The Goose that lays the golden egg given to Serco as they are awarded Defence Business Service Contract

The MOD has today signed over the running of Defence Business Services (DBS) to Serco without addressing any of the concerns of staff represented by the Public and Commercial Service Union (PCS).

PCS has asked:

• Why award a contract to the value of £36M to undertake work that senior civil servants are competent to undertake when the current DBS civil service management have met every target that has been set. 
• Serco can now dictate MoD business output while the associated business risk remains with MoD. What assurance and governance is within the contract that will ensure this does not undermine defence needs?
• What assurance and governance arrangements are within the contract to enable a commercial management team to manage public funds when they are not accountable to the public purse, only to the contract they have been awarded and their shareholders?
• The contract award details that TUPE legislation does not apply. Under Regulation 3, there will be a TUPE transfer if an identifiable business or part of a business changes hands, or a particular service is contracted out, given to a different contractor, or brought in-house. What assurance do you have that this is correct when it is clear that the MoD is transferring the management of DBS to a private company?
• What assurance is there that the contract does not breach fair commercial contract practices as it enables Serco to outsource transactional work to themselves (as this is not precluded from the contract)?
• As Serco will have direct access to Defence Bills management information what assurance and governance is within the contract to stop Serco using sensitive defence contract cost information to undermine their competitors or the public purse value for money benchmark process in future contract awards?
• The contract award offers to save £71M at a cost of £36M with no hard change initiatives detailed by Serco. As DBS has already got hard wired savings over the life of the contract what assurance is there in the contract that MoD and the public purse will gain any Value for Money benefits?
• Bringing in Serco as the commercial management of DBS whose professional civil servants have achieved hard wired value for money savings year on year has undermined morale to such a point that business continuity is a significant risk. What assurances were given by the MoD in relation to business continuity?

We have had no answers to date.

Serco must be over the moon; they have a been awarded a contract where the risk remains with the MOD, they will have access to the Ministry of Defences' commercial, contract and bill payment data plus be able to propose future outsourcing of defence business where they will be able to bid for that work from a insider position.

The Goose that lays the golden egg has been given to Serco where there is a direct conflict of interest with the management and governance of public funds.