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1.42 pm
The Minister of State for the Armed Forces (Mr. Nicholas Soames): I congratulate my hon. Friend the Member for South Worcestershire (Mr. Spicer) on securing an Adjournment debate at such a timely stage, while we are making up our minds on this important matter. I am sorry if the phrasing of the letter that was
sent to him gave him the impression that we had already made up our minds; the point of writing to him was to tell him of the conclusion that we had reached following our many studies of this thorny problem in an attempt to resolve it.
It was important for us to give some idea of the way in which the collective mind of the Ministry of Defence was moving, so that we could consult my hon. Friend and his constituents and they would be able to have their say. I give my hon. Friend an absolute assurance that the decision is one for Ministers to take: no one but Ministers should be held responsible for it, as he well knows.
My hon. Friend will now have received a copy of the document outlining our proposals, which, as he knows, are subject to consultation from now until 12 February. I note that he will be submitting a further 16 questions to me, and I shall be happy to provide him with a detailed written response. If he subsequently wishes to discuss the matter with me and, perhaps, bring a delegation of his constituents, I shall be pleased to receive him. I am under no illusion about the importance of this matter to my hon. Friend and his constituents.
Let me make it clear not only to my hon. Friend but to all his constituents who are understandably anxious about what is in the consultation paper that we take our obligations to consult extremely seriously. We have noted so many of those obligations in the defence costs studies that we fully appreciate the sensitivities that may arise, and the need for consultation to be real rather than merely cosmetic. As I have said, I shall be happy to receive representations, which will be given careful and detailed consideration before we reach a conclusion.
My hon. Friend has made a good start this morning. He has been pretty hot on the trail, given that the consultation document was issued only yesterday. He has made a number of relevant and important points about the Malvern site. We are well aware of the local impact that our proposals could have, and we shall consider those points very carefully.
As my hon. Friend knows, ATSA is a mixed military and civil service-manned defence agency which provides the Army with essential technical and engineering advice. The current organisation was formed from the amalgamation of the Army's six technical branches and authorities, and the majority of its staff are currently dispersed on seven main sites--Chertsey, Malvern, Middle Wallop, Chilwell, two sites at Woolwich and a small headquarters at Andover.
ATSA was formed in October this year as a result of a study conducted in 1993, which recognised that it would make good business sense to bring the various activities carried out at those disparate sites under one roof. The work done since then has borne out that view, and that is why we now propose collocation. We believe that it will result in a leaner and more efficient organisation, better suited to serving the front line. I was grateful to my hon. Friend for pointing out that the decision must be in the best interests of our management of defence; I know that, having been a Minister himself, he will accept that that is genuinely the case.
The chief executive is confident that collocation will enable him to make the best possible use of modern logistic support and management techniques, and to promote the efficient delivery of technical support. An equally important consideration is the value for money
that should and will be achieved if we go ahead with rationalisation and standardisation. Overall, we believe that the case for collocation is both compelling and necessary to the achievement of optimum effectiveness and value for money.
In August 1993, the trade unions were informed of the outcome of the original study--which my hon. Friend mentioned--including the recommendation that the agency should be collocated on one main site. They were advised that no firm decisions would be made until investment appraisals had been completed and the fullest consultation undertaken. Since then, the staff have been kept fully informed through management briefings and quarterly newsletters. I emphasise, however, that I understand the anxiety that is felt by my hon. Friend's constituents during the decision-making process: I have every sympathy with them.
The chief executive has conducted a range of studies over the past 18 months, both to re-examine the original study findings--which my hon. Friend rightly mentioned--and to establish the best solution for ATSA in terms of value for money and business sense. In common with other Departments, the Ministry of Defence is extremely sensitive to the need to consider the effect that its proposals for the relocation of units may have on local economies. I know that people are anxious about that proposal, as I have seen their anxiety expressed in the Malvern press.
As a result, we have considered some 17 options, 11 of which have been subjected to an extremely full and detailed appraisal. Those options range from doing the minimum, through twin-site options, to a variety of single-site options. All 17 options have been discussed in the document that now forms the basis for consultation but the most logical, and those that I shall deal with in detail now, minimise disruption both for staff currently employed by the agency and for the business that it conducts.
The "do-the-minimum" option, which would keep things more or less as they are and therefore cause least disruption, is the most manpower-intensive of all the options. It is also unattractive, because it fails to realise the anticipated benefits of establishing the ATSA, even with improved communications and a rationalised management structure. My hon. Friend will understand that that option is therefore a non-starter.
Another factor against maintaining the status quo is that the ATSA units at Woolwich occupy buildings that are nearing the end of their economic life and must soon be vacated. The only possible alternative accommodation available to the ATSA in south London would be a new build on the Aquila site at Bromley, currently occupied by the Defence Evaluation and Research Agency. Largely for that reason, the "do-the-minimum" option is one of the most expensive of those considered.
For many, including my hon. Friend, an obvious choice might be to concentrate ATSA on both Chertsey and the north site at Malvern, the current locations for much of ATSA's activity on land systems. On close examination, however, that proved to be the most expensive option. Financial considerations apart, the two-site option also fails to offer the business advantages of an agency collocated on a single site. Although I recognise that continuation at both Chertsey and Malvern offers least disruption for staff, it would unfortunately perpetuate
many of the inefficiencies of the current arrangements and offer no financial advantage. For this reason, we rejected the option.
