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Staff Reductions

Volume 517: debated on Thursday 28 October 2010

I am announcing today that the Ministry of Defence is beginning formal consultation with the various representative trade unions of the Defence Support Group (DSG) on a proposed programme of staff reductions designed to maintain the organisation’s profitable trading position and the valuable support it provides to defence.

Despite major cost savings and efficiencies delivered by DSG since its formation on 1 April 2008, the business is faced with declining order books. It must therefore begin a major structural reform to realign its capacity and capability with defence customers’ reducing demand. Based on current workload plans, this will result in a reduction in staff levels by up to 600 by April 2013, around 17.5% of the DSG workforce. However, it is not envisaged that these reductions will result in site closures.

Implementation of the staff reductions must start as soon as possible to remove overcapacity and ensure the trading fund remains profitable and viable. The MOD does not expect the recent strategic defence and security review (SDSR) announcement to negate the need for staff reductions or the imperative for commencing consultation now. Should SDSR lead to a requirement for further staff reductions at DSG then this will be subject to a separate consultation process in due course.

Both MOD and DSG will do all that they can to minimise the effect to employees by delivering these staff reductions through voluntary means but naturally we cannot rule out potential release by compulsory means.

In parallel, the trade unions, MOD and DSG will work with other Government Departments and agencies to explore future job opportunities for DSG employees affected by these manpower reductions. Working closely with external training providers and agencies such as Jobcentre Plus and other advisory organisations, DSG will explore alternative training and job opportunities for any employees wanting to retrain for an alternative career.

In conclusion, I pay tribute to the outstanding service DSG personnel provide and the pivotal role they play in supporting the UK armed forces with the vital equipment they need on critical operations both at home and overseas.