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The Prime Minister: Yes, that is precisely the reason why my right hon. Friend the Secretary of State for Trade and Industry said that the Government have decided that we will continue with the new account
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after 2010. That, incidentally, is in addition to the £2 billion of extra support for post offices, particularly rural post offices. We all know the reasons why post offices face a great deal of challenge and difficulty at the moment—because of the changing way that people are handling their accounts—but I can assure my hon. Friend that we are doing everything that we can to make sure we preserve as many of them as possible, that we make the investment and that we keep the account going.

Mr. Robert Walter (North Dorset) (Con): A few minutes ago, in answer to a question from my right hon. Friend the Leader of the Opposition about criminal records exchange, the Prime Minister said that before 2006 there was no system across Europe for the exchange of criminal records. Can he explain why, in 2001, the Government negotiated a protocol to the 1959 Council of Europe convention on the exchange of records, but have neither ratified nor implemented that protocol? So before 2006, it would have been possible to exchange those records.

The Prime Minister: The hon. Gentleman is completely mistaken about that. The fact is that there was no proper system prior to 2005 and the decision of the European Council. If I may, I will point this out to him: it was only because we were able to work with other European partners that we managed to get agreement to implement a new system. That new system is in place, and for the first time we have proper records that we can implement properly and make sure that we monitor properly. That is the change that has been brought about in the last year.

Anne Main (St. Albans) (Con): On a point of order, Mr. Speaker.

Mr. Speaker: After the statement.

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Defence Training Review

12.32 pm

The Secretary of State for Defence (Des Browne): With permission, Mr. Speaker, I would like to make a statement about the defence training review rationalisation programme. Before I do so, however, I am sure that the whole House will join me in extending their condolences to the friends, family and colleagues of Marine Thomas Curry, Lance Corporal Mathew Ford and Kingsman Alexander Green, who were killed in operations in Afghanistan and Iraq over the weekend and earlier this week. I pay tribute to their bravery, professionalism and courage. No words can express my admiration for our armed forces and the work that they do daily in the most difficult and challenging of circumstances.

In November 2004, the Ministry of Defence issued invitations to negotiate for two contractual packages under the defence training review rationalisation programme. The programme is a large and complex public-private partnership project that seeks to transform the way in which we deliver six types of specialist training on a defence-wide basis to support better the future needs of the armed forces.

All bidders have put in strong bids, and I am grateful to Members in all parts of the House, who have expressed such strong support for relevant bids. I can now report that, following a detailed evaluation process, the bids from the Metrix consortium have been judged to offer the best technical and prospective value-for-money solutions to the defence training review requirement for both packages 1 and 2. As a result, we are appointing Metrix as preferred bidder for package 1 and provisional preferred bidder for package 2. Metrix has won each package independently and separately, and we now plan to take forward negotiations with the consortium.

On 18 December, the MC3 consortium submitted an unsolicited last minute alternative proposal for package 1. That proposal was considered, but was quickly discounted as failing to meet the requirements of the invitation to negotiate. As an unsolicited proposal it was also outside the rules of the competition.

I must emphasise that identifying the best training solution for defence has been the primary consideration. The evaluation has involved some 200 subject matter experts. The training element was overseen by Professor Molyneux, an independent expert in modern training technology and e-learning.

For package 1 we are confident that we have a broadly affordable solution that will deliver modern and efficient aeronautical engineering, electro-mechanical engineering and communications and information systems training. Currently, that is delivered at nine locations, involving some 3,500 military and civilian staff providing instruction to 6,500 defence trainees at any one time. Over a five-year transition period starting in late 2008, Metrix proposes to rationalise the estate, initially on to two major sites, St. Athan and HMS Sultan. Marine engineering training will remain at HMS Sultan until 2017, when that too will relocate to St. Athan. The St. Athan site will be largely a new-build facility.

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A small enclave will, however, be retained at Bordon for vehicle recovery training, and some communications training will continue to be delivered at HMS Collingwood. Overall, that will have a varying impact across nine sites: Arborfield, Bordon, Blandford, HMS Collingwood, Cosford, RAF Cranwell, RAF Digby, HMS Sultan and, of course, St. Athan.

Package 2 is more complex. It aims to provide training for logistics and personnel administration, police and guarding, security, languages, intelligence and photography. Currently, that is delivered at 18 locations across the United Kingdom, involving some 2,900 military and civilian staff, and 4,500 trainees.

The evaluation process identified Metrix as a clear winner for package 2, but we have more work to do to resolve the outstanding issues to address a significant affordability gap and to explore possible synergies with package 1, which should deliver improved value for money across the programme as a whole. Until we have resolved those issues with the bidder we cannot confirm the final approach that the MOD will take, including whether all, or part of, package 2 goes forward. However, it is only right that we inform the losing bidder that it has been unsuccessful.

Starting in late 2008, the current Metrix proposals would again see rationalisation to St. Athan over a five-year period. However, all training currently undertaken at Leconfield, Wethersfield and a number of smaller federated units would remain at those sites, as would the majority of training currently delivered at Chicksands.

