House of Commons - Defence

Select Committee on Defence Eighth Report

5 Change programme

55. The MoD's memorandum states that Dstl is

an indispensable source of science and technology at the heart of defence. However, to maintain and build on its position and reputation, Dstl must adapt to new challenges and become more integrated both internally and with its customers.[89]

In 2004, Dstl embarked on a major change programme with the aim of transforming Dstl into an integrated laboratory ""i lab"" and improving the coherence and effectiveness of its activities. The three capital intensive aspects of the ""i lab"" are:

site rationalisation (Project Inspire);
the provision of an Integrated Business System (iCAS); and
the implementation of an electronic document and records management system (EDRM).[90]

56. The iCAS project will replace Dstl's current business management system (FISP), which had been in use for seven years, and had become unreliable and expensive to maintain. The project was approved by the Dstl investment panel in early 2005 and is due for completion by February 2008.[91]

57. The EDRM project had been driven by a requirement for improved access to information helping Dstl staff find the information they needed quickly and easily. The project was endorsed in January 2003. The MoD's memorandum states that "following successful detailed design, testing and piloting of the solution, the first roll out of EDRM is due to take place in Summer 2007, with full implementation due in 2008.[92]

Site rationalisation

58. The aim of the site rationalisation is to achieve more effective working between staff, who are spread over 15 different sites. The Dstl Board decided to rationalise Dstl's activities onto three core sites: Porton Down (Wiltshire); Fort Halstead (Kent); and Portsdown West (Hampshire), by 2009. The plan was approved by MoD Ministers in November 2003.[93]

59. The Dstl estate is being reduced to three core sites in order to:

reduce fragmentation of Dstl's science and technology capability base to maximise synergy and coherence of delivery to customers;
sustain Dstl's long-term future by minimising overheads and reducing unnecessary duplication in laboratories, facilities and support functions; and
rationalise the sourcing of facilities management services to one contract.[94]

60. Dstl has set up a project to cover: the construction needed at Porton Down and Portsdown West; the three core site plan; and the provision of facilities management for the three sites.[95] In terms of the progress made:

the main construction work at Porton Down and Portsdown West was expected to commence in November 2006, with the new buildings at Porton Down due for completion in Summer 2008 and at Portsdown West in Spring 2009;[96]
a 15 year facilities management contact was awarded to Serco Defence and Aerospace on 24 July 2006;[97]
with the completion of the new accommodation, Dstl will be moving approximately 1,100 of its staff in approximately equal number to either Porton Down or Portsdown West from Farnborough, Malvern, Winfrith and Bedford.[98]

COST OF RATIONALISATION

61. We asked how much the building work was going to cost. Dr Saunders told us that

we have gone for a project that is a mixture of building a new build at Porton Down and refurbishing our site at Portsdown West. We have gone for a maximum price of £94.7 million and a target price of £92 million.[99]

Dstl is funding the cost from its retained profits.[100] The MoD Ministers had approved the use of the retained profits for the rationalisation programme,[101] and had approved the reduction from 15 sites to three.[102]

62. Dstl had considered two site, three site and four site options for the core sites. The three site option came out best in the cost-benefit analysis.[103] We asked whether the cost-benefit analysis had considered the impact on the local community. Dr Saunders told us that costs such as road improvements were considered and also the impact on services, such as local schools.[104] She said that discussions with local authorities had been very positive. Dstl had been asked to make a contribution to the costs of roads and had agreed to that. At Porton there were to be upgrades to one of the roads and building a roundabout. Dr Saunders told us that "£3 million or so of investment will be put into that to make those improvements".[105]

OWNERSHIP OF SITES

63. Of the three core sites, Dstl owns Portsdown West and Porton Down and has a 97 year lease on Fort Halstead, which is owned by QinetiQ.[106] The majority of the sites which Dstl is leaving are owned by QinetiQ.[107] Dr Saunders told us that part of the rationale for choosing the three core sites was that Dstl

did want to split ourselves off from QinetiQ…. we wanted to have distinctive sites that were definitely our sites.... We chose the sites on the basis of what made most sense from the point of view of the type of work we are going to be doing in the future and the numbers of people that it made sense to put into those buildings and that sort of site.[108]

As Dstl does not own any of the 12 non-core sites it will not benefit from the sale of any of these sites.[109]

Progress in delivering the change programme

64. In Dstl's Annual Report and Accounts 2005-06, Dstl's Chairman stated that "excellent progress had been made on various aspects of "i lab" this year. With building plans finalised and planning permission secured, Project Inspire can now begin".[110] Dstl's Chief Executive stated that "the "i lab" programme is starting to deliver tangible benefits".[111]

65. Dstl has embarked on a major change programme, intended to transform it into an integrated laboratory or ""i lab"". The programme includes a substantial site rationalisation: the building and refurbishment work associated with this has a target price of £92 million. We look to Dstl to draw on outside project management expertise to monitor closely progress against cost and time targets relating to this work so that action can be taken if cost increases or delays look likely.

66. It will be important for Dstl to monitor whether the expected benefits from the ""i lab"" change programme are delivered. We expect Dstl to put in place arrangements to track both the qualitative and quantitative improvements that flow from the change programme.

89 Ev 26 Back

90 Ibid. Back

91 Ev 27 Back

92 Ibid. Back

93 Ev 26 Back

94 Ministry of Defence, Annual Report and Accounts 2005-06, HC 1394, pp 264-265 Back

95 Ev 26 Back

96 Ev 27 Back

97 Ev 26 Back

98 Ev 27 Back

99 Q 39 Back

100 Q 40 Back