Outsourced Contracts

The Ministry of Defence regularly monitors the performance of all contractors, including outsourced key services. This is done via the use of contract performance indicators and action is taken when standards are not met.

Capita has completely failed to fulfil its contract for Army recruitment. This service should now be brought back in-house. When will the Government accept that their dogmatic insistence on outsourcing everything imaginable to the private sector is failing our armed forces and the taxpayer?

I do not agree with the hon. Gentleman’s assessment. My right hon. Friend the Minister for the Armed Forces, may have the opportunity to speak on this matter in a little bit more detail in a later question, but we are seeing a change in the trend. More people are showing an indication of interest in the armed forces. It is important we translate that into ensuring they actually sign up, but last year alone we had 77,000 applications of interest for the armed forces. I think that is a good step forward.

The Ministry of Defence has a target of spending 25% of its budget with small and medium-sized enterprises by 2022. What progress has been made towards achieving that target?

My hon. Friend raises an important issue. It is not just the big companies—aerospace and defence companies—we must look to support, but the SMEs, which are in every one of our constituencies. I am assured by the Under-Secretary of State for Defence, my hon. Friend the Member for Pudsey (Stuart Andrew), the Minister with responsibility for procurement, that that is exactly what is happening.

It was good to see members of the armed forces and the Secretary of State herself at the Pride event in London at the weekend.

Last year, a departmental assessment of the privatisation of the fire and rescue service at the Ministry of Defence gave Capita the highest possible risk rate. Two months ago, following a court challenge and an £80,000 payment to Serco, the lead competitor, Capita was finally given a contract worth millions to deliver services all over the world, despite the huge financial risk. Why was £80,000 paid to Serco to allow that to go ahead? Does that not show up the whole problem with privatisation at the Ministry of Defence?

I do not agree with the hon. Gentleman’s assessment; it is important that we provide value for money. The defence budget is under pressure, as are all other Departments. He is absolutely right to say that Capita was going to be given the contract. It is subject to a legal challenge and we have to wait to see that mature, but let us not forget that even on Labour’s watch we had the outsourcing of fire contracts to other organisations, not least in Cyprus as well as at other bases including Aldermaston. This is not new; it is something that we have to advance.

A recent report by the Public Accounts Committee found that less than half of personnel would recommend the housing maintenance service provided by the company, Amey. Amey’s performance is so bad that the MOD has introduced a compensation scheme for maintenance issues, but unbelievably, the Department pays even when Amey is at fault. Will the Minister outline why hard-working taxpayers are expected to foot the bill when the MOD’s contract has failed to deliver?

The issue is to do with the key performance indicators, as I think the hon. Gentleman will agree. According to the standards that we see, 97% meet the requirements. We find that those indicators are set too low, and the Secretary of State is very conscious of that and of the need to raise them. We are reconciling the defence real estate to make sure that we improve accommodation, but I will not hide away from the fact that this has been very difficult, and we owe our armed forces personnel much, much better.