So. Farewell then to the Metrix consortium and the crazily expensive plan to privatise defence training at a new academy in South Wales under a PFI contract which rose from £11bn to £14bn and was plagued by delays.

Defence secretary Liam Fox has admitted: “It is now clear that Metrix cannot deliver an affordable, commercially robust proposal within the prescribed period and it has therefore been necessary to terminate the [defence training] procurement and Metrix’s appointment as preferred bidder.”

If only Fox’s predecessors had paid more attention and heeded what the Eye has been saying for many years.  In 2006 Eye 1164 pointed out that “another crucial service is being privatised to take advantage of accounting tricks”.  And in June 2008 we exposed MoD documents already showing an “affordability gap”  and a host of internally acknowledged  reasons why the deal was a thoroughly bad idea.  But still the MoD ploughed on – simply to get the cost of the wretched academy off the government’s books under PFI’s accounting “magic”.

Right click on the image and choose view to read the full article.

In a ministerial announcement it was revealed that it had become necessary to terminate the DTR procurement and Metrix’s appointment as Preferred Bidder because an affordable solution was not forthcoming within the time frame required:

DTR PACKAGE 1 – Collapses.

Introduction

Among all the defence announcements, some of which seem to border upon the insane, is the welcome news that DTR has finally collapsed.

This programme has been limping along for some time, but today the final wheel fell off the wagon.

IPT communicates

Paula Payne from the IPT wrote to MODCSU today. In her letter she noted:

“…you will also be familiar with the challenges with which the project has had to contend:  the separation of Package 1 from Package 2, the withdrawal of Land Securities Trillium as a sponsor of Metrix and the impact of the financial crisis on the costs of funding the project have all been major issues.  They have manifested themselves in an ongoing battle to develop the complex commercial deal within the time required and to make the project affordable.  It has been clear from the outset that this project would only proceed if it was commercially viable, affordable and value for money and Metrix were appointed as Preferred Bidder for DTR in January 2007 subject to these latter two requirements.”

The Ministerial announcement was more forthright in its language:

“The Metrix consortium was appointed as Preferred Bidder in January 2007 subject to it developing an affordable and value for money contract proposal.  Given the significance of this project and the opportunity to provide a world-class training facility, the Ministry of Defence has worked tirelessly to deliver this project.  However, it is now clear that Metrix cannot deliver an affordable, commercially robust proposal within the prescribed period and it has therefore been necessary to terminate the DTR procurement and Metrix’s appointment as Preferred Bidder.”

Metrix heads for the door

Around the Establishments Metrix Liaison Officers are packing their bags and heading out. This is a serious blow to QinetiQ especially, given their dire financial position.

PCS success

Nevertheless, this is a victory for PCS’ strategy of constant engagement with the Department, campaigning and utilisation of information extracted through research and Freedom of Information requests.

The Private Eye carried a constant stream of stories about DTR, provided by PCS, that held the project up to ridicule and PCS worked with local MPs in affected areas, got tabled Parliamentary questions (over 200), lobbied for Early Day Motions, organised Parliamentary drop ins, on line petitions, a 24 hour vigil, supported the Defence Day of Action etc.

MoD has squandered millions of pounds on DTR that could have been spent upgrading training establishments. The privatisation of training was clearly ideologically driven.

What now

We have won a victory but not the war- that much is clear. The IPT will now look at “alternative procurement proposals”, but again the Ministerial announcement makes clear:

“Technical training, collocated on as few sites as possible, remains in our view the best solution for our Armed Forces.  Equally, St Athan was previously chosen as the best location on which to collocate that training for good reasons, and we still hope to base our future defence training solution there.  We will however now carry out some work before finalising the best way ahead; including to confirm both our training and estates requirement, and the best way to structure the solution that will meet them.”

What this means, in reality, is anybody’s guess. However, given the parlous state of MoD finances it is likely that those sites with good infrastructure will remain in situ. The likelihood of a DTC at St Athan looks increasingly untenable, although some HQ function for a virtual DTC is of course a possibility.

