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
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,
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".
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."
There was a need to grow DSG's "capability of programme management,
project management, and some of the high level managerial skills".
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.
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."
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 Treasurydirectly
to support operational activitiesit 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. Below is
a table setting out the nature of DSG's support to operations.Table
1: Summary of operational impacts on DSG