Lord Rosser
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Defence Reform Bill
Lord Rosser Excerpts(10 years, 9 months ago)
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Lord Dannatt (CB)
My Lords, I identify with the comments of my noble and gallant friend. He made many of the points I would otherwise have made. I share his scepticism here. I understand the purpose behind these amendments but I have some concern about seeing them included in a Bill such as this at the present time. On the other hand, I very much welcome the debate on the wider subject.
I just amplify one of the points made by my noble and gallant friend. In the popular mind, so-called “drones”, or “unmanned aerial systems” or “unmanned aerial vehicles”—the name professionally and technically which we have used for many years—are large and operate over great distances. However, within the same overall category come small battlefield UAVs. Some are small enough to be able to look over a hill into a valley beyond and report back to a ground tactical commander. There are reconnaissance and weapons-deploying issues here, and issues of large and small size. Because of that complexity, the issue definitely merits further investigation and debate, with the formation of a wide-ranging piece of legislation dealing with definitions and bringing the whole into a proper regulatory format. For that reason alone, while I recognise the intent behind the amendments, this should be taken forward in a somewhat different way.
Lord Rosser (Lab)
My Lords, I will be very brief indeed. Obviously, views have been expressed about keeping the law and its enforcement up to date with developments in the nature and conduct of warfare. Also, at the back of what has been said there is a desire to know what is going on in our name and what the outcomes have been in relation to the use of some of the unmanned systems to which reference has been made. Certainly I await with interest the Minister’s response.
There seems to have been a general acceptance that this is an issue which should be debated and discussed, although obviously doubts have been raised as to whether, as far as the amendment is concerned, how relevant it is to this Bill. The only comment I would make before concluding and leaving it to the Minister to give the Government’s response is that, of course, as far as concerns the provision of any additional information that there may be, or any developments in the law, whatever is done must be consistent with the national interest and national security.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
My Lords, I am grateful to my noble friends Lord Hodgson and Lady Miller, the noble Baroness, Lady Stern, and the noble Lord, Lord Dubs, for tabling the two amendments in this group. It has enabled us to have a useful and interesting debate about a number of important issues. The Defence Reform Bill deals with the future arrangements for defence procurement and the Reserve Forces, and I think it is fair to say that the debate on these amendments has drifted some way from those issues—a point made by my noble friend. In responding to them, I will try to address the specific effect of the amendments on Part 1 of the Bill, but I shall also set out more widely our position on some of the other issues that have been raised.
Before turning to the detail of the amendments, it might be helpful if I set out the UK Government’s policy on unmanned aircraft systems. I think it is important to use the correct terminology when discussing unmanned aircraft systems, or UASs. The term “drone” is often used, but the word evokes thoughts and images of computer-controlled machines free from human oversight, which is simply not the case. The term “unmanned air vehicle” had previously been used extensively in the UK, but it is no longer aligned with NATO or international thinking, and in the interests of interoperability we have now moved away from using it. Often, the actual level of human involvement is unclear when discussing unmanned aircraft systems and hence it is entirely appropriate that the term “remotely piloted aircraft system”, or RPAS, is also used as it emphasises the reality that a trained professional pilot is in control of the system. UAS and RPAS are the generic terms that define the totality of the components of an unmanned or remotely piloted aircraft together with the other necessary components, including all equipment networks and, most important, personnel.
The UK operates a range of these human-controlled systems principally for surveillance and reconnaissance purposes. There is often a misconception that remotely piloted aircraft systems are autonomous. Again, we have to be careful with the terminology as the word “autonomous” can mean different things to different people and organisations. The Government consider an autonomous system as being capable of understanding high-level intent, a system that is capable of deciding a course of action from a number of alternatives without depending on human oversight or control. Our current and future RPAS will not be autonomous. A military pilot will continue to remain in control of our armed systems, just as they are now. In fact, our current armed RPASs have greater human involvement than our other armed aircraft types. Our Reaper RPAS crews comprise highly-trained pilots, sensor operators and analysts who all make decisions in real time.
