Better Defence Acquisition

Bernard Jenkin Excerpts

Monday 10th June 2013 Commons Chamber

[Mr Hammond]

As my hon. Friend knows, the TUPE transfer of an enterprise does not imply any reduction in job numbers at the outset. It is true that a private sector partner taking on a work force of this nature will, over time, look to reconfigure the shape of the work force to make the business as efficient as possible. However, it will have to do that within the constraints of the TUPE regulations, normal employment law and the arrangements that are in place for negotiation with the trade unions.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I thank my right hon. Friend for his statement and for the White Paper, which will be of great interest to the Public Administration Committee because it is conducting an inquiry into procurement across Government, including defence procurement. I remain to be convinced that a GoCo is the right idea. If, as he says, the objective is to be able to recruit and reward staff at market rates, why can we not legislate to do that in the Ministry of Defence, instead of contracting it out? After all, is not the acquisition of defence matériel and equipment a core function of the Ministry of Defence? We must have those skills in-house, because we cannot expect to manage them in some arm’s length contractor.

[Mr Hammond]

My hon. Friend says that he remains to be convinced; I am glad to confirm that I remain to be convinced. It is exactly the point of the assessment phase to convince us collectively that this is the right way to go. This proposal is about being able to employ staff at market rates, but that is only a small part of the total challenge. There are many other cultural and behavioural changes that need to be delivered to make it work. He is right that defence procurement is a core function. That is why we will maintain a competent customer function in the MOD, led by the Chief of Defence Matériel and supported by an external private sector consultant to build the intelligent customer function, to ensure that we are in a robust position to manage the GoCo contractor, if that is the route that we choose, not just now but through future evolutions of the GoCo and future appointments of GoCo contractors.