Together, these proposals will embrace the very best training methods available today, in an environment designed for military learning. Full advantage will be taken of the latest technology for simulators and distributed learning solutions. The proposals will deliver top-grade single living accommodation for all ranks, with single en-suite rooms for many. New recreational and sports facilities will enhance the quality of life for our trainees, staff and their families.

I take the implications of the change programme for our people very seriously. The impact is likely to be significant for civilian staff required to transfer to the new partner. They will, of course, be protected in full accordance with the TUPE regulations, which cover the transfer of undertakings. However, some redundancies following transfer cannot be ruled out, and should any occur, they will be taken forward sensitively and in full consultation with trade unions and staff.

I do not underestimate how disappointed some hon. Members and their constituents will be where we are seeking to withdraw training establishments. That will be most keenly felt in the west midlands at Cosford, and in North Dorset at Blandford. While not wishing to pre-empt any specific decisions, I am pleased to say that there are no plans to close either site. The current training at each will continue until 2011, and the Department is exploring a number of proposals for the potential future defence use of both Cosford and Blandford. Those proposals will be announced, subject to the normal review and approvals processes, but a military presence is expected to remain at both sites in the future. At Cosford, Metrix proposes building a learning resource centre and developing a national
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training research and development support centre. In addition, it will work with the Department to examine how the programme might support the establishment of the national manufacturing skills academy.

It has been suggested that the Ministry of Defence has a conflict of interest by virtue of its minority shareholding in QinetiQ, which is part of the Metrix consortium. That was recognised at the outset. Frankly, it is not unusual for QinetiQ to be a member of a consortium bidding for MOD work, or to be a potential beneficiary as a subcontractor. Therefore, we have put in place stringent steps to separate the roles of customer and owner in relation to QinetiQ. Those steps were made plain in the prospectus to investors when QinetiQ was floated on the stock market last year, and a copy was placed at the time in the Library. I am content that the DTR evaluation process did not take improper account of the QinetiQ shareholding.

My hon. Friend the Under-Secretary of State for Defence and I have written today to all those hon. Members whose constituencies are affected by this announcement, with details of the changes as set out in the winning bidders’ current proposals. As the way forward becomes clearer, I will update the House. I have also made available in the Library a number of key documents, including the invitations to negotiate and Professor Molyneux’s letter validating the evaluation process.

I conclude by emphasising again that the bids from the Metrix consortium offered the best technical and value-for-money solutions to meet the future needs of defence specialist training. As I stated earlier, we now plan to take forward negotiations over the coming months with the Metrix consortium. This remains an extremely complex public-private partnership programme and a number of significant issues remain to be resolved, particularly over the proposals for package 2. I do not plan to make any further announcements until that work has been completed.

Dr. Liam Fox (Woodspring) (Con): I thank the Secretary of State for his statement. May I, too, begin by paying tribute on behalf of the Opposition to the servicemen who lost their lives recently? Our thoughts and prayers are with the families and friends of Thomas Curry, Mathew Ford and Alexander Green.

I should also like to thank those of my colleagues who have argued so forcefully for the facilities in their areas. I refer in particular to my hon. Friends the Members for The Wrekin (Mark Pritchard), for Ludlow (Mr. Dunne), for South Staffordshire (Sir Patrick Cormack) and for Gosport (Peter Viggers), my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot), and my hon. Friend the Member for North Dorset (Mr. Walter). All their constituents will be affected by the proposed changes.

On the positive side, it would be good to have high-quality training, and a high-quality training establishment that might act as an aid to recruitment in the future, especially given that demographics will not be on our side. Moreover, at a time when we are celebrating the Union in this country, it is also a positive to see Wales playing a full part in the future of our armed forces. That will send the strong message to
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those who want to break up the UK that far more unites us than divides us. The statement will also be regarded as a positive opportunity for the academic capabilities of the west and south-west of England, not least among which are the excellent technical skills offered by the academic institutions of Bristol and Bath.

However, the statement is remarkable for its very opaque nature, and for what it does not tell us. Exactly why did the Metrix bid win? What were the key decisive factors that made it the preferred choice? Will the Secretary of State give us an idea of the number of redundancies that the MOD has assessed to be likely as a result of this decision? What type of alternative defence use might be envisaged for Cosford and Blandford, and when might those employed there get further details?

Perhaps most worrying are the financial elements of the deal. Exactly how much will the proposals cost? There was nothing in the statement to tell us that. Has the Chancellor agreed to underwrite the full cost of the projects? At a time of overstretch in the armed forces, a tight defence budget and an even tighter spending round in prospect, will the proposals be financed through a growth in the defence budget—that is, with new money? At a time of inadequate service accommodation and mothballing ships, and when there are capability gaps, any further reduction in front-line budgets would be wholly unacceptable.