The UK currently deploys unmanned aircraft systems in support of operations in Afghanistan and of Royal Navy ships. These systems are predominantly used for intelligence, surveillance and reconnaissance tasks, providing vital intelligence in support of our troops on the ground and our sailors at sea. They provide persistent video imagery for the development of situational awareness in order to conduct planning and to protect our forces. While the sensors are broadly similar to those onboard conventionally manned aircraft, unmanned or remotely piloted aircraft systems have the ability to loiter for longer, building an intelligence picture that significantly enhances the situational awareness of our commanders.
Lord Rosser
“Information to which Schedule applies1 (1) This Schedule applies to information if—
(a) it was obtained by the Secretary of State or the contractor under or by virtue of this Part or otherwise in connection with the carrying out of functions under or by virtue of this Part, or is derived to any extent from information that was so obtained, and(b) it relates to the affairs of an individual or to a particular business.(2) Information ceases to be information to which this Schedule applies—
(a) in the case of information relating to the affairs of an individual, when the individual dies, and(b) in the case of information relating to a particular business, on the earlier of—(i) the day on which the business ceases to be carried on, and(ii) the end of the period of 30 years beginning with the date on which the information was obtained by the Secretary of State or the contractor.Offence of disclosing information2 (1) A person commits an offence if—
(a) the person discloses information, or(b) information is disclosed or lost as a result of the person’s failure to prevent the disclosure or loss through measures taken under sub-paragraph (2), and(c) it is information to which this Schedule applies.(2) A person holding information to which this Schedule applies must take adequate technical and organisational measures against unauthorised or unlawful disclosure of, and against accidental loss of, the information.
(3) Sub-paragraph (1) is subject to paragraphs 4 to 6.
(4) A person who is guilty of an offence under sub-paragraph (1) is liable—
(a) on summary conviction, to imprisonment for not more than 12 months or to a fine not exceeding the statutory maximum (or both), or(b) on conviction on indictment, to imprisonment for not more than two years or to a fine (or both).(5) The reference in sub-paragraph (4)(a) to 12 months is to be read as a reference to 6 months—
(a) in its application to England and Wales in relation to an offence committed before the date on which section 154(1) of the Criminal Justice Act 2003 comes into force, and (b) in its application to Northern Ireland.(6) If section 85(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 comes into force on or before the day on which this Act is passed—
(a) Section 85 of that Act (removal of limit on certain fines on conviction by magistrates’ court) applies in relation to an offence under sub-paragraph (1) on and after that day as if it were a relevant offence (as defined in section 85(3) of that Act), and (b) regulations described in section 85(11) of that Act may amend, repeal or otherwise modify sub-paragraph (43)(a).Disclosure with consent3 (1) Paragraph 2(1) does not apply to a disclosure made with the consent of—
(a) the individual, or(b) the person for the time being carrying on the business (or, where there are two or more such persons, all those persons).Disclosure of information already available to public4 Paragraph 2(1) does not apply to information that has been made available to the public by being lawfully disclosed in circumstances in which, or for a purpose for which, disclosure is not precluded by this Schedule.
Other permitted disclosures5 (1) Paragraph 2(1) does not apply where information is disclosed—
(a) for the purpose of facilitating the carrying out of functions of a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975),(b) for the purpose of facilitating the carrying out by the SSRO of any of its functions,(c) for the purpose of enabling or assisting an authorised person to carry out any of its functions,(d) for the purpose of enabling or assisting a contractor to provide defence procurement services to the Secretary of State by virtue of arrangements mentioned in section 1,(e) to the person from whom the information was obtained or, where that person is associated with one or more other persons, to any such associated person,(f) by a person to whom the information is disclosed by virtue of paragraph (e),(g) under the Freedom of Information Act 2000 where there is a requirement to disclose notwithstanding available defences,(h) in connection with the investigation of a criminal offence or for the purposes of criminal proceedings,(i) for the purposes of civil proceedings,(j) in pursuance of an EU obligation, (k) for the purpose of facilitating the carrying out by the Comptroller and Auditor General of functions, or(l) in anonymised form.(2) In sub-paragraph (1)(d), “contractor” and “defence procurement services” have the same meanings as in Part 1.
(3) For the purposes of sub-paragraph (1)(l), information is disclosed in anonymised form if no individual or other person to whom the information relates can be identified from it.
