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Prospect members in the defence industry

DEFENCEEYE • Issue 3, December 2013



KATE MORAN, an operational analyst for the Defence Science and Technology Laboratory (Dstl) in Salisbury, Wiltshire, is a Prospect Pioneeer – one of the union members featured in a 2014 calendar celebrating the success of women in male-dominated industries. “I look at questions like what the Ministry of Defence will need in the future,” she says. “What I found hardest about this job was working in a military culture. I was quite shy and easily intimidated when I first started. But working in this environment has helped me and given me a different perspective. If I’m in a meeting with five military officers and they're not listening, I simply have to find a way to get through to them.” ■■ Order online at or contact

Lord Levene: Blaming civil servants for delivery failure in public is ‘utter nonsense’ funded, restructured version of the current organisation, staying within the public sector, known as ‘DE&S+’. A team led by Denver-based CH2MHill, and including Serco, decided it could not reach the commercial targets that the government required. The Materiel Acquisition Partners consortium – led by another US engineer, Bechtel – was the only party interested in running DE&S. Philip Hammond said the potential benefits of privatising DE&S in “one leap are now outweighed by the risks.” “The Treasury and the Cabinet Office need to take out their ear plugs and listen to what organisations across the civil service are saying: we can’t recruit and retain the specialists we need because of your inflexibility

on how people are employed and managed,” said Jary. Just days before the announce­ ment, Lord Levene, the former MoD permanent secretary who advises government on defence reform, said reform was held back by “civil service policies that inhibit the ability to pay the market rate for challenging jobs, and to ‘hire and fire’ flexibly.” See In an interview with Civil Service World, Lord Levene said a few top experts should be recruited to help train DE&S staff to “negotiate with the most senior people in the largest companies in the country and around the world” – a capability that currently “just does not exist within the civil service”. Levene also told CSW that repeatedly blaming civil servants for delivery failure in public is “utter nonsense”. He challenged claims by Francis Maude, minister of the Cabinet Office, that there is a “bias to inertia” in the civil service. ■■ The House of Commons defence select committee took evidence from secretary of state Philip Hammond, and Bernard Gray, chief of defence materiel, on 12 December. Read or listen to the evidence at defence_committee. ■■ TIMELINE: page 8

Why we must unite on skills 2014 WILL be a key year for developing and supporting skills across the defence sector, says Prospect deputy general secretary Garry Graham


Prospect • DefenceEye – December 2013

THE DEFENCE Equipment and Support organisation will not be privatised, the defence secretary announced on 10 December. Prospect, which said all along that the idea was half-baked, welcomed the announcement which it said was inevitable. Instead, DE&S will become a “bespoke central government trading entity”, operating at arm’s length from the MoD with new “significant freedoms and flexibilities, agreed with the Treasury and Cabinet Office, around how it recruits, rewards, retains and manages staff.” Prospect national secretary Steve Jary said: “It is truly astonishing that the Treasury would have preferred to contract out control of the UK’s defence procurement rather than give DE&S the flexibility to pay its highlyskilled staff properly and hire and retain people with the right skills and experience.” The defence equipment programme accounts for about 45 per cent of the total defence budget. DE&S employs approximately 16,000 people – one third of them military officers – and is based in Abbey Wood, Bristol. The government considered two options for DE&S: a private sector led Government Owned, Contractor Operated ‘GOCO’ model; and a fully


Government pulls plug on procurement privatisation



THE OFFICE of Fair Trading has secured agreement with the industry and the Pensions Regulator on steps to tackle problems in the defined contribution workplace pensions market. These include: ●● Dealing with old and/or highcharging contract and bundled-trust schemes – The Association of British Insurers and its members have agreed to an immediate audit of these schemes, aimed at ensuring savers are getting value for money. This will be overseen by an independent project board. ●● Dealing with issues with small, trust-based schemes – The Pensions Regulator has agreed to take rapid action to assess which smaller trustbased schemes are not delivering value for money. The Department for Work and Pensions has agreed to consider whether the regulator needs new enforcement powers to tackle the problem.

