Defence Support Group - Defence Committee Contents

2  DSG Performance

13. We took evidence from DSG some two-thirds of the way through its first operating year. The memorandum we received from the MoD set out the performance of DSG to date and gave the full year forecast at that point. This information clearly showed that DSG was to that point performing well and was expected at least to meet all of its targets, and to exceed its Financial Performance and Efficiency Targets by 50% and 100% respectively.[23] Major General Ian Dale noted in evidence to us that "outputs have been fine,… they have been timely,… they have been on cost, and they have been to quality".[24]

14. The first DSG Annual Report is expected to be issued in the early summer. It will contain fuller information relating to DSG's performance in its first full year, together with its set of future targets. We fully expect the first year's performance to correspond to the forecasts given to us in January. The appropriateness of the targets set for the following period will be important. They need not just to challenge DSG to become an even more effective body, but to stress the high levels of performance required better to support the UK's Armed Forces, especially while they are still engaged in significant and complex attritional operations in Afghanistan.

15. Continuing pressure exists for the Government, and its departments of state such as the MoD, to realise further cost savings. There needs to be some attempt to identify an appropriate level of efficiency savings from all associated bodies, including agencies and trading funds such as DSG, where possible. The efficiency savings captured from ABRO and DARA during amalgamation, and from DSG during its first year of operation, have already contributed to departmental savings: seeking further cuts which might compromise DSG's operational capabilities and skills according to some arbitrary allocation of savings expected would be wrong-headed.

DSG Personnel

16. The quality and integrity of the work conducted by DSG for the MoD and the UK's Armed Forces depends to a very great extent upon the skills and vigour of the workforce of DSG. Maintaining the level of skills available in both ABRO and DARA through the process of merger and beyond, retaining such skills, recruiting effectively in order to allow such skills to be passed on and keeping high the level of DSG commitment to supporting the Armed Forces, were all therefore vital.

17. DSG in the first part of its first year of operation seems to have dealt well with this challenge. As was noted above, the MoD noted no hiatus in the service of ABRO and DARA personnel - now within DSG - to the Armed Forces, nor any lessening in the quality of that service. Unique skills within DSG connected with its work on legacy equipment or in areas of operationally sovereign capability have been maintained and the organisation continues to seek to take on capable new employees, to train apprentices and to ensure that its skills base endures over time.

18. DSG is rightly proud of the tradition of apprenticeships it inherited from ABRO and DARA. As Archie Hughes acknowledged in his evidence to us:

"...we do not have any difficulty in recruiting for apprenticeships. People who go through a DSG apprenticeship... come out at the end with a passport that will last them their entire life... because it is an excellent set of training they get."[25]

Such apprenticeships will remain important to maintain DSG's skills. Given the need for similar skills in the private sector, both within and without the defence industries, careful attention will have to be given to the quantity and quality of those accepted for apprenticeships in order to protect the historic and evolving skills sets available within DSG. We are impressed by DSG's commitment to apprenticeships which we feel shows a real determination to provide over the long-term a continuing high level of support to the UK's Armed Forces.

19. In oral evidence we also asked Archie Hughes about skills shortages. We were told that DSG does not have skill shortages "at the base skills level in entering in technical and engineering apprentices". However, there is a problem with geographical distribution:

"We tend to have some skills shortages in the geographical bases that make it difficult. We have a facility in Colchester where we employ through Colchester about 140 people. It is a bit more difficult recruiting people in that area than, maybe, Catterick."[26]

This difficulty was however offset to some extent by the organisation's ability to "move the work to the people and vice versa". Moreover, applications for permanent jobs with DSG were very popular because DSG is "seen as a good employer by most places in the country".[27]

20. However, while engineering and other relevant hard skills are available, there was a difficulty in getting people "up through the business and into the managerial areas."[28] There was a need to grow DSG's "capability of programme management, project management, and some of the high level managerial skills".[29] While some people could go from apprenticeships to permanent junior posts and then to management, it was still felt that DSG needed to bring in some key managerial people from outside. This seems to reflect what was a possible weakness in ABRO and DARA which the executive team intends to remedy. We would be grateful for the MoD's assessment of the particular weaknesses in the area of high level managerial skills which DSG inherited from its predecessor organisations, ABRO and DARA.