(4) For the purposes of sub-paragraph (1), disclosures under paragraph 5(1)(a) to (d) and paragraph 5(1)(h) to (k) must be strictly necessary for the purpose, made in confidence and paragraph 2(1) applies to the recipient of that disclosure.
(5) Prior to making a disclosure under paragraph 5(1)(a) to (d) or paragraph 5(1)(h) to (k), the individual or business to which the information relates must be notified of the intended disclosure and must have the opportunity to challenge that disclosure.
Power to prohibit disclosure6 (1) The Secretary of State may by order—
(a) prohibit the disclosure of information to which this Schedule applies;(b) provide that a prohibition imposed by virtue of paragraph (a) is subject to exceptions corresponding to those set out in paragraphs 3 to 5 (other than paragraph 5(1)(g));(c) provide that a person who discloses information in contravention of such a prohibition commits an offence punishable— (i) on summary conviction, with imprisonment for not more than 12 months or with a fine not exceeding the statutory maximum (or both), or(ii) on conviction on indictment, with imprisonment for not more than two years or with a fine (or both).(2) The reference in sub-paragraph (1)(c)(i) to 12 months is to be read as a reference to six months—
(a) in its application to England and Wales in relation to an offence committed before the date on which section 154(1) of the Criminal Justice Act 2003 comes into force, and (b) in its application to Northern Ireland.(3) An order under sub-paragraph (1) may repeal paragraphs 2 to 5.
(4) If section 85(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 comes into force on or before the day on which this Act is passed—
(a) section 85 of that Act (removal of limit on certain fines on conviction by magistrates’ court) applies in relation to the power under sub-paragraph (1)(c)(i) on or after that day as if it were a relevant power (as defined in section 85(3) of that Act), and(b) regulations described in section 85(11) of that Act may amend, repeal or otherwise modify sub-paragraph (1)(c)(i).(5) An order under sub-paragraph (1) is to be made by statutory instrument.
(6) A statutory instrument containing an order under sub-paragraph (1) may not be made unless a draft of it has been laid before, and approved by a resolution of, each House of Parliament.
Authority to inspect measures to protect information7 (1) A person holding information to which this Schedule applies must permit an industry body, acting on behalf of the owner of that information, within six months of the relevant date and subsequently every three years, on reasonable prior written notice and on reasonable confidentiality and other undertakings, to audit and inspect the person’s technical and organisational measures for protecting that information in compliance with this Schedule.
(2) A person holding information to which this Schedule applies must comply with all reasonable requests or directions by the industry body to enable the industry body to verify that the person is in compliance with their obligations under this Schedule.
(3) The industry body must provide a report of its findings on each inspection to the Secretary of State within three months of that inspection. The industry body may publish each report within six months of that inspection and must include with each report any response made by the Secretary of State to that report.”
Lord Rosser
Schedule 2 is referred to in Clause 7 which is very brief and simply states:
“Schedule 2 (restrictions on disclosure or use of information) has effect”.
It is in Part 1, which deals with defence procurement. Clause 38, in Part 2, which deals with single-source contracts, is similarly brief and simply says:
“Schedule 5 contains provision about disclosure of information obtained under this Part”.
In essence, the purpose of this amendment is to seek to replicate, in respect of disclosure of information, the criminal offence provision contained in Part 2 and Schedule 5 on single-source contracts in Part 1 and Schedule 2 in respect of defence procurement. In paragraphs 4 and 5 of Schedule 2, references are made to “unauthorised disclosure” and “unauthorised use” of information but there is no reference to any penalties or implications for disclosing or using protected information. However, in Schedule 5, which relates to wrong disclosure of information obtained under Part 2, on single-source contracts, there is a reference to penalties of imprisonment or a fine.
We do not understand why there is this distinction on unauthorised disclosure of information between Part 1 and Part 2. It is our view that failure to protect protected information from disclosure should be an offence with laid-down penalties. We appreciate the purpose of Schedule 2 in enabling a GOCO to be given confidential information provided by defence suppliers and held currently by DE&S in order to take over the management of existing MoD contracts should a GOCO come into operation.