The other option, which obviously finds favour with my hon. Friend, is to locate the entire operation at Malvern. As the consultative document explains, collocation at Malvern would involve either the refurbishment and use of the existing buildings or the construction of a new building. Both those options are more expensive than collocating at Chertsey. Malvern has one advantage as a single-site option: it would be better placed than Chertsey, in travelling terms at least, for communications with the centre of the new MOD procurement executive at Abbey Wood near Bristol. Balanced against that, however, is the fact that Malvern is far less convenient for meetings with ATSA's owner and main customers at the headquarters of the quartermaster general at Andover.
A collocated ATSA establishment would also introduce many additional military staff into Malvern, which would necessitate a major new build of married quarters and single living accommodation. The cost of that work, along with the need to refurbish or build new office accommodation, means that Malvern is a more expensive option than Chertsey.
Compared with the Malvern option, collocating at Chertsey would involve less building work. Some new office accommodation will be required, but the married quarters and messes for military staff can be met from existing resources. All that adds to the cost-effectiveness of the Chertsey option. In terms of net present value over 25 years, the Chertsey solution is also £5 million cheaper than the cheapest Malvern option.
From a business point of view, Chertsey is also the preferred option, as the agency's owner and major customers, the equipment support management staffs, are at Andover.
Mr. Michael Spicer:
The Minister is simply reading out, almost word for word, the advice contained in the document that we have all seen. As I requested at the beginning of this debate, will he reconsider that advice in the light of what I have said?
Mr. Soames:
I shall indeed, but it is important that I put our view on the record. The point of the consultation process is to take account of all the views that my hon. Friend expressed today, which his constituents will wish to express in the coming weeks and the more detailed questions that he will submit to me.
Of all sites considered for the ATSA, Chertsey is the closest to Andover in travelling time, which can represent a significant saving in staff travel costs for meetings at either location. Also, as it is geared to large armoured fighting vehicle support, Chertsey has the most extensive support facilities of all the current ATSA sites. I acknowledge my hon. Friend's comments about the road at Malvern.
The facilities at Chertsey are shared with the Defence Evaluation and Research Agency, and it would be extremely expensive to re-create them elsewhere. The appraisal of other sites has included the assumption that a detachment at Chertsey would have to be maintained to use those facilities. Chertsey also has ready access to test areas for large vehicles on MOD-owned property, a feature absent from other site options.
My hon. Friend quite rightly wants me to understand and take account of the effect that our proposals will have on the local economies of areas from which ATSA will withdraw and the disruption that it could cause to the families involved. He knows that I fully understand that. Nevertheless, it is a sad fact that reorganising in this way to allow the introduction of new working practices will often result in some job losses. On this occasion, if our proposals go though, we expect them to yield some 300 posts, both civilian and military, by the time and if collocation is fully achieved.
We expect our proposals to affect around 230 posts, both service and civilian, at Malvern. The majority of those losses are likely to fall on non-mobile staff and, although it is anticipated that many will be met by natural wastage, it would be wrong of me to rule out the prospect of some redundancies. If we go ahead, we shall attempt to minimise the number of redundancies as much as possible and shall examine the scope for civilianising some military posts, which may help us in this area.
As the consultative document explains, if we proceed with the proposals, up to 50 staff may ultimately have to be made redundant at Malvern. I stress, however, that, wherever possible, it is intended to transfer civilian staff, provided that job vacancies exist in the reorganised agency. We shall also seek to find staff posts elsewhere within the Department or the civil service generally. As well as reducing possible recruitment difficulties at the new site, transferring staff should reduce the number of redundancies and retain as many existing experienced staff as possible.
My hon. Friend will understand that I do not underestimate the upheaval that can be involved for staff who may need to move house. But if we proceed with our proposals, we shall offer our relocation package to mobile staff who transfer. That includes significant financial assistance to cover many of the costs associated with moving. I note my hon. Friend's comments about the costs associated with moving into an area like Chertsey.
We shall do all we can to ensure that any reductions are handled sensitively and compassionately, recognising the significant contribution that the staff have made to the extremely efficient functioning of the agency and its predecessors over many years.
I do not wish to underplay in any way the job losses that may flow from our proposals. Malvern will remain a major centre of employment for my Department, with the DERA continuing to employ more than 1,700 civilians there. In addition, more than 4,500 service and civilian staff will continue to be employed at establishments in the surrounding area. Where possible, opportunities would be sought to offer staff other posts in the MOD or elsewhere in the civil service.
All staff, both service and civilian, employed by the various branches that make up the ATSA--including those at Malvern--have provided first-class support to the armed forces. One does not get the chance often enough to praise those people who undertake important work, which, although well away from the spotlight, is vital in ensuring the fighting effectiveness of the front line. Troops now deploying to Bosnia will have equipment that the ATSA has dealt with. The staff at Malvern are no exception to that, and I am well aware of the need to ensure that all the arguments that my hon. Friend put forward, and the 16 questions that he will submit to me--he may choose
to bring a delegation to see me--are carefully weighed before I come to a final decision on the ATSA's future site.
The facts described in the consultative document strongly support ATSA's collocation on a single site. As Minister of State for the Armed Forces, I must ensure that the Ministry of Defence adopts the most effective solution in operational, business and cost terms. Nevertheless, I assure my hon. Friend that the consultation period will be just that--a period for thorough, sensible and real consultation. That is the least we owe those people who have served their country so well.
I am grateful to my hon. Friend and congratulate him again on raising this important matter at such a timely moment. He may be assured that we shall deal with it in a thorough and comprehensive way.
It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
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