Fabian Hamilton (Leeds North East) (Lab) (Urgent Question): To ask
the Secretary of State for Defence if he will make a statement on
the awarding of the defence fire and rescue contract to Capita. The
Parliamentary Under-Secretary of State for Defence (Mr Tobias
Ellwood) I am grateful for the opportunity to put on record the
justification for the awarding of the...Request free trial
(Urgent Question): To ask the Secretary of State for Defence
if he will make a statement on the awarding of the defence
fire and rescue contract to Capita.
-
I am grateful for the opportunity to put on record the
justification for the awarding of the contract. The
defence fire and rescue project has been examining
potential improvements in how fire and rescue services
are provided to the Ministry of Defence, both here in the
United Kingdom and overseas. The total value of defence
fire and rescue operations is around £1.3
billion. We intend to award a 12-year contract worth
around £400 million to Capita Business Services Ltd.
However, this is open to possible challenges—the normal
process ensues—following the issuing of the contract
award decision notice and possible parliamentary
challenges to the contingent liability.
The contract will deliver improvements in the safety of
military and civilian firefighter personnel, and
improvements in the equipment and training available to
them. It will deliver savings that will be reinvested
into the defence budget while sustaining our ability to
support operations around the world and to support local
authority fire services, should that be required at times
of heightened national need. In doing so, it will ensure
that our personnel, airfields and strategic assets
worldwide continue to be protected from the risk of fire.
I assure Parliament that the proposed contractual
arrangements have been subject to the fullest range of
testing and scrutiny across Government to ensure that the
services will be delivered in a sustainable and resilient
manner. Safeguards are in place to ensure that there is
no break in service provision. Capita is a strategic
supplier to the Government, and the Cabinet Office
maintains regular engagement with the company, as with
all strategic suppliers.
Fire risk management will remain a defence responsibility
after the award of the contract. In no circumstances will
there be any compromise to our personnel’s safety. Over
the course of the bidding for the contract, Capita’s
financial status has been analysed by the MOD’s
cost-assurance and analysis service, and we have in place
the necessary contingency plans to ensure that the
contract is managed accordingly. We will actively manage
the contract to provide early warning of any performance
concerns so that they can be addressed thoroughly.
Following a competitive bidding process, Capita’s bid was
deemed to deliver the best technical solution and the
best value for money for defence. Robust evaluation and
modelling processes were undertaken to test the
deliverability of the proposed contracts to ensure that
all risks were identified. As well as the full assessment
of the proposal, we have a contract that clearly defines
the obligations for the contractor. A performance
mechanism has been developed to make sure that Capita is
incentivised to ensure that delivery targets are clearly
defined.
I should be clear that this is not the first time that
contractors have been used in this way—several sites,
including Porton Down, are already using contractor fire
service capability. In addition to offering significant
financial savings that can be reinvested in defence, the
project aims for the delivery of sustainable and agile
defence fire and rescue services that meet the
requirement without compromise.
-
I am extremely grateful to you, Mr Speaker, for granting
this urgent question. I was very eager to hear the
Minister’s justification for awarding such a crucial
contract for the defence fire and rescue service to
Capita.
I think that we would all agree that it would be
extremely worrying if a situation were to arise whereby
this contract could not be delivered or was not delivered
to the standard required. The risks, I am sure the
Minister agrees, are simply too great for that to be
allowed to happen.
The Minister’s Department received advice as recently as
7 June that Capita represents a 10-out-of-10 risk, so how
was the decision made to give the contract to Capita? The
Minister has already touched on that. His Department has
said that all its suppliers are
“subject to robust assessments ahead of any contract
placement.”
What consideration, if any, was given to the advice that
the Ministry of Defence has received on the financial
health of the company?
We know that Capita has a record of poor performance for
delivering Ministry of Defence contracts. It was stripped
of the defence estate contract, and the less said about
its Army recruitment contract the better. In spite of
that, the Government have knowingly chosen to give Capita
another contract. What specific measures has the
Department put in place to monitor the delivery of the
contract and to take penalty action for poor performance,
if necessary?
The Government’s written statement told us that
“the contract duration is 12 years”,
which is a considerable amount of time for a company
associated with extremely high risk. The fire service is
vital to the safety of our armed forces, to their
families and to key defence assets. Will the Minister
tell us what arrangements will be in place if Capita is
unable to deliver the contract for its full duration?
A number of defence fire workers will be very worried
indeed about this news. The significance of the
workforce, and their role in protecting MOD staff and
families, and the Department’s infrastructure—both
overseas and at home—cannot be overstated. What
assurances can the Minister give us about the future of
these workers and their pensions? What help will be
provided for them if redundancies do occur?
Is it not time to accept that this Government’s
ideologically driven approach to outsourcing public
services at any cost has simply failed? We must end the
racket of outsourcing and deliver solutions that benefit
taxpayers and service users alike.
-
I am grateful to the hon. Gentleman for his questions. I
appreciate his interest in, and concern about, these
important matters. If I may, I will probably write to him
in more detail, because he set out a series of questions,
but I will give him an overview now to reassure him that
the bidding process was absolutely robust.