21. Key to maintaining a full complement of capable staff within DSG is being able to provide pay that does not suffer too much in comparison with what could be obtained for similar work in the private sector. While no doubt a good proportion of DSG's staff by preference work in the public sector, a degree of comparability of pay is helpful to retention. Archie Hughes explained to us that while DSG does not offer "industry benchmark levels of pay" it does offer "sufficient levels of pay to retain the people" that it has.[30] Current economic conditions no doubt favour recruitment and retention; but some of the weaknesses noted above in terms of variable conditions across DSG's sites for recruitment and retention are the result of the availability of alternative, better remunerated, employment of a similar nature as DSG offers in the areas concerned. We request a note from the MoD setting out how DSG intends to deal with distributional problems relating to the recruitment and retention of its workforce, bearing in mind that its unique geographical footprint is an asset it presumably does not want to lose.

22. A question was also raised in oral evidence about comparative levels of productivity or performance between DSG and analogous private sector bodies. Archie Hughes claimed that it was difficult to set up comparative data between DSG and the private sector since "the private sector does not do what DSG does", but he said that he paid considerable attention to internal benchmarks. He noted that different sites operated at different levels of productivity. He was committed to using best practice to drive up productivity where it was less than satisfactory. Overall, he told us that DSG's productivity was "no different to an engineering manufacturing business elsewhere."[31]

Support for Operations

23. A key incentive for keeping high levels of performance within DSG is its personnel's awareness of the direct link between what they do and maintaining the capabilities of the Armed Forces in operational theatre. The flexibility and responsiveness of DSG is also to a good extent founded upon an understanding between its staff and the military personnel whom they support that they are all working together as one team. Clearly, not all of DSG's work is focused directly or explicitly upon operational theatre. Archie Hughes was asked in evidence what proportion of his business was dependent upon operational requirements and what proportion of his staff was engaged upon such work. While he claimed that only 15% of his funding came from the Treasury—directly to support operational activities—it is clearly the case that a much greater proportion of DSG work sustains the capability to maintain UK operations in Afghanistan (and in Iraq up to drawdown) directly and indirectly. Major General Ian Dale made the point to us that DSG's dealings with "the land district load" is a support to operations because it frees up military personnel for the front and immediate support lines, even though the nature of the work seems routine and otherwise unconnected to operations abroad.[32] Below is a table setting out the nature of DSG's support to operations.Table 1: Summary of operational impacts on DSG

a.   Current:   Continued support through Programme and District Load work provided in UK for equipments/assemblies returned and repaired under the main Land commercial agreement.

b.  Future:   Regeneration of TELIC equipment in 2009 will sustain demand for maintenance, repair and overhaul of returning Armoured Fighting and Support vehicles plus a wide range of other war-fighting equipment.


a.  Current:  Continued support through Programme Load and District Load work provided in UK for equipments/assemblies returned and repaired under the main Land   commercial agreement and on-going support to fitment/integration of UORs.

b.  Future:  Continued support to HERRICK will be required and will likely see;

i.   A continued requirement to fit/integrate UOR's.

ii.   A continued requirement to repair battle damaged equipments in UK.

iii.  A likely requirement to supply manpower to the Equipment Sustainability   Solution (ESS), Camp BASTION; planned In-Service Date Apr 2010.

iv.  Continued support to manage the Operational Training Equipment Pool   (OTEP).

v.  A re-distribution in overall workload for DSG through the creation of the   ESS in Camp BASTION[33].

vi.  DSG flexibility to adjust priorities at short notice including the potential to   deploy in support of the ESS.

Source: Ministry of Defence[34]

24. This desire within the DSG workforce to help support and sustain UK operations abroad is made more concrete still by the deployment of DSG personnel to theatre. This is something about which we sought information in preparation for the session with Archie Hughes on 20 January. The MoD stressed in its written memorandum, received before the evidence session, how the deployment of its personnel to theatre characterised "its utility and flexibility during critical Front Line Operations".[35] A table below sets out DSG deployments to theatre between April 2007 and January 2009, involving some 63 personnel, some of whom were deployed on more than one occasion.