●● Improving governance: To address the OFT’s concerns about lack of independent scrutiny of contractbased schemes, the ABI has agreed that its members will establish independent governance committees.


Regulators agree steps to improve DC pensions These should recommend changes to providers and escalate issues to regulators where they see risks of poor outcomes for savers. The OFT recommended that the government should establish a minimum governance standard to apply to all pension schemes.

●● Improving the quality of information available on costs and charges – The OFT recommends that the DWP should consult on improving the transparency and comparability of information about the charges and quality of schemes to make employers’ initial choice of scheme easier. This should include whether providers could disclose a single annual management charge and investment transaction costs. ●● Preventing future risks of detriment: The OFT recommends that the DWP should consult on preventing schemes being used for auto-enrolment that contain in-built adviser commissions or that penalise members with higher charges when they stop contributing into their pensions. ■■ Download a comprehensive briefing on the OFT study from http://

■■ You’re never too young to start thinking about your pension. Apprentices at the launch of a shipbuilding campaign at the BVT shipyard in Govan, Scotland, on the Clyde in 2009


■■ Prospect response to Department for Work and Pensions consultation on charges: ■■ Prospect response to consultation on increases to PCSPS contribution rates from April 2014: ■■ Petition supporting a cap on pension charges track-our-progress/ ■■ Prospect briefing note on the implications of Scottish Independence on pensions – please email for a copy. ■■ Introduction to pension tax relief system as at December 2012, Prospect briefing note: ■■ Prospect submission on the Treasury’s New Fair Deal guidance:

New Fair Deal widens scope of protection

Prospect • DefenceEye – December 2013

A REVISED policy on protecting members’ pensions when their public sector organisations are privatised came into effect from October. ‘New Fair Deal’ allows members whose jobs are privatised to retain membership of the civil service or other public sector pension schemes. The revised policy can also apply to workers whose jobs were privatised in the past. Prospect pensions officer Neil Walsh said: “The protection for members’ pensions on privatisation, previously delivered by a policy known as ‘Fair Deal’, was under threat when the coalition government decided to consult on its future. “However, as a result of the pensions day of action in November 2011, not only is protection for pensions on privatisation retained, it has actually been enhanced. Members will be able to continue

in the civil service pension scheme after privatisation for the first time.” The Treasury has produced guidance on how the protection will work in practice. Broadly speaking, members will remain eligible for membership of the civil service pension scheme as long as they are mainly engaged on the contract that was privatised. There is discretion to retain access to the scheme if members are transferred to another contract that also came from the public sector. Walsh added: “Every privatisation will involve work from Prospect to ensure that ‘New Fair Deal’ is applied fairly in members’ interests. Prospect is working on guidance for negotiators and reps who will deal with these situations to ensure they are equipped to represent members.” ‘New Fair Deal’ can also have implications for workers already

in the private sector who were privatised in the past. Currently they often have access to a broadly comparable pension scheme. Under ‘New Fair Deal’ many will be brought back into the civil service pension scheme when the contract they work on is retendered. However there could be uncertain consequences for some, for example where broadly comparable pension schemes have diverged from the public sector schemes that members were originally part of. Walsh said: “While restored access to a public service pension scheme will benefit many, Prospect will monitor the implications rigorously to ensure that members are not inadvertently disadvantaged as a result.” ■■ publications/fair-deal-guidance

QINETIQ BRIEFING PROSPECT PENSIONS officer Neil Walsh has produced a briefing for members in QinetiQ. It answers questions about the closure of the defined benefit section of the QinetiQ pension scheme. Download the briefing from http://library. prospect. id/2013/01739




PROSPECT GENERAL SECRETARY Mike Clancy, national secretary Alan Leighton and negotiator Bob King visited the Royal Navy Submarine Museum in Gosport, Hampshire in November. They are pictured in front of HMS Alliance, the only surviving British World War II era submarine. Volunteers from the local community are involved in saving the submarine.