I did go to some length in my opening remarks to reassure
the hon. Gentleman that we were looking at a number of
companies—Serco, Babcock and QinetiQ, as well as an
in-house offering—to ensure that we have a robust system
that meets our responsibility to eliminate any problem
related to fire. The actual bid process itself was
competitive. There was robust evaluation modelling—it
involved not just the MOD, but the Treasury, the Cabinet
Office and indeed the three services—to make sure that we
have the necessary processes in place to manage what will
be an umbrella organisation.
As the hon. Gentleman knows, the way in which our fire
service is conducted means that we have responsibility
inside the wire. There is also civil capability, and RAF
and naval personnel are cap badged to provide fire
capability, too. We also lean occasionally, when
required, on local authorities, and that relationship
will continue, but overall control will come from Capita
itself. Having said that, the actual responsibility will
be managed by the Defence Fire Risk Management
Organisation, which, as I have said, will continue to
scrutinise the performance of Capita itself.
The hon. Gentleman is right to raise concerns about the
workers themselves. Just under 600 civilian workers will
be transferred across. I absolutely hope that this will
not lead to any changes. If there are any, I hope that
they will be done through redundancies. We are looking
for investment in new machines, new technology, new
capability and new safety measures, which will hopefully
be welcomed by Members on both sides of the House.
-
The Minister said that personnel would be safer; will he
explain how?
-
Short and to the point, as ever. As I just mentioned,
there will be investment in new technology—we need
investment in new fire service vehicles—as well as
training methods, collaboration and response times so
that we can respond to any fire at any time. These
changes will make the work of the fire service personnel
safer.
-
Scottish National party Members have always been very
concerned that these vital services were ever thought
appropriate for privatisation. Our added concern is that
the protection of national and defence strategic assets
has been given to a company with such a chequered past.
Indeed, on the day of the announcement, Capita’s chief
executive was appearing before the Public Accounts
Committee to answer questions about the company’s poor
delivery of services to the NHS. Will the Minister
therefore explain why the Government felt the need to
privatise these services, when not even the US Department
of Defence does, and how a company with such obvious
shortcomings could be considered the best option for
delivering this contract?
-
I can only repeat what I said earlier: there was a robust
bidding process and it was deemed that Capita offered the
greatest contract we could have. Concerns have been
raised about Capita in other areas—recruitment, for
example, has been mentioned—but I am convinced that the
necessary scrutiny is in place to provide the best deal
and the necessary support for our fire service.
-
Will the Minister say a bit more about the savings he
talked about being reinvested in defence, which I am sure
most of us in the House would be very glad to see?
-
I am grateful for that question, although it almost
tempts me down a rabbit hole that I have occasionally
gone down before. While I support the increase in the
budget for the health service, I must reiterate that the
UK’s defence posture is such that we must invest in our
armed forces as well. Having said that, there is an
obligation—a requirement; a duty—on the armed forces and
the MOD to make efficiencies and savings, without
affecting risk, and this is one area where we can do that
and reinvest the savings in defence.
-
We have had 12 years of debate about what should happen
to the contract—12 years of uncertainty for the
workforce—and now we have a 12-year contract. It seems to
me and the unions that key parts of the work currently
delivered by the defence fire and rescue service, such as
the checking of fire extinguishers on site, are not
included in the contract. Capita does nothing for
nothing, so this will not save money. What is the
Minister doing to ensure this provides value for money?
-
The hon. Lady follows these issues very closely, and I
pay tribute to her for her interest and expertise in this
matter, which the House greatly appreciates. I agree
that, for various reasons, this has taken too long. The
contract process was run in accordance with the Defence
and Security Public Contracts Regulations 2011, but it
has taken too long for various reasons, some of which I
have covered, including the number of stakeholders that
had to scrutinise and agree the bidding process, and
confirm the successful bidder. I take her point on board,
however, and we will make sure as we do the evaluation
that her concerns are met.
-
I welcome the fact that safeguards are in place and that
the delivery of the contract will be monitored. Will the
Minister reconfirm that the contract represents value for
money and will also result in improvements and savings to
the Department?
-
My hon. Friend makes an important point. This is not just
about savings; it is about the responsibilities of our
defence fire service, which not only has the duty of
looking after our airfields, ports, ships and bases, but
has the responsibility of being on standby to help its
civilian counterparts in extreme cases. It is important
that we can invest in the necessary high-tech machinery
and fire service capability. That is what will lead to
savings in the long term.
-
Prospect, the union that represents staff in the MOD fire
and rescue service, including in Devonport in my
constituency, has said that any projected savings cannot
be delivered without increasing the risk to defence. Will
the Minister respond to that concern?
-
I would need more detail even to respond to that very
broad statement. The analysis done in the MOD, and the
analysis that has been done by the Treasury and the
Cabinet, says exactly the opposite. As always, I am happy
to discuss the hon. Gentleman’s concerns for Davenport;
he did not mention Plymouth this time.