The Government’s argument for not putting the penalties in Schedule 5 for misuse of confidential information into Schedule 2 appears to be that the Official Secrets Act, along with the GOCO contract itself and the constraints of Schedule 2, will give confidential information given to the GOCO the same protection from disclosure as it has in DE&S today. If there was a misuse of information, the owner of that information could bring an action directly against the GOCO as it can at present against the Ministry of Defence. However, that raises the obvious question of why similar arrangements are not proposed by the Government in Schedule 5 in relation to disclosures of information in respect of single-source contracts.
The information covered under Schedule 2 will include private and commercially sensitive information to which the Ministry of Defence has been given access, outside of a contractual obligation, in circumstances where the owner has a reasonable expectation that the MoD would hold it in confidence and not disclose it to a third party—which, under a GOCO, might be regarded by the owner of the information as including companies that either had been, or might be in the future, competitor organisations.
The Government say that it is not appropriate for a criminal offence to be created for the disclosure of information acquired in the normal course of defence procurement on individual projects and programmes, but that a criminal offence of the disclosure of confidential information provided to the Single Source Regulations Office is justified because the information is highly detailed supplier information and is forward-looking, covering future financial performance, anticipated business plans and planned subcontracting activity.
If that is the argument the Government are going to advance again today, I remain to be convinced by it. Sections of the defence industry have certainly expressed concerns about the prospect of disclosure of their confidential information that would be provided to a GOCO operator in respect of defence procurement contracts and believe that firm penalties are needed to deter such activity. The Government’s argument may be that the information that would have to be provided in respect of single-source contracts is likely to be more commercially sensitive, and thus potentially more damaging if disclosed, than the information provided under defence procurement contracts. However, surely that is something that should be reflected in the decision on whether to prosecute and through any decision of a court on the level of the penalty to be imposed rather than by, as the Government propose, having no provision for any criminal sanction at all in Schedule 2. I beg to move.
Lord Astor of Hever
My Lords, Schedule 2 in its current form is necessary to allow a GOCO to have access to existing confidential information provided by defence suppliers that is held by DE&S so that the GOCO can take over management of existing MoD contracts. If the GOCO does not have access to that information, it will seriously curtail the contracts that GOCO will be able to manage. It will not be able to manage contracts that involve the need to access confidential information provided by a supplier. If the MoD provides confidential information from existing programmes to the GOCO without the protection conveyed by Schedule 2 in its current form, the supplier of the confidential information may claim that the MoD has no legal right to do so. The MoD could seek to negotiate amendments to contracts or obtain licences to supply the necessary information to the GOCO; however, the volume of information concerned, the amount of time and resources required to undertake the negotiations, the costs in licence fees that may be incurred and the possibility of the owner refusing mean that this is not a practical proposition.
Schedule 2 as currently drafted provides protection for owners of confidential information because there are only limited circumstances—essentially where necessary or expedient for defence procurement—when the MoD can share the information with the GOCO. Schedule 2 also provides that the GOCO is then subject to the same confidentiality obligations as the MoD. For example, some of the information the GOCO has will be classified as “UK eyes only”, the classification applied to certain information that cannot be shared with non-UK nationals due to national security issues. The GOCO would not be able to share this information with any employee or parent company that does not meet the nationality requirements.
If the GOCO misuses the confidential information, the owner can bring an action directly against the GOCO in the same manner as it could have done if the MoD had misused the information. This is in addition to confidentiality obligations that the MoD will place on the GOCO through the management services contract. The GOCO will be contractually required to maintain the confidentiality of supplier information and not to disclose it to third parties without the permission of the MoD. The GOCO’s parent companies will be third parties, so the GOCO will not be able to disclose the information to them without the MoD’s permission. The Official Secrets Act will also apply to the GOCO and its staff. The information will therefore receive essentially the same protection from disclosure as it does in DE&S today.