Unions protect against recession

excuse to hold back pay. “This kind of behaviour deepened the recession and pushed working people into poverty unnecessarily. A swift return to real pay growth is now urgently needed if the emerging signs of growth are to be shared by everyone,” she added. “It’s reassuring to learn that unions have held their own and were able to help working people get through the worst economic storm in living memory.” The challenge in coming months would be to take unions into new workplaces and parts of the economy where membership is rare. “We need to make life fairer at work and ensure that top earners do not leave ordinary families behind. We can only do that if we have a strong and vibrant union movement which gives a voice to the interests of working people.” ■■ See: campaignplan ■■ The Health and Safety Executive recognises that “workplaces where workers are involved in taking decisions about health and safety are safer and healthier workplaces”. Read about the union effect on health and safety at


FROM REFRESHING your noticeboard to promoting the union’s career development work, Prospect has a range of resources to help you with workplace campaigns. Have a look at the website ( and order hard copies from You can also contact your local organiser for help and support – find their details at

Prospect • DefenceEye – December 2013

EMPLOYEES IN workplaces that recognise unions are ‘significantly less likely’ to have been adversely effected by the recession, a survey has revealed. The Workplace Employment Relations Survey – conducted for government by the National Institute of Economic and Social Research – also found that one in five companies not adversely affected by the recession still froze or cut pay. Redundancies and pay freezes in the public sector have led to perceptions of job security plummeting, along with trust in managers, the survey says. But the good news is that unions are generally holding their own across the economy, with the percentage of members and the extent of their coverage virtually unchanged since 2004. Unions have also improved their membership in larger companies – from 44 per cent of employees in 2004 to 50 per cent. This is seen as significant because larger firms account for more than half of all employees in the private sector TUC general secretary Frances O’Grady said the survey had revealed the degree to which opportunistic employers used the recession as an



Prospect demands joint drive for job guarantees BAE Systems is seeking volunteers for redundancy at its Portsmouth shipbuilding facility BAE SYSTEMS, trade unions and politicians should work towards guaranteeing a job in Portsmouth for anyone who wishes to stay within the business, Prospect has told the company. The union was speaking after BAE Systems announced the loss of more than 900 jobs with the closure of its shipbuilding facility in Portsmouth. The company said in November that no compulsory redundancy notices will be issued before the end of January 2014. This is to allow staff from across its businesses in Portsmouth to apply for voluntary redundancy.

Prospect has welcomed this voluntary window and the opening up of the scheme beyond the naval ships business. All those at risk of redundancy will receive a personalised quote outlining their entitlements. Anyone who is

‘Our members deserve long-term job security. This is the least they should expect, given their service to the UK shipbuilding industry over many years’ not at risk, and working in naval ships or maritime services, can request a redundancy quote. The BAE scheme – three weeks’ pay for each year worked, up to a maximum of 78 weeks – will apply to anyone who volunteers. The unions expressed concern that failing to offer contractual terms for

former civil servant may inhibit some people from volunteering, freeing up fewer posts in the services business and failing to mitigate job losses in naval ships. Prospect will continue to assert that contractual terms should apply during the voluntary redundancy window. Negotiator John Ferrett said: “The unions are open to working with any business prepared to take on work within the naval base or to set up a new operation on the shipbuilding footprint. “Ultimately we want, and our members deserve, long-term job security. Prospect wants jobs that fully use their skills rather than piecemeal, insecure and low-skilled employment. “This is the least they should expect, given their service to the UK shipbuilding industry over many years.”

WHAT IS PROSPECT DOING? PROSPECT WILL: ●● continue to consult BAE Systems to ensure compulsory redundancies are avoided and alternative roles found for members ●● press for clarification on pensions, not least the impact for members who are part of the VT ring-fenced section of SIPS ●● use the consultation period to ensure that BAE Systems

keeps members fully informed of any alternative roles within the business and that everyone is given a fair opportunity to apply for these jobs ●● seek to protect current terms and conditions for members who move to another part of the business ●● continue to make the case for maintaining a shipbuilding capability in Portsmouth.

Give Portsmouth fair share of shipbuilding Prospect • DefenceEye – December 2013

SHIPBUILDING IN the UK can be sustained at three yards, Prospect told defence secretary Philip Hammond in November. The union wrote to the Hammond after BAE Systems announced its intention to close the shipbuilding facility in Portsmouth with the loss of more than 900 jobs. Prospect negotiator John Ferrett said: “We believe Portsmouth should be given a fair share of shipbuilding work.

