Naval Training: Partnership Arrangement (Hansard, 9 February 1998)

§ The Minister of State, Ministry of Defence (Lord Gilbert)

Under a Competing for Quality and Public/Private Partnering initiative, the Naval Recruiting and Training Agency, NRTA, entered into a 15-year contract with Flagship Training Limited in July 1996. Flagship is a public limited company set up specially for the provision of training, administrative, and support activities, income generation and public/private partnership initiatives in a partnering arrangement with the NRTA. Flagship's equity is held by: Vosper Thornycroft, GEC Marconi and Johnson Controls Limited.

Under this pathfinder project, Flagship will market NRTA's irreducible spare training capacity and provide support services in return for fixed maximum charges. The NRTA has wholeheartedly embraced partnering. Certain support services, mainly the already contractorised catering and cleaning, have already been transferred, to NRTA's considerable advantage.

We are pleased announce that, following detailed negotiation between the agency and Flagship, agreement has been reached over the transfer to Flagship of the first and major phase of support service activities. This agreement centres on the provision of activities in the General, Administration and Training Support areas; 434 Civil Service posts and 550 uniformed posts at present deliver these activities. The net result of transferring the posts to Flagship is expected to be the creation of approaching 300 new civilian jobs and release of much needed uniformed personnel to fill gaps elsewhere in the Navy. A conservative assessment of the 136WA net cash savings to the NRTA is £29 million over 13 years from this first phase of transfer, with downstream savings of a similar amount expected from later phases.

Under income generation, approximately £20 million-worth of contracts have already been secured by Flagship, and prospective business worth about £300 million over 13 years has been identified, with the potential for creating up to a further 100 jobs in areas affected by previous reductions in the defence budget. The recently awarded Kuwait contract typifies the benefits that partnering offers the UK. The provision of naval training for a ship order secured by another nation is unprecedented, and indicates the value of combining Flagship's commercial expertise with naval training internationally recognised as second to none.

National and local trades unions have been informed regularly of the progress and we have recently approved, in principle, the signing of a formal contractual agreement involving the transfer of activities and employees from the NRTA to Flagship in a phased manner beginning on 5 May 1998, subject to the outcome of formal consultation with departmental trades unions. A copy of the consultative document has been placed in the Libraries of both Houses.