Earlier this year I commissioned a status review of the United Kingdom Hydrographic Office in Taunton to establish the optimum future structural and ownership arrangements for the UKHO.
This review has now been completed. I can announce I have accepted the principal review recommendation that, given the current regulatory and market conditions, the UKHO should retain its current trading fund status, and ensure the potential benefits of this status are maximised as far as possible. The review considered carefully options to transfer some or all of UKHO functions to a Government-owned company and a range of structural and ownership arrangements which might assist UKHO to succeed in the challenges it faces. As the report contains commercially sensitive information, a copy of the executive summary only has been placed in the Library of the House.
As part of normal MOD business, this decision will be subject to regular review in the light of business needs, or as a result of any significant change in the regulatory or market environment.
We previously announced that UKHO will remain based in Taunton. As part of our commitment to UKHO’s future we will be investing in a new building and substantially improved working conditions for UKHO’s staff. We are currently looking at detailed options and expect to make a final decision early in the new year.
The status review and further studies have been carried out to ensure the UKHO has a sustainable future, focused on its core business and capabilities, providing best value for money for the taxpayer. In addition to meeting the core defence hydrographic needs of the Royal Navy and support digital navigation, the UKHO continues to operate in a competitive international commercial environment. Continuous efficiency gains and effective cost control are vital to remain competitive. In particular, UKHO management has identified those skills and capabilities they believe will be required to succeed in the developing and challenging market for digital navigation products.
As a result of this work, and subject to further detailed planning, I have approved the start of full consultation with the UKHO trade unions on the optimum future size and shape of the organisation. Study analysis indicates a total net headcount reduction in the UKHO of between 250 and 300 permanent posts over the next five years may be required in order to focus resources on the core business. It is hoped that this net reduction can be achieved through natural wastage and the full use of wider MOD restructuring arrangements. As far as possible we will avoid compulsory redundancies.
UKHO senior management are committed to taking forward the consultation process quickly in order to provide all staff with clarity regarding their futures. Wherever possible the new posts required to support future business needs will be filled by reskilling and retraining of existing staff.
With these proposed changes, I believe the UKHO’s future will be secure, and it will remain a significant employer in the South West, with over 800 staff. I am clear that, these are the right decisions we need to take now if we are to deliver a viable and sustainable future for the UKHO and its staff, and value for money for the UK taxpayer.