“Retaining work on the aircraft carriers, instead of transferring it to the Clyde, will help to sustain Portsmouth in the short term. “Furthermore, by awarding one of the three proposed off-shore patrol vessels to Portsmouth, the dockyard can maintain a minimum level of capability before the work on the carriers arrives. “By adopting this plan, the government will ensure that a naval shipbuilding capability is maintained

in England and that skilled workers are retained in Portsmouth.” Ferrett said the decision to close Portsmouth a year ahead of the Scottish referendum was “not only illogical, but dangerous in terms of the UK losing sovereign shipbuilding capability.” Prospect asked to meet the minister to discuss “how we can avoid what is likely to be an economic catastrophe for Portsmouth if no action is taken.”

■■ Prospect negotiator Joh


hn Ferret (with microphone) at a rally in Portsmouth in November



Help for professional engineers seeking jobs THE TALENT Retention Solution puts skilled people looking for work and companies searching for new employees in contact with each other. It is a not-for-profit, UK-wide platform to retain skills in the advanced manufacturing and engineering sector, including

aerospace, automotive, civil engineering, defence, energy, marine, nuclear, power generation and renewable industries. Once your details are on the TRS system you will have access to thousands of jobs. At this stage, several hundred employers can view your profile – names are anonymised unless you attach a CV. Employers get to know more about you only when you apply for a job or they express an interest in you and you decide to respond. It takes just a few minutes to register at ■■ More background is available on the Prospect website: trsprospect


Moving on – don’t forget, you don’t have to leave Prospect if you are changing jobs or looking for work. Download our moving on leaflet from http:// id/2010/00847

Prospect • DefenceEye – December 2013

Prospect’s Members’ guide to redundancy – download the guide from http:// id/2010/01156.



Cuts suspended with a sting MAJOR EQUIPMENT PROJECTS


Cost in £ million

Future Strategic Tanker Aircraft (Voyager)


Astute Class Submarine


Typhoon and Typhoon Future Capability Programme


A – B – C – D – E – F – G – H – I – J –

Type 45 Destroyer

3,268 I








Joint Combat Aircraft (Lightning II) Lynx Wildcat Specialist Vehicles Warrior Capability Sustainment Programme Beyond Visual Range Air-To-Air Missile (METEOR) Chinook New Buy and Project Julius Merlin Capability Sustainment Programme Complex Weapons (Spear Cap 2, Block 1, and FLAADS) Airseeker  Falcon



£2,200 m £1,663 m £1,394 m £1,319 m £1,122 m £1,121 m £791 m £783 m £634 m £349 m

Why we must unite around skills Prospect • DefenceEye – December 2013

2014 will be a key year for developing and supporting skills across the defence sector, says Prospect deputy general secretary Garry Graham

A HEALTHY and thriving defence industry is important for national security and makes a fundamental contribution to the success of the UK economy. Developing and supporting skills is going to become increasingly important, as is attracting high-quality entrants to the industry. The practical reality is that


there is going to be fierce competition for engineering, scientific and specialist skills from other parts of the economy. Some of this competition will come from the energy generation and supply industry as well as nuclear. While these industries face similar challenges, they are more advanced in identifying their

skills needs and developing industry-wide solutions. The defence sector could learn from industries where employers are working cooperatively – identifying gaps, agreeing common standards and developing training solutions. It has been interesting that companies who compete with each other in the commercial