The proposed amendment to Schedule 2 involves deleting the existing schedule in its entirety and replacing it by what is largely a replication of paragraph 2 of Schedule 5, which creates an offence of disclosure of confidential information provided to the Single Source Regulations Office. The creation of such an offence is reasonable in the context where the information is highly detailed supplier information that will be received under the single-source pricing regulations and which suppliers are required to provide by statute. However, the situation is very different from the GOCO situation, and it is not appropriate for a criminal offence to be created for the disclosure of information acquired in the normal course of defence procurement on individual projects and programmes, where any confidentiality is capable of being protected by the GOCO contract coupled with the Schedule 2 constraints. We do not want to create new offences unless it is absolutely necessary to do so. The single-source provisions cover a supplier’s future financial performance, anticipated business plans and planned subcontracting activity. It is highly unusual for the MoD to receive access to information covered by Schedule 5. The offence and tariff proposed is consistent with that applied to other price-regulated industries such as water, utilities, telecommunications and railways. It is not appropriate to day-to-day defence procurement business, which is best conducted as a commercial relationship between the MoD and suppliers.
The new statutory framework outlined in Part 2 has been designed to help ensure that we get value for money on an average £6 billion a year of single-source procurement. Our single-source suppliers can price in the knowledge that they will not be undercut by a competitor—a highly unusual position, and one that is not conducive to getting good value for money. We need to address this, and to do so we need information about a supplier’s actual costs.
Lord Rosser
The arguments that the Minister has advanced in respect of this amendment are the ones that I indicated—fairly accurately—he would advance. I said earlier that I was unconvinced by them, and that remains my position.
Disclosure of information will be a serious matter under Schedule 2, as well as under Schedule 5. Frankly, if wrongful disclosure of information is going to become an issue under Schedule 2, it will begin to strike at the heart of confidence in the arrangements that the Government wish to proceed with in relation to the GOCO. Sections of the defence industry have certainly expressed their concerns about the prospect of disclosure of their confidential information that would be provided under the GOCO arrangements. Unlike the Government, they believe that firm penalties are needed to deter such activity.
I really do not think I have had an explanation of why the arrangements will be satisfactory and deter people from disclosing arrangements under Schedule 2 without any penalties, but those similar arrangements would apparently not be effective if they were included under Schedule 5 in relation to single-source contracts. The main difference to which the Minister has drawn attention is the view that the kind of information that might be wrongly disclosed in relation to single-source contracts would be far more damaging than the kind of information that might be disclosed in relation to defence procurement contracts under Schedule 2. Many in the defence industry think that the kind of information that could be disclosed under Schedule 2 could be extremely damaging to them and do not share the view that only information disclosed under Schedule 5 in relation to single-source contracts could have that effect.
I said in my contribution that I have not had a specific response to that issue. I said that if the Government’s argument was that the information that would have to be provided in relation to single-source contracts was likely to be more commercially sensitive and thus potentially more damaging if disclosed than information provided under defence procurement contracts, then surely that should be dealt with in the decision on whether or not to prosecute—and if there was a prosecution, reflected in the sentence that the court imposed—rather than taking the Government’s view that we will not put any criminal sanction into Schedule 2.
The Minister said that the Government do not think it is appropriate to have a criminal sanction for disclosure of information under Schedule 2. I appreciate that the Minister feels that the Government have given a convincing explanation for that. However, I do not. The Minister indicated what is at the heart of the Government’s decision when he said, “We, as a Government, do not want to keep creating more criminal offences”. That has been the main factor in making this decision. There is an overall reluctance to create more criminal offences, rather than saying that wrongful disclosure of information is a serious matter even under Schedule 2 and that there should be provision for a criminal sanction in Schedule 2 as well as in Schedule 5.
There is obviously a disagreement and difference of view between the Government and the Opposition. I shall withdraw the amendment but we may wish to pursue the matter at a later stage.
Baroness Miller of Chilthorne Domer
I apologise to the Minister but, as the noble Lord, Lord Rosser, does not appear to be going to give an opinion, I would like to ask him a question. His Government were farsighted enough to bring in the Regulation of Investigatory Powers Act—and obviously they were concerned that the legislative framework kept up with technology. Does he support, in principle, the idea behind our Amendment 15 that its reach should be extended to cover visiting forces? In his opinion, is that something that we should aim to do?
Lord Rosser
It was not my intention to intervene in this debate since it seemed to be going on to rather wider issues than strictly covered in the amendment. For that reason, I am not going to go through the specific wording of the amendment and respond to the particular points in it as to where we stand because clearly the issues being raised in this debate go way beyond the amendment and, in my opinion, way beyond the provisions of this Bill.
