We call on the Secretary of State for Defence to listen to the National Audit Office and take stock of past privatisation mistakes by halting plans to privatise any part of Defence Business Services (DBS).
Why is this important?
Veterans’ welfare, armed forces pensions and the handling of casualty notifications are all at risk as the Ministry of Defence (MoD) plans to privatise its shared services organisation – Defence Business Services (DBS).
DBS employs over 2,200 people and is responsible for MoD armed forces and civilian pay, pensions and HR, delivering welfare to 900,000 veterans and their dependents, handling casualty notifications and administration 24 hours a day, UK wide security vetting and making payments to all defence suppliers.
MoD’s track record with private companies in DBS generates some big concerns. In 2012, Serco and Accenture were brought in as management partners where they were paid for running the organisation but additionally received 40p for every pound saved via ‘efficiency gains’.
This led to reckless cuts, asset stripping and manipulating of performance measures in a profit grabbing frenzy. In many areas of DBS, jobs were cut to generate a saving (and profit for Serco and Accenture) but were then reinstated at a later date.
When the Serco-Accenture contract was brought to an end this year, it was hoped that common sense had prevailed. Yet now the MoD want to go one step further by fully privatising the running of DBS.
The MoD argue that this will bring them savings but history tells another story. Instead, it will result in cuts to services, putting those who rely on DBS, like veterans, MoD staff and army personnel at risk. It could also open the door to offshoring of work and defence sensitive data as companies seek to maximise profits.
The alarm bells don’t stop there. A recent National Audit Office report has revealed that privatisations of other shared services across Whitehall has failed to deliver value for money to taxpayers, with long delays and rising costs.
DBS is one of the largest and most complex shared services organisations in Europe, carrying out sensitive and critical services to the MoD, its staff, the armed forces and veterans. The MoD should safeguard this by keeping DBS public.