My Lords, the amendment relates to the commencement of Part 1. During earlier consideration of the Bill, both at Second Reading and in Committee, I and other noble Lords questioned why Part 1 should be enacted now. The Government had made it clear just before Second Reading that they did not intend to proceed with the GOCO model; instead, they would seek to strengthen DE&S—described as DE&S-plus—for the next three years, and maybe more, before reconsidering a GOCO solution.
It was explained that getting parliamentary time for a GOCO Bill at a later date might be difficult. The option of using the quinquennial Armed Forces legislation, due not later than November 2016, as a vehicle for Part 1 of the Bill might be adopted, but it could well be too early. Moreover, few would claim that a GOCO part would be a particularly comfortable companion to the Armed Forces Bill. This must be enacted before the five-year life of its 2011 predecessor runs out. Any delays in its progress through Parliament because of differences over the GOCO part would be best avoided. For these reasons, I now accept that the Armed Forces Bill would not be a suitable vehicle and that the inclusion of Part 1 in this Defence Reform Bill should stand.
However, because a GOCO model would be such a major step change in defence procurement arrangements and the timing of its introduction so undetermined, the Government agreed that both Houses should be given a legislative opportunity to reconsider Part 1 prior to its commencement. The Minister therefore added in Grand Committee the amendment that now forms Clause 50(3). This is a step in the right direction, but it does not go far enough.
Part 1 sets out a range of issues covering the arrangements and responsibilities of a GOCO. It contains a considerable amount of important detail; for example, on transfer of employees, financial provisions and protection of intellectual property rights. These and the rest of Part 1 are clearly essential information for any consortia that might wish to formulate a bid for a GOCO contract. In short, Part 1 is about process; it is not about principle. The principle is whether to replace DE&S-plus—not the current DE&S—with a GOCO. An affirmative resolution, the Government’s present position in the Bill, approves only Part 1 commencement and agrees the technical and administrative processes to be followed by a GOCO. This is surely not sufficient.
Ahead of passing the affirmative resolution, Parliament needs to consider as well the relative merits and risks of proceeding with a GOCO compared to those of what will be an up-and-functioning DE&S-plus. This is sometimes strangely characterised as being match fit. Would that equate to how prepared Chelsea were before thrashing Arsenal 6-0 last week, or to a joiner’s well crafted dovetail joint in a carpenter’s shop? It is not clear to me quite how MoD interprets such a vague phrase.
I turn to the amendment. The Government have acknowledged, in particular in a letter dated 19 March 2014 circulated last week among many of your Lordships by Mr Philip Dunne, Minister for Defence Equipment, Support and Technology, the need for a White Paper and an impact assessment prior to the statutory instrument. Mr Dunne says that the Government recognise that comparison between a putative GOCO and the contemporary performance of DE&S-plus is an essential prerequisite before formally approving commencement of Part 1. However, the Secretary of State has the power to set up a GOCO without the formalities of enabling legislation.
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An example of this has been trailed only in the past few days. According to the Written Ministerial Statement of 10 March, a new strategic business partner for the defence infrastructure organisation,
“will help the DIO prepare to move to an Incorporated model, currently assumed to occur in 2016, which will entail the creation of a Government Company … to manage Defence infrastructure”.—[Official Report, 10/3/14; col. WS 158.]
No White Paper; no impact assessment; no comparison for Parliament to scrutinise; and, not unusually for such a low-key approach, no great unease has been voiced nor interest aroused in this apparent new GOCO other than, perhaps, incredulity that the Government should be about to grant a 10-year strategic partner contract to Capita, the company that has made such a recent mess of Army recruiting.
Might this example not be a precedent for a future Government to rely on a minimalist approach of just the affirmative resolution for commencement of a procurement GOCO? Procurement and infrastructure are not directly comparable, though both deal in high-value assets. However, the policy and arrangements for procurement are of such overriding importance to equipping and supporting our Armed Forces and to their operational capabilities that it is surely right to strengthen the Bill when it comes to considering the principle of adopting a GOCO.
The amendment is straightforward: it does not seek to do more than introduce into the Bill undertakings given by the Minister, Mr Dunne. It will be some considerable time before the issue of a GOCO commencement might become active. With the passage of years and changes in personalities—even in Governments—assurances in a ministerial letter, or even in today’s Hansard, would seem to be less than definitively robust enough to ensure that the principle of adopting such a novel and radical change in defence procurement is thoroughly considered by Parliament at the time. I urge the Minister not to resist, but to take this away and think again before Third Reading about the importance of including the undertakings proposed by my amendment—already voiced in Mr Dunne’s letter. Parliament and the Armed Forces should have confidence that a procurement GOCO will not be adopted —if ever—without full and detailed consideration at the time. Parliament should first have to hand, by means of a White Paper and impact assessment, the fullest exposition and consideration of any GOCO’s merits and risks, compared with DE&S-plus. The amendment guarantees that security, whatever changes in personalities or Governments may happen.