Queen Elizabeth Class Aircraft Carrier


MANAGEMENT AT Serco Marine has climbed down on proposals to reduce the workforce at Portsmouth, after Prospect took legal advice. The employer said it would suspend the proposals from current negotiations with unions “until 2016 or when the Queen Elizabeth Class aircraft carriers enter service in Portsmouth, whichever date is sooner”. Prospect negotiator Richard Tabbner said: “Normally this would be good news for our affected engineer and other grades, but this is only a temporary stay of execution.” The most worrying development was that the employer had intended to bypass collective bargaining by making affected members of staff sign a new contract of employment. This would have allowed the employer to implement their de-manning proposals. Serco Marine told workers who refused to sign a new contract of employment that they would “implement dismissal and reengagement, giving appropriate notice up to a maximum of 13 weeks”. Prospect wrote to the employer warning that if it continued on this course of action, the union would ballot all members nationally on industrial action. The letter added that Prospect rejected the proposals to reduce the workforce and also reserved the right to ballot if the job cuts were implemented in the future. “Changing contracts of

employment without agreement is totally unacceptable to Prospect and is not in our agreed procedures with the company,” said Tabbner. “This is a fundamental issue for our members and one that we should be prepared to defend collectively and by any means necessary.” arena are recognising the need to work together on skills and the benefits this can provide. I have detected a desire among some private sector employers and the Ministry of Defence to think differently about skills and an appetite for more collaborative working. Discussions are at an early stage – but the will is there for a more strategic approach. Prospect can make a valuable contribution to developing the skills agenda and encouraging maximum participation.


£10,000 boost for MOD nuclear staff THE TREASURY has approved a Ministry of Defence request to increase the allowances paid to suitably qualified nuclear staff. MOD said this was “a significant development and a very welcome step to addressing the skills vulnerabilities in the defence nuclear community”. As part of the 2013 pay deal, MOD ringfenced 0.5 per cent of the non-consolidated pay bill to address recruitment and retention difficulties. Under the old system, nuclear suitably qualified and experienced personnel (NSQEP) civilian staff in MOD who were assessed to have level 1 (awareness), level 2 (practitioner) or level 3 (expert) competence were eligible for an allowance of £2,000 a year. Under the new recruitment and retention allowance, MOD civilian NSQEP assessed to have level 2 or 3 competence and fill a post with those



requirements will be eligible for an allowance of £12,000 a year. Those assessed at level 1 competence, who are filling a post requiring that, will be eligible for an allowance of £4,000 a year. Both allowances are pensionable. However the onus is on individuals to apply for it. Prospect told MOD that it should be for management to identify those who are eligible. National secretary Steve Jary said: “We have been working to enhance the sustainability of the MOD’s cadre of nuclear specialists for three years now and, while it has taken far too long, we welcome the MOD’s proposal to recognise that its pay rates are uncompetitive. “Prospect’s MOD group council considered the MOD’s offer in early December and we will be responding to ensure the payments are implemented as soon as possible.”

A PROSPECT survey of pay increases for QinetiQ staff highlighted significant differences in how awards were distributed across divisions of the company, particularly in three larger divisions – air, maritime and weapons. QinetiQ refused to reveal the distribution of pay awards, even to the ‘employee engagement group’. Staff have also been told that: “QinetiQ does not expect open discussion of salary increases.” Prospect national secretary David Luxton said: “This culture of secrecy is not conducive to team working and openness and can be corrosive in an organisation where cooperation is required across teams and disciplines. “The consequences of union derecognition are becoming ever more apparent as the company seeks to draw a veil of secrecy over pay, with no scope for negotiation or challenge.” The Equality Act 2010 says that employers cannot prevent their employees from making a ‘relevant pay disclosure’ to anyone, or prevent them from seeking such a disclosure from a colleague for the purposes of finding out whether there is unlawful pay discrimination. See Prospect is working hard to prepare the ground to restore union recognition and give QinetiQ employees an independent voice at work. You can send messages of support to


Why the civil service needs an independent pay review The Prospect Pledge campaign is asking MPs, members of the Scottish Parliament and Welsh Assembly members to back an independent review of specialist pay in the civil service.

