Defence Procurement

John McDonnell Excerpts

Tuesday 10th December 2013 Commons Chamber

[Mr Hammond]

I am grateful to my hon. Friend—someone who, again, knows something about this from his long service in the Department. The key distinction is between a model that puts the private sector in day-to-day leadership of the organisation—working on an incentivised fee that places it at risk—and a model where the private sector provides specific skill sets to civil service decision makers. That is the distinction. What we envisage in the DE&S plus model is probably three separate contracts; one to provide us with programme management support, a spine for the organisation; one to provide us with HR support, an area of particular weakness in DE&S; and a task-and-finish project to install some additional financial control systems within the organisation.

[John McDonnell (Hayes and Harlington) (Lab)]

I said on Third Reading of the Defence Reform Bill that having one bidder stretched the concept of competition to absurdity, so I welcome today’s decision. However, there are 16,000 workers whose futures are still vulnerable following the Secretary of State’s statement. May I suggest that it is not just about bringing in expertise; it is about retaining expertise and skills as well? I would welcome the Secretary of State personally meeting the unions to assure them that, under his new proposals, there will be no detriment to their conditions of service.

[Mr Hammond]

I have personally met the unions and I am aware of their concerns. I have also explained to them the opportunities that this model will create for employees in DE&S. The core DE&S—that is to say the part of the organisation that is responsible for procurement —has about 9,500 people. The hon. Gentleman is absolutely right to say that one of the big challenges at the moment is retaining the highly skilled people. We are losing people to the private sector; worse, we are losing people to other parts of the public sector that have greater freedom to hire. That is why we must address this issue in the way I have outlined today.