Lord Astor of Hever
My Lords, these amendments have enabled us to have a debate about a number of issues. The Defence Reform Bill deals with the future arrangements for defence procurement and the Reserve Forces. As with Amendments 10 and 11, which we debated earlier, the issues in this group of amendments go some way from the issues covered by the Bill. Therefore, I will address the impact of the amendments on the Bill, and I shall also try to deal with some of the other issues that have been raised.
First, I turn to Amendment 14 which would require the contractor—the GOCO—to report annually, or more frequently if specified, to the Secretary of State on the technical characteristics, capabilities and use of the equipment and services procured under the provisions of Part 1 and to ensure that anyone who provides defence procurement services to either the GOCO or the MoD provides all the information necessary to enable such a report to be made. Currently, DE&S does not report to the Secretary of State on the details of all equipment and services procured. Procurements are classified on the basis of value, and approvals take place at the appropriate level, with approvals for very high value, novel or contentious procurements elevated to the Defence Council. Where appropriate, DE&S seeks legal assessments of equipment and services procured. An established project management and acceptance process exists for equipment and services with the customer.
It is envisaged that this process would continue to exist under the GOCO arrangements. These arrangements will be agreed in the defence procurement services contract in place between the contractor and the MoD. It is currently not practical or necessary for DE&S to report to the Secretary of State on the details of all equipment and services procured and likewise it will not be practical or necessary for the GOCO to report these details to the Secretary of State.
I turn now to Amendments 15 and 16. The proposed addition to the Visiting Forces Act runs contrary to the purpose of the Act and would impose an onerous and unnecessary obligation on the Secretary of State for Defence. The UK welcomes foreign military personnel from a large number of countries. Their position in the UK is covered by the Visiting Forces Act and the NATO Status of Forces Agreement. Some are here as exchange officers, others for major exercises and some for training and education. This financial year some 3,000 foreign military personnel will have trained in the UK. For example, 65 foreign students are at the Royal College of Defence Studies here in London. Some 80 foreign officer cadets are at the Royal Military Academy Sandhurst and eight foreign officers attend the Royal Navy’s principal warfare officer course at Fareham. These military personnel are so enmeshed into the activities of the UK Armed Forces that a separate reporting mechanism concerning procurement, command and control, and premises and property, is not needed. The amendment is broad since it concerns,
“all premises and property used by visiting forces for defence purposes”.
The Visiting Forces Act and the NATO Status of Forces Agreement do not place foreign forces beyond the reach of UK law. The Act and agreement permit foreign laws and military discipline to apply to foreign military personnel in the UK, but these do not displace UK law. There is nothing unusual or sinister about this, and we require similar provisions for our forces when they are overseas. For these reasons, the Government oppose this element of the amendment. It might be helpful in this context if I clarify that RAF bases are made available to the United States visiting forces under the terms of the NATO Status of Forces Agreement and that USVF personnel in the UK are subject to the provisions of the Visiting Forces Act. I assure my noble friend that the RAF commander takes his responsibilities very seriously, and he receives very substantial training before he takes them on; I have been assured on that point.
With specific regard to oversight of the intelligence activities undertaken at RAF Menwith Hill, this is already provided by the parliamentary Intelligence and Security Committee. The committee does not comment on the details of its work programme, although it does publish information and, when appropriate, occasionally comments in its annual report on visits it has undertaken. I am able to inform noble Lords that the committee has made such occasional visits to the joint UK-US facility at RAF Menwith Hill.
Lord Rosser
My Lords, Clauses 9 and 10 relate to the transfer of employees, and the transfer of property rights and liabilities in the light of the provisions in Clause 1 in respect of defence procurement arrangements. The decision has now been made by this Government that they will not proceed with the GOCO option but will move to a changed DE&S organisation from April.
Can I ask how the Government envisaged a transfer of staff to a GOCO taking place, had they decided to continue to proceed down that road? When the Bill was being discussed in the other place, the government Minister concerned said that the Government were,
“considering a phased transfer by domain, with the initial domain—maritime—transferring two years before the competition for the remaining domains becomes effective. It is likely that the successful contractor for the initial domain will also be in the competition for the other domains and in a strong position to win them, but it is important that we maintain competitive tension to ensure that the contractor puts in a competitive and compelling bid for the other domains. Therefore, we do not intend to give exclusivity rights over those domains to the successful contractor for the initial domain, which opens up the prospect of having different contractors”.—[Official Report, Commons, 10/10/13; col. 252.]