■■ Alison Seabeck, Labour MP for Plymouth Moor View, at the launch of Prospect’s Pledge campaign at the House of Commons in November

address recruitment and retention problems ●● break down obstacles associated with fragmented pay systems which inhibit the movement of specialists across the service ●● help build genuine professional communities as a route to enhance knowledge and skills across the service ●● make the civil service an enduring employer of choice for specialists. ■■ You can read Mr Hague’s reply at uk/2013/01673. Find out more about the pledge at

Acquisition, infrastructure and corporate services: In each case a central problem has been civil service policies that inhibit the ability to pay the market rate for challenging jobs, and to ‘hire and fire’ flexibly. In my view, the apparent rigidity of these policies is a major barrier to delivering value-for-money. Lord Levene, Defence Reform, Second Annual Review

Prospect • DefenceEye – December 2013

PROSPECT SPELT out the benefits of such a review in a letter to the director of civil service workforce reform, William Hague. The union said an independent review could include opportunities to: ●● decouple specialists’ pay from short-term political constraints ●● consider objective evidence of pay rates for specialists across the economy ●● align specialist pay to the challenges the service will face in the future ●● build specialists’ confidence in their pay arrangements – both pay rates and progression systems – to start to repair damaged morale and




Timeline of a U-turn ■■ Defence Reform Bill receives first reading in the Commons

4 OCTOBER ■■ Royal United Services Institute (RUSI) comes out against the GOCO (having been sceptically neutral)

19 NOVEMBER ■■ It emerges that one of the two consortia has withdrawn




Part 1 of the bill is entirely to enable the establishment of the government-owned contractor operated (GOCO) model at Defence Equipment and Support (DE&S).

■■ Philip Hammond, secretary of state for defence


What the Government must do in Defence Procurement: The Inherently Governmental Function and the GOCO Proposal for Defence Equipment and Support, by John Louth and Trevor Taylor, suggests that most aspects of defence procurement and contracting for equipment and support are fundamental government responsibilities that should not be passed to others.


The group – led by Denverbased CH2M Hill with Serco and WS Atkins – failed to deliver its second phase bid/proposal by the deadline of Friday 15 November. Hammond tells Parliament in a written statement: “MOD has received a bid from one of the consortia but the second has decided to withdraw from the competition.


21 NOVEMBER ■■ Lords first reading. Former defence minister Lord Lee of Trafford says that the plans to privatise DE&S are “dead in the water”

■■ Commons second reading

13 NOV (published 4 December) ■■ Defence Reform – Second Annual Review (Lord Levene’s annual report).

Prospect • DefenceEye – December 2013




■■ Financial Times reports that the MOD has decided to shelve the GOCO option

■■ Secretary of state announces that the government will not proceed with the GOCO

■■ Commons defence committee special session on Materiel Strategy with Philip Hammond and Bernard Gray

Published by Prospect, New Prospect House, 8 Leake Street, London SE1 7NN DefenceEye editor: Marie McGrath E T 020 7902 6615


■■ Scrutiny committee – 14 sittings



■■ Unions write to defence secretary Philip Hammond to protest about the Ministry of Defence’s refusal to consult on the GOCO plan – allegedly on his instructions

■■ Second phase of bidding process due to end

“This is regrettable and the reduction in competitive tension will make it more challenging for the department to conclude an acceptable deal with the remaining bidder, notwithstanding the competition from the DE&S-Plus bid.” A decision had to be made on “whether it is in the public interest to proceed with only a single commercial bidder and an internal option.”

■■ Levene – greatest possible pay freedom

Printed by: College Hill Press



Levene says: “… a central problem has been civil service policies that inhibit the ability to pay the market rate for challenging jobs, and to ‘hire and fire’ flexibly. In my view, the apparent rigidity of these policies is a major barrier to delivering value for money… “In the field of acquisition, a longrunning Materiel Strategy has been examining options for the future of DE&S as either a governmentowned company or an ‘enhanced’ version of the existing business model (known as ‘DE&S plus’). “It needs to be brought quickly to a

20 NOVEMBER ■■ Commons third reading. Procurement minister Philip Dunne describes the withdrawal of one of the two consortia as “regrettable”

conclusion to end the current uncertainty and the very considerable demands it is placing on senior management time and effort across defence. In my opinion, the quickest and most straightforward solution would seem to be via ‘DE&S plus’, and this needs to be developed to the very highest standards as a realistic option. “But it is crucial that it also embraces the greatest possible employment and pay freedoms. I understand that a proposal to this effect is currently with the Treasury, and this has my strong support.”

DefenceEye, December 2013  

Prospect members in the defence industry