§ Mr. Duncan
To ask the Secretary of State for Defence if he can report on the outcome of the consultation process for the Army Base Repair Organisation, Old Dalby.
§ Mr. Freeman
Following my 27 October 1994 announcement,Official Report, column 732, of plans to withdraw MOD activity from the Army Base Repair Organisation workshop at Old Dalby and to change the agency's market-testing programme to include tests for base and district workshops only after such reorganisation, I have received a wide range of comments from a number of MPs and local authorities. In addition, the trade union representatives of staff at the workshop have submitted detailed comments on the plans and 567W provided counter-proposals with a view to continuing operations at the site.
The formal consultation period ended on 23 December. Since then, a detailed evaluation of the comments received and, in particular, the proposals from the workshop has been undertaken. In parallel, I have taken the opportunity to visit the workshop to understand better the local impact. I have also had discussions with representatives from the Donnington workshop, which would import the bulk of the work from Old Dalby.
As a result of the consultation period, changes have been made to assumptions used in the analysis of various options for the future of Old Dalby.
Having now considered all of the proposals, counter-proposals and their implications, I am convinced that the only viable option is to proceed with the withdrawal of MOD activity from the workshop and to implement the restructured market-testing programme which I announced on 27 October. None of the suggestions or counter-proposals resulting from the consultation process can deliver the necessary restructuring or offer of an equivalent level of savings to the taxpayer while preserving service to the Army. Any attempt to maintain MOD activity at the Old Dalby workshop would result in the Army continuing to have excess capacity beyond all foreseeable requirements. The resultant inefficiencies would inevitably be reflected in the costs passed on to the Army and ultimately to the taxpayer. Excess capacity would also disadvantage the agency teams in their attempts to prepare for the forthcoming market-testing process and could undermine their chances of making most cost-effective use of the facilities.
The final version of the analysis undertaken changed the net benefit of withdrawal from Old Dalby rather than Donnington, but did not change the preference for withdrawing from the former. I am accordingly instructing the agency to proceed with planning for the withdrawal of MOD work from the Old Dalby workshop. I must emphasise, however, that I recognise the skill and success of the Old Dalby work force and their interest in continuing to undertake ABRO work. Prior to the implementation of the planned move of MOD work later this year, I have asked that, for each discrete package of work at the Old Dalby workshop, an evaluation be undertaken to ascertain whether these should be placed with the private sector, using either their own facilities or by taking over the workshop facilities at Old Dalby, or with other MOD units. Any decision to place work with such facilities must, however, show an improvement over the savings which would be achieved by placing such work at ABRO Donnington. No irrevocable action will be taken by ABRO until at least July 1995 which would prevent the successful placement of such packages of work elsewhere than Donnington.
Representations made have clearly identified the potential effects of these changes on the local community and economy. Given that my Department is no longer able to make effective use of the modern, high-technology facilities at the site, every effort will be made to encourage the private sector to put forward innovative proposals for alternative uses which can capitalise on the skills and expertise of the work force. My Department intends to work closely on this with the local authorities and other employers in the area. An early start will be made to obtain appropriate advice within and outside the 568W MOD to market the skills of the work force and the existing facilities for alternative private sector usage in parallel with the cost evaluation of the individual work packages referred to.