HC Deb 28 February 1996 vol 272 cc533-4W
Mr. Luff

To ask the Secretary of State for Defence if the market testing of the Marine Services Organisation has been completed; and if he will make a statement. [18425]

Mr. Soames

Final proposals for the management of marine services support to the Department were received on 18 December 1995 from an in-house bid team drawn from the Royal Maritime Auxiliary Service and from two private sector interests; a Denholm-SERCO consortium and the Ocean Group. These bids were evaluated accordingly to a pre-defined and publicised methodology.

Based on the results of this evaluation, it is intended to award the management of the moorings and buoys task and the naval armaments freighting task to the in-house bid team, the RMAS. The operation of the ports task— under which services are provided to the three main naval bases—will be awarded under a five-year contract to Denholm-SERCO. This latter award followed the elimination of the in-house team for reasons of non-compliance with the management requirements of the task. RMAS personnel currently employed on ports activities will have the option of transferring to Denholm-SERCO under the terms of the Transfer of Undertakings (Protection of Employment) Regulations 1981. Existing RMAS vessels required by Denholm-SERCO will be leased to the company under commercial charter terms. The vesting date for the new management arrangements is currently scheduled for 8 July 1996.

All the proposals received envisaged a significant reduction in the number of vessels and posts required to undertake the tasks. The selected bids will entail a total reduction of some 500 posts—approximately 45 per cent. of the current work force—as well as some 35 per cent. fewer vessels. Consultation with the TU side on the TUPE implications of this decision and on any redundancy arrangements necessary will take place in the normal way.

The MOD will benefit from the efficiencies which the market test will introduce into all the current marine service activities. It is envisaged that the Department will save some £105 million over 10 years as a result of the measures announced today.

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