Table 2: DSG staff in operational theatres
Op Theatre From To Duration (days) No of Personnel Deployed Activity
1 Iraq29 Apr 07 24 May 0726 17Fitting of Electronic Counter Measures (ECM) Installation kits on vehicles.
2 Iraq21 Jun 07 1 Jul 0711 6Fitting of WARRIOR UOR upgrades including: Environmental Control Units (ECU), and ECM kits.
3 Afghanistan 8 Aug 0720 Aug 07 137 Fitting of WARRIOR UOR upgrades including: ECU, ECM and Additional Protective armour (WRAP 2). This was a continuation of DSG work carried out in barracks in Germany.
4 Kuwait22 Oct 07 8 Feb 08Up to 108 Up to 15Fitting of WARRIOR UOR upgrades; ECM and WRAP 2. Teams/individuals changed throughout the period.
5 Iraq14 Jan 08 6 Feb 0824 8Fitting of Mine blast protection to CHALLENGER 2 Main Battle Tanks.
6 Iraq17 Mar 08 8 Apr 0833 5Fitting of Mine blast protection to CHALLENGER 2 Main Battle Tanks.
7 Iraq/


13 Jun 08 3 Jul 08 211 Specialist support to ECM eqpts.
8 Iraq8 Sep 08 18 Oct 0841 3Fitting of Mine blast protection to CHALLENGER 2 Main Battle Tanks and CHALLENGER Armoured Recovery Vehs.
9 Iraq/


5 Jan 09 26 Jan 09 211 Specialist support to ECM eqpts.

Source: Ministry of Defence[36]

25. DSG only deploys volunteers to theatre and is oversubscribed for volunteers when it advertises such deployments.[37] Some DSG sites are inevitably more involved in deployments than others, considering the skill sets and experience required: deployed personnel have come from DSG sites in Donnington, Bovington, Catterick, Colchester, Stirling and Warminster. While in theatre, DSG staff work under REME command; many have won campaign medals for their work.[38] Indeed, the day before we took evidence from Archie Hughes, on 19 January 2009, General Sir Kevin O'Donoghue, Chief of Defence Materiel, presented medals to seven DSG staff for their contribution and commitment to supporting the Armed Forces in theatre manifested by their voluntary deployment to Basra.[39] We express our gratitude to all those DSG employees who have volunteered, sometimes on more than once occasion, to deploy in theatre in support of operations. Such commitment is of great value to DSG and to our Armed Forces and clearly indicates the high level of dedication amongst the staff within DSG.

The Equipment Sustainability Solution

26. One important development in which DSG hopes to be involved during the latter half of 2009 and into 2010 and beyond is the construction and operation of the Equipment Sustainability Solution (ESS) at Camp Bastion in Afghanistan. This is an equipment support facility that it is hoped will be operational from April 2010, in recognition of the enduring nature of operations in Afghanistan, which will be able to deal with recuperation, repair and modification in that theatre.[40] It is expected to be a more efficient, cost-effective and operationally sound way of dealing with equipments. Much of this would otherwise have to be shipped out of theatre, perhaps to the UK, replaced or otherwise dealt with at greater cost and over a longer period of time.

27. We asked Major General Ian Dale about this facility and about DSG's role in setting it up and operating it. He explained that it would be:

".. a static facility inside a secure compound. It is therefore amenable to being staffed and run by civilian components. That could be a combination of the Defence Support Group expertise at various stages... It could also be forward support representatives for industry... So it could be a combination of contractors, DSG and REME soldiers... I would probably envisage REME soldiers being the backbone of it, supplemented and augmented as demanded by the requirements by DSG and industry."[41]

In supplementary evidence to us, the MoD noted that DSG staff have been invited to participate in "a very small way" in the construction phase of the ESS—"by giving specialist advice... on infra-structure and facilities aspects." The contract is being managed by Permanent Joint Head Quarters (PJHQ) and the prime contractor (for both construction and operation) is KBR. Following construction, which is expected to end in April 2010, KBR will supervise under sub-contracts various elements of delivering repair capability. DSG will be invited to participate in the competition for these sub-contracts on account of "its position within MoD; ... its proven track record; ... its knowledge of equipments, and ... its security status in regard to repairing certain sensitive equipments." It is currently expected that sub-contracts will be awarded later in 2009.[42]

28. The Equipment Sustainability Solution (ESS) provides an excellent opportunity for DSG to maintain its strong partnership with industry and continue to provide excellent quality support to the UK's Armed Forces in theatre. We very much hope that DSG is successful in the competition for sub-contracts for work on the ESS. This would be a positive development for DSG, for industry and for the Armed Forces, who will all need to work in ever closer cooperation as the conflict in Afghanistan persists.

Urgent Operational Requirements and Recuperation

29. As we have seen, DSG staff perform a very important role in theatre, and in support to operations in the UK, assisting with the modification of equipment, its repair or its general recuperation. Work in carrying out Urgent Operational Requirements (UORs) on vehicles does not fall only to DSG, nor is most of it done in theatre. At least until the ESS in Camp Bastion is up-and-running, most UOR work is carried out away from theatre by the defence industry and DSG, the latter sometimes working on a sub-contract for the former.

