Defence Fire and Rescue Project: Capita

Fabian Hamilton Excerpts

Thursday 21st June 2018 Commons Chamber

[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 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.[Official Report, 25 June 2018, Vol. 643, c. 4MC.]

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.

[Fabian Hamilton]

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.

[Mr Ellwood]

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.