Plus bid.”

A decision had to be made on “whether it is in the public interest to proceed with only a single commercial bidder and an internal option.”

15■NOVEMBER ■ Second phase of

bidding process due to end

4 OCTOBER ■ Royal United Services

Institute (RUSI) comes out against the GOCO (having been sceptically neutral)

10■OCTOBER ■ Unions write to

defence secretary Philip Hammond to protest about the Ministry of Defence’s refusal to consult on the GOCO plan – allegedly on his instructions

†† What the Government must do in Defence Procurement: The Inherently Governmental Function and the GOCO Proposal for Defence Equipment and Support, by John Louth and Trevor Taylor, suggests that most aspects of defence procurement and contracting for equipment and support are fundamental government responsibilities that should not be passed to others.

■■ Levene■–■greatest■possible■pay■freedom

3 JULY ■ Defence Reform Bill

receives first reading in the Commons

16■JULY ■ Commons second

reading

3 SEPTEMBER■–22■OCTOBER

■ Scrutiny committee – 14 sittings

†† Part 1 of the bill is entirely to enable the establishment of the government-owned contractor operated (GOCO) model at Defence Equipment and Support (DE&S).

■■ Philip■Hammond,■secretary■of■state■for■defence

PA PHO

TOS

21■NOVEMBER ■ Lords first reading.

Former defence minister Lord Lee of Trafford says that the plans to privatise DE&S are “dead in the water”

13■NOV(published 4 December)

■ Defence Reform – Second Annual Review (Lord Levene’s annual report).

†† Levene says:“… a central problem

has been civil service policies that inhibit the ability to pay the market rate for challenging jobs, and to ‘hire and fire’ flexibly. In my view, the apparent rigidity of these policies is a major barrier to delivering value for money…

“In the field of acquisition, a long-running Materiel Strategy has been examining options for the future of DE&S as either a government-owned company or an ‘enhanced’ version of the existing business model (known as ‘DE&S plus’).

“It needs to be brought quickly to a

conclusion to end the current uncertainty and the very considerable demands it is placing on senior management time and effort across defence. In my opinion, the quickest and most straightforward solution would seem to be via ‘DE&S plus’, and this needs to be developed to the very highest standards as a realistic option.

“But it is crucial that it also embraces the greatest possible employment and pay freedoms. I understand that a proposal to this effect is currently with the Treasury, and this has my strong support.”

PA PHO

TOS