Defence Reform Bill

Written evidence from the Defence Police Federation (DR 01)

The Ministry of Defence Police

1. The Ministry of Defence Police (MDP) performs a vital service in protecting Ministry of Defence (MOD) assets and the wider general public from terrorist threats by providing general policing. It is primarily responsible for delivering police, investigative and guarding services to MOD property and installations, personnel and their families.

2. The MDP is a unique and specialised national civilian police service, focused on the defence community, providing it with the same servic   e as any of Britain's local police forces, as well as armed and unarmed security at key defence sites, and the protection of Britain's nuclear deterrent and Critical National Infrastructure.

3. The MDP is the MOD’s own dedicated civil Police Force of approximately 2,600 officers – all with constabulary powers – and in the region of some 250 civilian staff. It operates in two functional (Nuclear & Territorial) Divisions, serving MOD establishments and units throughout the United Kingdom and is headquartered in Wethersfield in Essex.

4. The MDP provides defensive armed policing – with all our officers trained and authorised to carry firearms, as well as less lethal options, outside the wire and has full constabulary powers within its areas of responsibility.

5. The Defence Police Federation is the staff association of the MDP. It was founded in 1971 after the amalgamation of the representative bodies of the police forces for each branch of the Armed Forces, from which the MDP was formed.

The key functions of the Ministry of Defence Police

6. The Statement of Requirement relating to the MDP identifies a number of key outputs:

· armed guarding and counter terrorist activities;

· protection of defence personnel and property and uniformed general policing;

· criminal investigations and fraud;

· international policing and training;

· the largest number of specialist search dogs of all UK police forces

· protection of the UK’s nuclear assets, both at bases and in road conveys; and

· special capabilities, such as the largest marine support unit of any of the police forces in the UK

Views on the Defence Reform Bill

7. The Defence Reform Bill directly affects the MDP, with Clause 5 introduced to ensure that the MDP can continue to exercise jurisdiction on premises used by a potential GoCo contractor for the provision of defence procurement services – including any vehicles, vessels or aircraft and any new site utilised by the contractor for these purposes. The clause is also intended to allow the MDP to investigate criminal offences, including fraud, which relate to the provision of defence procurement services – this includes criminal offences which concern contracts between the contractor and third party contractors.

Financial risks/fraud and loss

8. The DPF has a number of specific concerns about the potential operation of a GoCo, which we have outlined below – we hope that the Committee will be able to examine these issues during its consideration of the Bill.

9. It is a well acknowledged fact that Defence Equipment and Support needs significant improvements in the way it functions, but we are concerned about whether the proposed arrangements for a GoCo will adequately address the problems identified with how defence acquisition works at the moment. For example, will it address the incentives which lead personnel to add costs to procurement projects once they have been approved, allowing the cost of procurement projects to spiral out of control? Without this, it is difficult to see how the GoCo arrangements could save significant amounts of money.

10. One of our key concerns relates to how the financial risks arising from procurement will be distributed, given that the GoCo would have shareholders and aim to make a profit. If the GoCo loses money, will it be responsible for these losses, or will they be passed onto the MOD? Clarity on these arrangements is vital if the MOD is to make genuine savings through this model. The explanatory notes to the Bill suggest that while the Secretary of State will remain responsible for defence procurement, it may be necessary for the contractor to exercise a discretion of the Secretary of State in respect of procurement functions.

11. Concerns about accountability have been raised by other stakeholders – notably RUSI, who have also raised questions about ministerial and parliamentary oversight, the financial risks involved, and how the risks will be assessed. ADS, the defence and aerospace trade group, has also raised concerns about how financial risk will be divided between the MOD and the GoCo.

12. We would also be keen to understand the assurance and monitoring process for the GoCo in further detail; the DPF has previously expressed concerns about the assurance processes operating within the MOD. The MOD’s current methods of accounting for equipment and resources is wholly unfit for purpose and the level of loss within the Department masks a greater problem of theft than the MOD is prepared to admit. Problems have been identified with accounting and storage process, and many thefts are written off as losses – this is not only inefficient, it also puts large amounts of taxpayers’ money at risk.

13. Our concern that is that this lack of accountability could be further increased by the move to a GoCo structure, with ministers able to distance themselves from problems. We would welcome further clarity on the monitoring and assurance processes which will be put in place.

14. In addition to this, we believe that MDP officers (principally those within Criminal Investigation Department) could be used more proactively and effectively to reduce the levels of loss/theft suffered by the MOD. Instead, the MOD has moved to significantly reduce the role of the MDP CID in investigating fraud and loss. The MOD has also decided to only investigate crime above a certain financial value – ignoring crimes such as fraud on travel expenses which are smaller individually but together cost a significant amount of money per year. In addition, these smaller-scale crimes tend to be simpler to investigate and take less time to complete – meaning there are greater opportunities for recovering money, including through asset forfeiture.

15. There has been some discussion of setting up an MOD wide counter fraud and loss team, but progress on this has stalled and it would be useful to find out further information about future plans for this.

16. With significant amounts of public money being spent by the GoCo, it is vital that a proper assurance process is in place, and that it is clear who will ultimately be held responsible for fraud and loss. This is particularly important since Clause 3 of the Bill states that the MOD will be liable for any claims made against a current or former contractor.

Other concerns

17. It would also be helpful to have more detail on Clause 2, which sets out provisions for the Secretary of State to provide financial assistance to the contractor - as so far detail has not been provided on the circumstances where such financial assistance may be offered.

18. There needs to be consideration of how security will be provided to sites operated by the GoCo to ensure that this does not lead to unnecessary costs – as an example, QinetiQ makes use of security from the MDP to fulfil license requirements – but adds a 5% mark up when this is billed back to the MOD.

19. We understand that services relating to naval bases and defence munitions sites will inititally be out of the scope of the GoCo, but given the strategic importance of these sites we would be keen to gain clarify on this in the future.

Conclusion

20. The Bill will directly affect the Ministry of Defence Police given its responsibility for providing security for defence establishments, assets and personnel; in addition to investigating incidents and offences pertaining to the Ministry of Defence. As such, officers of the MDP should continue to exercise their current levels of jurisdiction under a GoCo model.

21. A GoCo must address current issues of procurement within DE&S, in particular those of incentives leading to personnel adding costs to procurement projects, thereby causing overall cost to increase exponentially. Failure to address this issue will significantly limit a GoCo’s ability to deliver savings.

22. The issue of whether it is the private sector partner or the MOD that shoulders financial risk under a GoCo model must be clarified and this will require a reconciliation of the MOD’s desire to achieve savings with a private sector contractor’s presumed interest in generating profit.

23. There must similarly be greater clarity as to the accountability of a GoCo and the nature of ministerial and parliamentary oversight.

24. There must be clarity over the GoCo’s assurance processes, given that the processes employed by DE&S are unfit for purpose, resulting in significant losses to the MOD and potentially masking a larger issue of theft from the Department.

25. The MDP CID should be used more effectively and proactively than at present to minimise the loss and theft of assets under a GoCo model. This includes a greater emphasis on the investigation of smaller scale thefts and frauds as opposed to a focus on ‘prestige’ offences in the form of large-scale complex frauds. Addressing these smaller incidents could result in the recovery of significant assets for the MOD.

26. There must be clarity on the responsibility of the secretary of state to potentially provide financial assistance to a private sector contractor within a GoCo model.

August 2013