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Ministry of Defence: Marine Services

My right honourable friend the Secretary of State for Defence (Des Browne) has made the following Written Ministerial Statement. Marine services embrace a wide range of waterborne and associated support activities, both in and out of port, at Portsmouth, Devonport and on the Clyde, as well as maintenance of UK and overseas moorings and navigation marks and support to a range of military operations and training. Under the current arrangements, in-port services are provided by Serco Denholm Limited, under government-owned contractor-operated arrangements, while out-of-port services are undertaken by the Royal Maritime Auxiliary Service (RMAS). Since 2002, we have been working to find a long-term service provider and, following an industry briefing day in May 2003 and a subsequent pre-qualification questionnaire exercise, four bidders were shortlisted, although two subsequently withdrew. The two remaining bidders, Serco Denholm and the Starfish Consortium—the latter comprising Babcock Naval Services (Clyde), Devonport Management Limited (Plymouth), Fleet Support Limited (Portsmouth) and Smit International (Scotland) Limited—were invited to submit two proposals offering a complete service: one of these proposals reflected a partnering arrangement with the RMAS, whereby staff remain in the MoD; the second proposal would entail TUPE transfer as appropriate. Following detailed bid evaluations, using predetermined criteria, Serco Denholm's proposal to provide the complete service, including taking ownership of MoD marine service assets, was selected as the preferred bid. Following completion of final negotiations with the company, a contract will be awarded in early December that will provide more flexibility and offer greater potential for continuous improvements. The contract for those services currently provided by Serco Denholm (vesting day 1) will commence immediately following the award of the contract, while the contract for the services currently provided by the RMAS (vesting day 2) will start at the beginning of April 2008. A key implication of the new arrangement will see the transfer of the RMAS workforce to the company under the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations. New pension arrangements are also in place that are comparable to those currently enjoyed under the Principal Civil Service Pension Scheme. A further significant aspect will be the closure of Her Majesty's Mooring Depot at Pembroke Dock within six months of vesting day 2, which will lead to around 30 redundancies. New employment opportunities are, however, expected to emerge from arrangements that will form part of the contract for the sale of the dock. The changes in the way in which the service is to be provided will result in some 200 post reductions from the combined workforce of 740 during the first five years of the new arrangement. As far as possible, these will be achieved either through natural wastage or through voluntary means, although the need for some compulsory redundancies cannot be ruled out at this stage. Throughout the tendering process, the department has engaged with the relevant trades unions and this will continue as the formal TUPE consultation process commences. This is a complex and valuable contract and the MoD's commitment has been to ensure that we get it right for all those concerned, especially those staff employed by the RMAS who will be affected by the new arrangements.