The MoD will also have to grapple with the contracts that are coming to an end at Arborfield, Bordon and within the VT Flagship contract with Navy training. These training contracts have been left to wither on the vine as the fell within the scope of DTR- similarly a huge question mark must now sit above the TESC contract to deliver garrison support at Arborfield and Bordon.

The issue of Early Training Transformation will also need close attention. Metrix were given a substantial sum to rationalise training courses. PCS challenged the use of ETT last year- given the uncertainty of the project even then. MoD advised the unions that this work would be utilised even if the project did not go ahead. PCS will be seeking information on just how much of this material is still relevant following the Ministerial announcement.

PCS will also be pressing the DTR IPT for answers on all the above issues at our meeting schedule for November.

Conclusion

Whilst this news is obviously welcome, members need to be aware that other proposals released today by MoD will undoubtedly indirectly have an impact upon training and Instructional Officers and those providing admin support.

Members need to stand together as Civil Servants to protect the services to the front line and to their communities and the public.

Paul Bemrose

Negotiations Officer

The news was covered extensively in Shropshire and Wales, the following links are an example of the reports:

• Shropshire Star, front page – 19th October 2010

• Shropshire Star, inside – 19th October 2010

• News Wales – St Athan £14bn defence academy is shelved (video)

• £13bn military academy to be scrapped (Radio clip)

• BBC Wales – Defence cut hits job prospects for Barry

The Guardian has also learned that a £14bn PFI project – one of the largest ever – to finance a military training academy in Wales is likely to be scrapped as part of the strategic defence review, to be published later this month. The new centre at a 1,000-acre site near Barry is intended to consolidate the three armed services’ existing training facilities around the country, able to cater for up to 3,000 students at any one time. The 30-year contract, awarded to defence firm Qinetiq and US firm Raytheon, covers staff, catering and maintenance.

But the cost has already increased from the original estimate of £12bn to a figure closer to £14bn, while the government has made clear its dislike of PFI-style contracts.

One senior defence source described its future as “pretty bleak” and its fate could also be sealed at the national security council meeting. Officials say the work by the consortium – already costing the MoD more than £80m – has not provided what is required. A spokesman for the consortium argued that it would be “illogical” to scrap the new centre because it would free up 1,200 sailors, soldiers and airmen involved in the military’s existing training programme.

A Government source has said the £14 billion private finance initiative project, awarded by the Labour administration, is unlikely to be given the green light by the present Conservative/Lib Dem coalition because of the huge costs.

It opens up the possibility of studies for a much lower cost replacement which could mean a reprieve for RAF Cosford and secure its future. Mr O’Harney said they believed the programme for the new facility at St Athan had been flawed since its inception.

He said the cost of the facility had soared from £11bn to £14bn in the space of three years.

The source said: “The logic for something on that site remains compelling. The model does not. It’s not impossible that something will go ahead – but it won’t be a gargantuan PFI.”

St Athan has been viewed as vulnerable as the coalition is keen to axe £20bn of defence contracts structured as PFIs – and the St Athan project is not yet under contract.

• The full article can be viewed here.

The Government has recently ended its £750m border security contract with a Raytheon-led consortium and said it had no confidence in the U.S. company.

£755m UK border contract scrapped

By Lorraine Turner

Friday, 23 July 2010

The Government ended its £750m border security contract with a consortium led by Raytheon yesterday, saying it had no confidence in the US company.

The contract was awarded by the previous Labour administration to a group of companies [also] including Serco, BAE, Qinetiq and Accenture in November 2007. They were asked to develop and implement a scheme to collect and check passenger details against police, security and immigration watch lists.

The Home Office said Raytheon, which provided technology to carry out security checks on travellers, had been in breach of the e-Borders contract since July 2009. Although the cancellation comes amid austerity measures, the Government, which has spent £188m on the contract to date, said it would seek alternative providers for the project.

This is interesting news in light of the fact that The Minister for the Armed Forces, Nick Harvey, when speaking on the decision to move Defence Training to St Athan, stated in Parliament recently that to change course now “would undo a great deal of investment that has already been made and add considerably to the final cost.” The preferred bidder for defence training is the QinetiQ/Sodexo-led Metrix consortium of which Raytheon is a member.

A further article on the scrapping of the borders contract can be found here.