Public and Commercial Services Union

31 March 2009

PCS Members in DSDA and the wider defence supply chain will be aware of a number of projects currently ongoing and are quite rightly concerned about their future. In what is complicated picture, the following updates members on what is happening and what our union is doing about it.

DSDA future options

Against a background of Contracting for Availability (CFA) and Competing for Contracts (CFC) and a lack of investment in IT and infrastructure, the DSDA management board decided to pursue a policy of becoming a more commercial trading entity, i.e. a trading fund or gov co.

Members should be aware that for non-industrial staff, trading fund means giving up delegated negotiating rights on pay and terms and conditions, whilst a gov co, or similar means TUPE transfer out of the MoD civil service.

When DSDA was formed, after the Ministry of Defence in-house bid won a competition against two private-sector companies, it was in recognition that MoD civil servants are the best equipped people to do this work with their knowledge and experience and that an enhanced executive agency is the best business model for this.

Furthermore, DSDA was given a five-year review period in order to bed in and prove itself. PCS argued at the time that this was far too short a period, when at the time, other government programmes were given much longer review periods to prove themselves.

A further proposal to look again at DSDA’s agency status was rejected only last year, as it was recognised that the organisation is a critical defence asset and should be given at least the full five-year period, in the best interests of defence.

Yet the threat to members has not gone away and the management board are committed to exploring commercial options, even though we are only three years into the five-year review period.

Future joint supply chain

Running alongside DSDA future options is the Future Joint Supply Chain (FJSC) project. The main thrust of the FJSC strategy is to separate the joint supply chain (JSC) into decider, provider and enabling functions.

A key part of the strategy is the creation of an Integrated Provider Group (IPG) from the merger of DSDA/DSA/BFPO and parts of DFG, under the control of the DSDA chief executive Neil Firth. Both PCS and Prospect have responded to a consultation document on the FJSC.

However, the JSC have chosen to largely ignore our concerns and are planning to push ahead with the formation of the IPG on 1st April, even though large parts of the project are subject to separate consultation and the full impact is not known.

We have a number of concerns around the FJSC. We have condemned the lack of proper consultation, whereby we are being presented with a set of fully formed plans and asked about their implementation, rather than having a chance to influence the direction the JSC takes.

There are huge worries about the possibility of future outsourcing within the IPG and the over reliance on industry.

The FJSC arose out of the defence industrial strategy (DIS) and the department’s failure to update DIS represents a major weakness in the FJSC. The House of Commons defence committee recently stated, “We condemn the failure to publish an updated version of the DIS and consider that it’s continuing absence increases the risk that the UK defence non-industrial base will not be able to meet the future requirements of our armed forces."

More specifically, we have not been fully informed yet about job cuts arising out of the creation of the IPG, other than being told that where there is a duplication of functions posts will be cut and subject to a separate consultation.

There are currently no plans that we are aware of to move any BFPO staff out of Northwood, but those staff in DSA who were due to move to Abbeywood under collocation are now going to move to Bicester, although we are yet to hear the details.

Operational efficiency programme

Toward the end of 2008 PCS became aware that a new programme (called the Operational Efficiency Programme (OEP)) of potential privatisation/outsourcing of governmental bodies and functions was under way.

The OEP was formally announced in the Chancellor’s pre-budget report, with a remit to make recommendations in advance of the April 2009 budget with proposals for outsourcing government functions expected to be announced as part of the budget.

The prime minister has appointed Gerry Grimstone (the former head of Margaret Thatcher’s privatisation Unit) to examine the future of DSDA along with other Government functions such as the Met Office and the Land Registry.

To date the engagement of the OEP team with senior defence officials has been minimal and despite repeated requests the OEP review team has yet to meet MoD trade unions.

Our union along with the other MoD trade unions are extremely concerned about the lack of MoD involvement in the OEP and the extremely quick timescale allowed for the review to be conducted.