-
Can the Minister provide some assurances about fair terms
towards subcontractors? BST Electrical in my constituency
fell victim to the Carillion scandal because of
Carillion’s obscene 120-day payment terms. Will the
Minister assure me that that sort of invidious practice
will not continue under Capita?
-
My hon. Friend’s question gives me licence to confirm
that the shadow of Carillion hangs heavy over all
Government Departments, if we are fair. Any new
contract—with Capita or anyone else—needs to be
sufficiently robust that we do not fall foul of some of
the problems that Carillion experienced, including
through its relationship with small and medium-sized
enterprises, which my hon. Friend mentions.
-
There is a case for outsourcing when the company has
specialist expertise. What specialist expertise does
Capita have in military fire services? Does the Minister
think that it is now time for freedom of information
legislation to apply to companies that are, in effect,
doing public sector work, so that we can know, for
instance, what contingency plans there might be in case
Capita goes belly up?
-
May I welcome the fact that the right hon. Gentleman’s
party—if he is speaking on its behalf—recognises the
importance of the private sector in such cases? However,
as the hon. Member for Leeds North East (Fabian Hamilton)
said, this should not apply at any cost or under any
circumstances. A series of Governments—not just
Conservative or coalition, but also Labour—have
outsourced responsibility for firefighting from the armed
forces over the past few decades, so it is very important
that the necessary robust processes are in place to
ensure that these contracts are met. We have around 60
contracts with Capita. Its responsibility is not to run
the day-to-day things. Many people providing the fire
service capability will continue on. This is about the
management and organisation that Capita brings.
-
How many alternative bids were there, and was Capita’s
bid the cheapest?
-
Capita’s bid was the best. Three other organisations also
bid.
-
Given the fact that this company has earned the highest
risk rating of 10 out of 10 and, worryingly, a health
score of three out of 100, how will the Minister convince
the House that this is not a case of penny wise and pound
foolish at the expense of our defence fire and rescue
service?
-
As I said in my opening remarks, there was a very robust
bidding process, which was scrutinised by a number of
Departments. It does not just stop there. We do not
simply slide the contract across and call it a day. We
will continue to scrutinise the process, and any issues
will be raised. I hope that the hon. Gentleman’s concerns
will be met.
-
It is said that the definition of insanity is doing the
same thing multiple times but expecting different
results. I think that this may be the case given the
absolute failure in Army recruitment, whereby Capita has
not met the already woeful threshold of 82,000? What is
the Minister doing to grip that issue before rewarding
failure again with this fire service contract?
-
We are wandering into a very different subject, which is
related to this matter only because of the company
involved. The challenge that we have with recruitment is
that the gene pool of people from which we are recruiting
from is of a particular age group and a particular level
of fitness. In this day and age, that is a very
competitive environment; it is not just Capita that is
going out and doing recruitment. Capita works very
closely with all three services. But, yes, it is a tough
environment—I do not doubt that—and we need to do more to
attract the brightest and best to be in the most
professional armed force in the world.
-
Given Capita’s highest risk rating, will the Minister
please give us a full list of the MOD’s Capita contracts?
-
I will write to the hon. Gentleman with more information
on that matter.
-
A constituent of mine, Mr Rob Rigby, is the national
secretary of the Unite branch representing these workers,
and I can assure the Minister that the workers are not
particularly happy about this announcement. If the
contract is going to be such a success, why is the
Minister excluding all the bases in Cyprus?
-
I did not quite hear the end the hon. Gentleman’s
question. I think it was to do with the agreement in
Cyprus; is that correct?
-
I asked the Minister why he was excluding the bases in
Cyprus.
-
Particular terms and conditions will apply to our
overseas bases, and there will be contracts in place. I
think that nine airfields are already running under
privatised contracts, so the question mark over a
particular airfield may be subject to existing
arrangements.
-
May I try again with the Minister? I do not understand
how a company that scores 10 out of 10 for risk in an
internal document produced by the MOD can be awarded a
contract.
-
In the bid that was put forward, the expectation that is
made here is for managing our fire risk capability, and
it is in those circumstances that Capita is being judged.
We do not step back and take a look at the numbers and
the bits and pieces in other areas; it is particularly
for this aspect of it. The concern that the hon. Lady
raises must be taken into account by ensuring that there
is robust scrutiny of the effectiveness of the contract
as it ensues, and I will be happy to come back to the
House to report on the success or otherwise of the
contract with Capita. I give her that guarantee.
-
The workforce undertake a complicated pattern of working
through their shift arrangements. Will the Minister
guarantee that that will not fundamentally change? Many
of the workforce travel long distances to work and are on
site for days on end. Will he guarantee that that will
continue?
-
I hope that I speak on behalf of the whole House in
paying tribute to the incredible bravery, commitment and
determination of all our emergency services. There are
specific harmony guidelines in place to ensure that they
are able to meet their requirements, see their families
and do their duties, and I am sure that they will be
continued under this new contract.
|
