Whilst possibly not being direct evidence and, we note, already past the deadline for submissions, I write to express concerns of staff caught up in DE&S plans for relocation.

  There are three major areas which we believe should be examined by the Defence Committee:

1.   INVESTMENT APPROVAL

  We believe that the Investment Appraisal for DE&S Relocation is fundamentally flawed inasmuch as there is only one comparator against the "do nothing" option. In essence, so long as the figures show a potential saving, the Investment Approval Board has no other yardstick for comparative costings and must therefore be obliged to approve the proposal. We are sure you will appreciate that there is always going to be a degree of fluidity about figures projected 25 years forward so a claimed saving IRO £200 million over 25 years is by no means as certain as it might appear. Neither is it a significant sum in the context of £16 billion expenditure per year. The Committee may be in a position to seek greater detail.

  From a worm's eye view, it is extremely difficult to understand how the very high cost (based on capitation costs IRO £50K per person) of relocating thousands of staff could ever be recovered by business efficiencies. Additionally, even if it can be recovered, does it stand up as a worthwhile investment in consideration of other Budget challenges faced by the Department? There is no shortfall in DE&S whilst Service accommodation, medical care and compensation for injury have all been recently highlighted as areas where Defence is guilty of underspending for decades.

2.  RISK

  The proposal to relocate DE&S is deeply unpopular from a staff perspective. People simply do not wish to tear up their family and social roots in order to follow their jobs to the high cost of living Bath/Bristol area. Similar initiatives in other Departments have seen mass resignations resulting in serious shortfalls of staff in the new area. We believe that much the same picture will be true for Defence and early indications agree. Not only is there a risk of non-transfer of staff, the available pool of people and skills in the Bath/Bristol area is already exhausted, posing severe challenges for recruitment of replacements. Commercial, Technical, Inventory and Finance specialists are employed in large numbers within DE&S; even when recruited, there will be a significant training challenge for the organisation to bring new recruits "up to speed".

  The risk is clear, potential disruption of front line support arising from lack of suitably trained staff. Mitigation measures do not seem to have been considered in any depth but. again, the Committee may be in a position to seek further detail.

3.  BUSINESS CHANGE

  In the midst of the Relocation turmoil, DE&S is also engaging in a program of massive business change as foreshadowed by Richard Brooks' publication of "Setting the People Agenda to Increase Business Effectiveness in the First Year of Operation". The program, whilst still in formative stages, is certain to lead to ground-breaking changes to the way DE&S does its business over the next few years. We are likely to see large numbers (thousands) of staff "savings" arising from full implementation of the ideas put forward and the continued sharpening of focus on the decider role for DE&S. How then can it make sense to relocate thousands of staff in parallel (or slightly prior) to such a far-reaching initiative? Many of the relocations are certain to be wasteful because there just will not be the numbers of jobs available in the end-state DE&S organisation. No sensible business organisation would attempt such huge challenges in tandem, nor would shareholders accept the costs of unnecessary relocation. Common sense demands that Business Change on this scale is completed before any relocation but no such considerations appear to have been made. The Committee may be able to discover more. In closing, I should point out that there has been a degree of consideration for some of the higher profile procurement projects. PECOC, for example, has been ring-fenced to prevent relocation challenges from interfering with the project. However, the combined risks of unsuccesful relocation and unsuccesful business change pose a powerful threat to the entire DE&S business and therefore to continuity of support to the front line. The waste of public money associated with the venture is, we believe, actually a secondary consideration.

16 October 2007