Ministry of Defence (Procurement)

Debate between Gordon Henderson and Craig Whittaker

Wednesday 19th October 2011 Westminster Hall

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

It is good to have you in the Chair for the debate this afternoon, Mr Hood, and I apologise for its wide-ranging nature. A number of Ministers have responsibility for Ministry of Defence procurement, which I know has presented something of a dilemma as to who should respond to the debate. The Under-Secretary of State for Defence, my hon. Friend the Member for Mid Worcestershire (Peter Luff), appears to have drawn the ministerial short straw, and I appreciate that he might not be able to answer fully some of the issues raised. However, if necessary, I am more than happy to receive a delayed response from his appropriate ministerial colleague.

The issues are varied but a common theme runs through them: the apparent flaw in how contracts are negotiated by the Ministry of Defence. The first such contract to mention is a memorandum of understanding signed between the British MOD and the Canadian Department of National Defence, an agreement about the British Army training unit, Suffield—BATUS for short—which is sited at the Canadian forces base at Suffield in Alberta, Canada. In case my words are taken as a criticism of the coalition Government, God forbid, or its immediate predecessor, I should point out that although the current agreement was signed in July 2006, the original one was signed way back in 1972. I have a copy of that agreement and, in all my experience in the contracts industry, I have never seen a more one-sided document. Not only does the agreement give to the Canadian Government the final say in how BATUS is operated, down to who is employed on the base and from whom and from where equipment is purchased—I will come to that aspect in a moment—but it is also my understanding that the financial split between the two Governments is such that the British pay 80% of all the costs and the Canadians 20%. Bizarrely, however, nowhere in the documents are those figures spelt out explicitly.

The effects of the agreement are plain to see by anyone who visits BATUS, as I did recently with colleagues from the armed forces parliamentary scheme. Let me give a couple of examples. Administration on the base is shared between Canada and Britain, but three or four Canadian civilians work there, compared with one Brit. That is hardly surprising if we consider that the Canadians decide who is employed but the British taxpayer picks up 80% of the bill for employing such people. On the equipment side, earlier this year the Army decided to withdraw its helicopters from Belize and wanted to transfer them for use at BATUS in support of battleground exercises. The Canadians refused and insisted that British forces at BATUS lease Canadian helicopters piloted by a Canadian civilian from a Canadian company. That is not a good use of British taxpayers’ money.

On the subject of helicopters, to save money BATUS has now stopped using helicopters as part of its battlefield training exercises, apart from in a support role. That is a false economy because the lack of proper training could put at risk members of our armed forces during any future active service in which helicopters might be needed to transport soldiers to the front line. The cost of using helicopters during annual training exercises is estimated at £100,000—a small price to pay for a soldier’s life. If the MOD wants to find that money, let me say where it can be found.

At BATUS, there is a range control building, which is used to monitor vehicles accessing and leaving the training area. It is sited at the beginning of Rattlesnake road—yes, there are rattlesnakes on the prairie, to which my colleagues and I will bear witness—but eight years ago the Canadians insisted that the building was in poor condition and needed replacing. The MOD agreed and, earlier this year, contracts were awarded for a new range control building on a site a few hundred yards from the existing building, which, surprise, surprise, will be built by a Canadian construction company, using local labour. The cost to the United Kingdom, confirmed in a letter from the MOD, will be £4 million. Setting aside that we could build a decent-sized primary school for that amount, I question the need for a new building at all. As I said, I was at BATUS with colleagues a little more than a month ago, and the old one looked fine to me. The House need not accept the judgment of a humble Back-Bench MP, however, because I can assure the House that that view is shared by the permanent British military personnel in Canada, who categorically state that they do not need the new building. I urge Ministers to look again at that unnecessary project and to pull the plug immediately. Just think how many helicopter training hours we could fund with the £4 million saved.

[Craig Whittaker (Calder Valley) (Con)]

I thank my hon. Friend for securing the debate. I was on the same trip to BATUS and the training facilities there are second to none—they are an incredible facility for the British Army to use, and no one for one minute is doubting that. During our recent visit to BATUS as part of the armed forces parliamentary scheme, however, we saw another example of the ludicrous bias in the memorandum of understanding. The British Army has two personnel looking after several bunkers of live ammunition, whereas the Canadians have six personnel looking after the equivalent of a tableful of ammunition, 80% of whose cost is paid for by the British taxpayer. Does my hon. Friend agree that the BATUS memorandum of understanding needs to be looked at again now, for renegotiation, rather than being ignored? My understanding from the Minister is that there are no plans at all to renegotiate the MOU.

[Gordon Henderson]

I thank my hon. Friend for his intervention and for reminding me of that additional scandal—which is what it is, ultimately—about an agreement that allows the Canadians to employ whomever they want with the British taxpayer paying up to 80%. I, too, urge Ministers to enter into immediate negotiations with the Canadian Government to reduce the percentage of the total operating costs of BATUS paid for by the British taxpayer. I hope they do so, and it can be done, because the memorandum of understanding is a rolling contract—there is no bar on opening negotiations at any time.

The MOD pays the Canadians £20 million a year to use the BATUS training area which is, as my hon. Friend said, a fantastic training facility, and I would certainly not want it to close. Entering into new negotiations with the Canadian Government might pose a threat because the Canadians could turn round and ask the British to leave, but I do not believe they would. It is Canada’s interest as much as ours to have that joint training facility, and I remind Ministers that it is a joint training facility for which we Brits pay 80% of the cost. In addition to the £20 million that Britain pays for use of the training area, the UK pays a proportion of the operating costs, which is around £80 million a year, so the total cost of the facility is £100 million a year. In the current economic climate, with members of the armed forces being asked to accept cuts in pension entitlement and allowances, it is surely right that the MOD makes an effort to reduce the cost of operating BATUS.