We are bemused that staff and trade unions have not been engaged at all in this process. We are concerned that short-term decision-making could be disastrous for the military frontline in the medium to long term.

Other countries have privatised their defence supply chain that has resulted in an extremely poor service to the frontline and military lives being put at risk. Outsourcing the defence supply chain was rejected 3 years ago for good reason.

There is also grave concern about the possibility of a management led buyout of DSDA, similar to what happened with Quinetiq.

The sale of the governments research and technology arm in 2001 was subject to an national audit office (NAO) report which confirmed that the main beneficiaries of the privatisation had been a small group of senior managers some of whom saw the return on their investment increase by nearly 20,000 per cent on floatation.

Chief executive Sir John Chisholm saw his personal investment of £0.13 million increase on floatation to £26 million. The NAO report made clear that the selling off a valuable and strategically important public asset had served only to line the pockets of senior managers and private corporations.

Most disgracefully the senior managers who benefited from the astronomical returns through the privatisation were the people who sold the idea of privatisation to the department in the first place.

PCS are of the view that the needs of defence are paramount and should outweigh any commercial sector profitability. We have been proactive throughout the FDSCi process and have worked closely with DSDA management to mitigate the negative impact of site closures and job cuts.

What happens next?

A project board has been set up and meets regularly to explore DSDA future options. PCS, along with the other trade unions has a seat on this board. We will continue to put the case forward for DSDA to remain as an executive agency.

Our view is that rather than rush headlong towards the commercial sector, we should be arguing for additional enhancements to tackle the funding shortfall. We are also of the view that if all options are being considered, as we have been assured that they are, that there is a strong and compelling argument that DSDA should be taken back ‘on vote’ into the mainstream MOD.

The joint trade unions have a meeting with the JSC next week, when we will again discuss the FJSC project. We will then have to take a decision about whether to register a formal failure to agree.

PCS are lobbying MP’s and the defence select committee We have asked MP’ to write to the Treasury and request a cross-party meeting with the OEP and to support our call for a meeting between the MOD trade unions and the OEP. We have also asked them to write to the House of Commons defence committee to make them aware of the potential for another Quinetiq style scandal and to investigate this.

Improving our power in DSDA

PCS wants all union members to get involved in our union. There are many ways that you can get involved and it doesn’t have to take up a lot of your time:

By being an active member - maybe you don’t want to get too involved. You can still play a really important part in your union by just being an active member and recruiting others into our union, attending union meetings and have your say, and by telling us about problems in your office and ask what you can do to help.

As a workplace union rep - being a PCS rep in your workplace is not as complicated as you might think. The main jobs of a rep are to listen to members and make sure that their views are represented, to keep members informed and to tell new staff about the union and ask them to join.

As you gain experience and confidence you can get more involved in dealing with management and helping members with problems if you want to. You would get time off work and full support and training from PCS.

As a contact or a distributor - You don’t have to give up too much time. You can help, get involved and keep yourself up to date about what is going on by just being a contact point or a distributor and giving out some union circulars in your work area. You will get time off away from your desk to do this.

As a young member’s rep - PCS has a young member’s network. All branches are being asked to elect a young members rep. If you are 27 or under and have ideas about building a better union this could be for you.

As an equality rep - PCS campaigns on a wide range of equality issues.

As a health and safety rep - Union heath and safety reps do a really important job. Carrying out workplace inspections and risk assessments. You would have to be trained and get time off for training.

As a union learning rep - Union learning reps get time off to help staff develop and take up learning opportunities. ULRs cover everything from basic skills to computer skills and CV writing.

The next period in DSDA is likely to be very challenging for us all. We need to build our union strength to stand up for jobs, to prevent senseless and arbitrary cuts, to protect ourselves from privatisation and to ensue that our views are heard properly. We can only do this together.

For further details please contact John Wilson at wilsonj105@mod.uk or call John on 01785 787108