Examination of Witness (Questions 112-119)
SIR PETER
SPENCER KCB
10 OCTOBER 2006
Q112 Chairman: Sir Peter, good morning
and welcome. Thank you very much for coming to give evidence about
procurement to the Committee.
Sir Peter Spencer: Thank you for
inviting me.
Q113 Chairman: Not at all. There
are four main areas that we want to cover, but I think on two
of them we will be asking questions in writing to you, and those
are the performance targets and the DPA's performance against
your targets, and also the smaller projects that we took evidence
on earlier in the year. We think that those could probably best
be covered in writing rather than by cross-examination of you.[1]
So the ones that we want to concentrate on mostly today are the
merger between the DLO and the DPA and various major projects,
including the Astute submarine, the carriers and others. So if
I may begin, Sir Peter, with a question about the merger of the
DLO and the DPA. We were told that the way the organisation was
going to be run and the performance and management system would
be set up by September. Has that happened?
Sir Peter Spencer: The organisation
has been set up and announced, and in broad outline we have described
the purpose, the aims and the objectives, and we have named the
key players that we can who will be in board level positions.
There are a number of other work strands which are at varying
degrees of completion which are going to focus in on the detail
of how the performance metrics will be set, both for the organisation
and for the Ministry of Defence as a whole. Central to this is
the principle at the heart of the Defence Industrial Strategy
which is that we should measure performance in terms of delivering
through-life capability.
Q114 Chairman: Okay. Have you worked
out precisely how that is to be achieved within the new organisation?
Sir Peter Spencer: Without wishing
to be pedantic, if I could just stand back from this and say that
there are four phases to the project. Phase one was to define
what the organisation would look like and set out in broad principles
how it will operate.
Q115 Chairman: That was to finish
by September?
Sir Peter Spencer: The end of
September and that was completed on time.
Q116 Chairman: That was completed
on time.
Sir Peter Spencer: Phase two has
now begun with giving a set of instructions to each of the two
star board members to define in outline what it is we want them
to do, to tell them what their job is, define in outline what
it is we wish them to deliver, and for them to do the more detailed
work as to how in each of their areas they might need to make
some degree of change to deliver the targets which they have been
set and to live within the resources which have been provisionally
earmarked for them, which we will achieve at the end of December.
Q117 Chairman: Sorry, when will you
achieve phase two?
Sir Peter Spencer: Phase two is
planned to be achieved at the end of December, which then initiates
phase three, which is the next level of detailed work of engaging
with the workforce in a much more detailed way to explain what
it means for them. However, we will have deep chilled the design
by that stage so we will know we have got something which is adequate
for the purpose as a new organisation which vests on 2 April (because
the 1st is a Sunday). That is important because there will be
a lot of communication with all of the people involved, and by
communication of course I mean not just telling them how it is
going to be but listening to the particular points that they have
got. There will still then be in the very fine detail the same
sort of opportunities as are happening now to consult because
although the leaders with the two stars are already consulting
with the people that work with them. All of this draws upon what
we did when we did the DPA Forward project inside my own agency.
It recognises that the people who are really very familiar with
the patterns, in the main, will go a very long way towards implementing
change, so long as it is change which has been explained to them
properly, and you have given them boundaries within which you
want them to operate. But you do not try to dictate explicit,
cookery book instructions to them because it does not work.
Q118 Chairman: Okay, that is phase
three. Phase three will be completed by when?
Sir Peter Spencer: It will be
completed by 1 April so from 2 April phase four is the first year
of operation of the new organisation and during that year there
will then be the first of the post-project evaluations to take
a look to see to what extent the organisation is going to be delivering
what is needed and then to be prepared to make any further adjustments
at the end of that first year. During that first year the intention
is to measure the performance publicly by the existing PSA targets
for delivery of projects and by the same targets that are in place
for the current Defence Logistics Organisation, but to shadow
trade in a new set of targets which will be optimised to measure
the organisation's ability to deliver year-on-year improvements
in through-life capability management and some other performance
metrics as well, including agility in terms of responding more
rapidly than we do at the moment to the needs of the Armed Forces.
Q119 Mr Jones: Yourself and the Civil
Service do not actually believe in this merger, do you?
Sir Peter Spencer: Yes I do, and
that is a passionate belief.
1 See Ev 49 Back
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