However, a few minutes after that, in the same debate, the same government Minister said that he had had,
“some advice saying that, as drafted, the contract will be for all four domains”—
including the joint domain—
“and that, in respect of competition for the four domains, including the joint domain, after the initial phase is over the subsequent phases will transfer automatically, in the event that the performance of the contractor has been up to speed”.
Having repeated the advice that he had just been given, the government Minister in the other place said:
“Whether that survives negotiation remains to be seen. Maintaining an element of competition before agreeing the transfer of subsequent domains is quite important. We will be negotiating that as we proceed down the track”.—[Official Report, Commons, 10/10/13; col. 253.]
One is left with the impression that the government Minister in the other place was not wildly enthusiastic about the advice that he had received and had just repeated it.
I appreciate that this is somewhat academic, as this Government are not proceeding now with the GOCO, but whether there might have been more than one contractor, and the timescale for the transfer of domains, is an issue of interest for DE&S staff. It would be helpful if the Minister could indicate which of the two versions of the competition transfer arrangements for the GOCO set out by the government Minister in the other place, to which I have just referred, actually represented the Government’s intentions.
The Government are now moving to a new DE&S organisation from this April and are seeking the agreement of the Treasury and the Cabinet Office to provide the new DE&S organisation with greater freedoms and flexibilities to recruit, reward, retain and release staff; freedoms and flexibilities that are considered necessary for the effective and efficient conduct of the business. The Government have said that DE&S requires,
“a high proportion of Project Management, Commercial and Financial expertise as well as engineering and other technical specialities”.
They added:
“These specialist skills have a much higher market value than can be recognised within the civil service pay framework, and it is becoming increasingly difficult to recruit, develop, and retain those with the particular skills needed at all levels of the business”.
There are currently hundreds of posts unfilled within the DE&S organisation. Without the achievement of the proposed greater freedoms and flexibilities, the Government’s view is that the loss of skills and capability in DE&S will continue, reducing the ability of the Ministry of Defence to deliver equipment to the front line.
I appreciate that it is extremely unlikely that the Minister will be able to say any more today about the progress of the discussions with the Treasury and the Cabinet Office than he said two days ago. However, as it will affect the employees of the new DE&S organisation in April, can the Minister say something about the hoped-for timescale of the Ministry of Defence getting the new DE&S organisation fully up and running? Roughly how many of the current vacant posts in the DE&S organisation will be filled, assuming agreement is reached on the new freedoms and flexibilities, and over what timescale will they be filled? Are the current discussions with the Treasury and Cabinet Office about the principle of going outside the Civil Service pay scale, or about the extent to which it will be acceptable to go outside the Civil Service pay scale in the revamped DE&S organisation from April—or are the discussions about both issues?
The Government have said that they are looking for an injection of a significant element of private sector support in the changed DE&S organisation from April. What form will that private sector support take, in what areas of activity and at what cost? Is it a case of the private sector taking over and running some functions, of the private sector acting as consultants, or of people from the private sector coming into posts in the DE&S organisation and becoming employees of the organisation on permanent contracts? Or is it intended that it will be a combination of all three? How long is it expected to take to bring in the private sector support envisaged, and how long is it expected to be before the DE&S organisation from this April will be running and operating as fully envisaged by the Government, with its new freedoms and flexibilities, and injection of a significant element of private sector support?
Lord Rosser
I thank the Minister once again for his detailed response. I would be grateful if he would read in Hansard the points I raised as I think there are one or two questions to which he did not respond. I should say straightaway that I did not expect him to be in a position to respond to them all immediately. He has certainly answered a number of the points, but I would be grateful if he would write to me on those to which he did not respond. I also appreciate his further response in relation to the earlier debate we had on Schedules 2 and 5. I will reflect on the additional information he has just given. I certainly do not intend to pursue the Question that Clause 9 should not stand part of the Bill and I thank the Minister once again for his response.