30. While it is not easy to specify how much time or manpower DSG dedicates to UORs, the continuing significant presence of UOR costs in the MoD Estimates can only mean that some staff and resources within DSG need to be redeployed to UOR tasks, and sometimes at short notice; and, as we saw when conducting our inquiry into DE&S staff and UORs, often the more able and experienced employees and teams find themselves working on UOR programmes.[43] The Government response to our Report, Defence Equipment 2009, acknowledged that this extra burden of work and shift of expertise was causing some challenges for DE&S.[44]

31. While overall UOR expenditure this Financial Year (FY) is expected to be less than that for the last FY, expenditure this FY for Afghanistan will not be so different than that last year for the same theatre (drawdown from Iraq creating the difference in overall figures). The rate of UOR activity is showing no real sign of diminution in that theatre. (This activity of course covers more than equipment - it also covers structures and other urgently provided assets or modifications.) In FY 2008-09, it was expected that £1,054 million would be spent on UORs, £791 million of which would be for the Afghan theatre. FY 2009-10 is expected to see costs of £635 million on UORs for Afghanistan.[45] (Further costs of £424 million, urgently required but kept separate from the UOR budget in this FY, relate to the Protected Mobility Package:[46] this raises urgent operational costs to £1,057 million for the Afghan theatre alone this FY.)

32. Major General Ian Dale noted that DSG is already taking on more work as a result of operations, covering for UK military personnel deployed overseas or otherwise busy in support of operations.[47] UOR activity presents a distinct challenge to DSG even if the number of people in its workforce directly involved is not great. In addition to this, DSG hopes to play a key part in the expected programme of equipment recuperation following drawdown from Iraq.[48] We have taken evidence on this programme, during our inquiry into Readiness and recuperation for the contingent tasks of today, and we are aware that a significant amount of work will fall to be done by defence contractors and DSG once this major recuperation programme is given the green light.[49]

33. We are concerned that current uncertainties with regard to the size and timescale for the MoD's recuperation programme following drawdown in Iraq might create difficulties even for an organisation as flexible and committed as DSG. We call on the MoD to ensure that DSG is as well apprised as possible of what it will need to do and over what time period within the recuperation programme. DSG will itself need to monitor the continuing, if not increasing, demands being placed upon it, directly or indirectly, by current operations. We recommend that the MoD, in its response to this Report, make clear the anticipated levels of future manpower and resource commitment within DSG to the ESS, to the recuperation programme, and to UORs, set alongside its capacity to deal with its core non-operational areas of activity.

34. The sustained and thorough commitment of DSG staff to supporting our Armed Forces in operational theatre is there for everyone to see. We commend DSG staff for this full-hearted commitment and for maintaining a high level of performance in support of operations.

23   Ev 18, para 7 and Ev 21-22, Annex A Back

24   Q 8 Back

25   Q 55 Back

26   ibid. Back

27   Q 57 Back

28   ibid. Back

29   Q 57 Back

30   Q 58 Back

31   Q 59 Back

32   Q 60 Back

33   Assuming DSG are invited to provide a direct labour workforce at the ESS under acceptable commercial arrangements.  Back

34   Ev 23 Back

35   Ev 20, para 31 Back

36   Ev 21 Back

37   Q 77 and Ev 21, para 32 Back

38   Ev 21, paras 33-34 Back

39   Q 77 Back

40   Ev 24, A4 Back

41   Q 70 Back

42   Ev 24, A4 Back

43   Defence Committee, Third Report of Session 2008-09, Defence Equipment 2009, HC 107, para 58 Back

44   Defence Committee, First Special Report of Session 2008-09, Defence Equipment 2009: Government response to the Committee's Third Report of Session 2008-09, HC 491, response to recommendation 15 Back

45   Defence Committee, Fourth Report of Session 2008-09, Spring Supplementary Estimate 2008-09, HC 301, para 15 Back

46   This is from the Government response to the Committee's Fourth Report of Session 2008-09 on the Spring Supplementary Estimate (response to recommendations 9 and 10) currently at: (to be published in the Committee's forthcoming Report on the Ministry of Defence Main Estimates) Back

47   Q 60 Back

48   Qq 61 and 78 Back

49   See Defence Committee website, transcripts of oral evidence for 3 and 10 March and 28 April (to be published in the Committee's forthcoming Report on Readiness and recuperation for the contingent tasks of today.) Back

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