I wrote on 5 May to inform the Committee of our proposal to base the permanent Headquarters of the Defence Logistics Organisation (HQ DLO) at Ensleigh in Bath, following a comprehensive investment appraisal and business case study into the available options. This proposal was subject to a full period of consultation with the Trades Unions which has now been completed. Having considered the Trades Unions' representations, in which no major objections to our proposals have been raised, I have concluded that Bath remains the site from which HQ DLO is best able to achieve the business improvements in logistics and through-life acquisition expected of it, and have, therefore, decided that the collocation at Ensleigh should proceed.

  Since the announcement of the proposal to site the DLO headquarters at Ensleigh, detailed planning for the refurbishment of the building has been undertaken. The works programme will start this month and will progress through the building on a rolling basis. Areas will be released for occupation on a monthly basis from mid-September. Some elements will start moving in as soon as the offices become available, though a majority of the 290 headquarters personnel moving to Ensleigh should relocate between January and March 2000, so that the headquarters is fully operational in its new surroundings by 1 April 2000.

  A staff preference exercise has been undertaken to identify those staff who wish to transfer to the new headquarters. I should emphasise, however, that the strategic nature of the permanent headquarters means that the decision on the location will only directly affect a small proportion of the DLO staff. No redundancy is anticipated as a result of this decision, and the Trades Unions will continue to be consulted during the implementation of the move.

  The main concern raised in formal consultation with the Trades Unions was to ensure the choice of location did not result in the rundown or closure of the other main DLO sites (Andover, RAF Wyton and Abbey Wood in Bristol). May I offer the Committee my reassurance that these three sites will continue to play a key long-term role for the DLO, not least as the future nuclei of the DLO's environmental business units, which will form a large proportion of our logistics staff. Furthermore, the demand for space at these core MoD sites from incoming organisations shows no sign of decreasing; MoD will continue to be a major employer in these areas for the foreseeable future.

22 July 1999