Twenty-Second - Improving the performance of major defence equipment contracts

Select Committee

Public Accounts Committee HC 185 3 November 2021

Report Status Government responded

Conclusions & Recommendations 24 items (8 recs)

Source View on Parliament website

Government Response (AI assessment · 21 of 24 classified)

Accepted 14

Accepted in Part 3

Acknowledged 1

Not Addressed 3

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Twenty Second report from Session 2021-22 · published 21 Jan 2022

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Recommendations & Conclusions

3 results

5 Recommendation Accepted in Part

The Department will not secure a step change in performance until it can recruit and...

Recommendation

The Department will not secure a step change in performance until it can recruit and retain the highly skilled staff that it requires. The Department continues to suffer from skills shortages in key areas critical to effective contract and programme … Read more The Department will not secure a step change in performance until it can recruit and retain the highly skilled staff that it requires. The Department continues to suffer from skills shortages in key areas critical to effective contract and programme management. It relies on expensive temporary contractors to deliver many of its programmes. We note that the cost of staff is small in comparison to the cost of the programmes the Department delivers. It pointed to constraints on its ability to recruit the right people who would help to deliver programmes to time and budget, but acknowledges that the question of paying people appropriately for their skills is being considered across government. However, we were surprised that the Department was so relaxed about losing skilled people to the private sector. We are concerned about the deliberate policy of regularly changing SROs and other senior staff working in programme teams, with individuals in post for a fraction of the contract lifecycle. Retaining and developing talent over substantive programme phases would help to stabilise delivery, with promotion linked to performance. The Department is still not doing enough to make sure that the armed forces treat the role of SRO as seriously as operational deployments. Examples of ‘double touring’ SROs on major programmes are welcome, but the Department needs to do more to prioritise and incentivise programme delivery among this cadre of senior officers. Recommendation: The Department and HM Treasury should write to the committee within the next six months setting out how together they will address the gap in skills that it needs for effective contract and supplier management; making the Department competitive in specialist labour markets; and improving retention. In its letter, the Department should also set out what more it will do to get greater continuity in the SRO role, including where feasible a single SRO for the lifetime of a project, and to recognise the role’s funda Show less

Government Response Summary

The government agrees with the recommendation and outlines actions to address skill gaps and improve retention. These include building on existing leadership training, recruiting and retaining specialist resources, introducing specific talent management for SROs, and investigating options to improve SRO continuity.

HM Treasury

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21 Conclusion Accepted in Part

Having the right people in place to manage suppliers is essential to ensure programme progress...

Conclusion

Having the right people in place to manage suppliers is essential to ensure programme progress and to hold suppliers to account. However, many of the Department’s programmes were reliant on temporary contractors to fill these roles, especially in the Department’s … Read more

Government Response Summary

The government acknowledges the competitive market for project delivery skills and outlines plans to enhance recruitment and retention of expert resources, including building on existing training programs. It is introducing specific talent and career management for SROs and investigating options to reduce SRO turnover.

HM Treasury

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22 Conclusion Accepted in Part

The Department is also reliant on contractors on some of its maritime programmes, where between...

Conclusion

The Department is also reliant on contractors on some of its maritime programmes, where between one sixth and one third of staff working on the Spearfish, Type 31e frigate and Fleet Solid Support programme teams are contractors. The Department puts … Read more

Government Response Summary

The government acknowledges the competitive market for project delivery skills and describes plans to build on existing training programs to recruit and retain expert resources. It is introducing specific talent management for SROs and investigating options like minimum tour lengths, fixed term contracts, and retention allowances to reduce SRO turnover.

HM Treasury

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