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Defence Committee publishes Government response to Sub-Committee report on the Treatment of Contracted Staff for the MOD’s Ancillary Services

22 September 2022

Today, the Defence Committee publishes the Government response to the Sub-Committee on the Treatment of Contracted Staff for the MoD’s Ancillary Services’ report.

The Sub-Committee’s original report stated that “contractors drop standards and squeeze employees to raise their profit margin” but warned that the MoD is not always willing to step in and enforce expected standards.

The report raised concerns around Capita’s involvement in the Defence Fire and Rescue Service (DFRS), calling for the MoD to review Capita’s performance and saying it was “absurd” that the MoD is not allowed to examine a contractor’s previous performance in deciding on contract awards.

Today’s Government response set out the Government’s position regarding the Committee’s concerns on procurement and factoring in past performance, stating that: “the new Procurement Bill includes a discretionary ground to exclude a supplier for breach of contract and poor performance, which is broader than the past performance ground in the PCR [Public Contracts Regulations]”.

In response to the Committee’s concerns around Capita, the Government says “several factors can lead to increases or decreases in staffing levels” and that the “DFR has seen no evidence of a reduction in response capability”. The Government reiterated that Capita’s risk management plan is subject to agreement by the MoD.

Chair's comments

Chair of the Defence Committee, Tobias Ellwood MP, said:

“Our report found that the outsourcing practices of ancillary services are far from exemplary and little consideration has been afforded to providing improved services-inhouse. The Ministry of Defence must do better or risk a deterioration in the health of vital defence services.

I’m pleased to hear that work will be done through the Procurement Bill to improve the rules and regulations around awarding contracts. Changes to legislation must ensure that the Government are able exclude organisations with poor past performances. We need the best company for the job, not just the lowest bidder.

However, there is little reassurance that Government will step in to prevent Capita reducing manpower in the Defence Fire and Rescue Service. Capita’s track record of underperformance should ring alarm bells in Government and the Committee will continue to monitor this issue.”

Further information

Image: Ministry of Defence