Of particular concern are the terms used by the Secretary of State. He says, “We are confident that we have a broadly affordable solution”. It seems to me that a solution is either affordable or not. What does “broadly affordable” mean? When he says that we have to address a “significant affordability gap”, what sort of gap are we talking about? What sort of money does the Secretary of State think that that gap involves? As a former Chief Secretary to the Treasury, those terms must mean something to him. The House, the country and all those affected by the changes have a right to see some numbers put on that vague terminology.

We all want to see quality training, but I am afraid that the statement raises far more questions than it provides answers.

Des Browne: I thank the hon. Gentleman for his welcome for the obvious positive advantages that this modernisation of training for our armed forces can deliver. I agree that our ability to do that on the appropriate site, regardless of where in the United Kingdom it is, is a cause for celebration, and a celebration of the Union.

The hon. Gentleman asks for figures. He will excuse me, but considerable negotiations have still to take place with the consortium that has been judged against the evaluation process as providing both the best technical solution and the best value-for-money solution. I said that I had put significant details about that process in the Library, so the House will forgive me if I invite Members to read that information, as it is in the public domain, in the Library.

The through-life cost of the programme is about £16 billion over 25 years, which I am sure the hon. Gentleman will accept is a significant investment in the training of our armed forces. I am certain that
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investment would not have been possible within the trend of defence expenditure that we inherited, and it is consistent with our ability to increase spending on the armed forces and our ambition to be able to invest more, and to increase our spending on them in the future.

As for affordability, the purpose of making the statement at this time was to announce the outcome of the competition to identify a preferred bidder. In relation to both packages, significant detailed negotiation has still to take place with the preferred bidder, once identified. The competition has come to a close, so it is appropriate that there is a transparent and obvious announcement of who was judged—against the transparent criteria of the competition—the winner. Challenging and complex negotiations have to take place, about which there has to be a degree of commercial confidentiality. In relation to package 1, I am satisfied that we shall be able to conclude those negotiations, because the affordability of the package is broadly within the parameters that we set for ourselves.

There are significant affordability challenges for the second package. However, because the same consortium won each competition independently of the other, there are opportunities for synergy and savings that have to be explored. At the end of that process a decision will have to be made, but a decision may need to be made at some stage about an alternative way of providing training for the second part of the package. I make no bones about that; I am perfectly clear about it.

John Smith (Vale of Glamorgan) (Lab): This is a great, great day for Wales, and it will be remembered for a long time. This is good news not only for my constituents in the Vale of Glamorgan, in particular the work force at St. Athan, but also for the south Wales economy. Most importantly, this is good news for Her Majesty’s armed forces and the training that they need for the 21st century.

Will my right hon. Friend join me in paying tribute to all those who worked hard putting the bid together and supporting it? I am thinking in particular of Mike Hayle of Metrix, parliamentary colleagues on both sides of the House and in the other place, especially my hon. Friend the Member for Rhondda (Chris Bryant) and the hon. Member for Preseli Pembrokeshire (Mr. Crabb), my colleague Jane Hutt and Mr. David Swallow in the Welsh Assembly, and last but not least, readers of the South Wales Echo, who supported the campaign from day one. [Hon. Members: “This is a speech!”] Finally—

Mr. Speaker: Order. I must remind the House that the purpose of the question session is to put questions to the Minister. Perhaps the Minister could reply briefly.

Des Browne: I have been invited to pay tribute to people—and the first people I want to pay tribute to are those who presently provide the training for our armed forces. That training is working well at the moment. However, they recognise, as we recognise, that we must modernise and adapt it to meet the needs of the future, particularly in relation to tri-service deployment. I am unstinting in my praise of all those,
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including my hon. Friend, who have so consistently and appropriately lobbied for their constituents’ interests. In this case, the best indicative result at this stage of the process for the delivery of the training needs of the armed forces happens to be in the Metrix bid. To the extent that they have been able to deliver that opportunity of a solution, those involved with that bid are to be congratulated, but no more than others who took part in the process.

Bob Russell (Colchester) (LD): I thank the Secretary of State for advance notice of his statement, and I join him in paying tribute to the three members of Her Majesty’s armed forces who lost their lives in Iraq and Afghanistan over the last few days. Yesterday, I attended a thanksgiving service for 16th Air Assault Brigade, which has recently returned from Afghanistan; the roll of honour ran into double figures.

The decision is clearly good news for south Wales, but bad news for just about every other part of Britain where military training takes place. It is good news for companies that are thriving on the fruits of privatisation, but bad news for the dedicated, publicly employed training professionals who will either lose their jobs or have to leave the public sector. It is good news for the Ministry of Defence, because it can now offload the costly mega-million white elephant that was built in the wrong place for a purpose that is not wanted.

This is yet another example of the Government’s fixation with privatisation—

Mr. Speaker: Order. I am always reluctant to interrupt an hon. Gentleman, but questions must be put. This is not an opportunity for a statement, whether from the Front Bench or not. If the hon. Gentleman can rephrase what he has to say into a question, I can accept that.

Bob Russell: In the wider interests of Britain’s armed forces, is this a privatisation too far? Will the Minister say whether any other MOD privatisations are being considered?

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