The Army entered into a partnering contract with Capita in March 2012 to manage the recruitment of regular and reserve soldiers. That is an Army-led initiative designed to free up military personnel from recruitment-related administrative tasks and to improve both the quantity and quality of Army recruits. It will play a key role as we transition the Army to the new Army 2020 structures.
I should make it clear to the House that the Army has not outsourced its recruitment; it remains in overall charge of recruitment and will continue to play a major role in attracting and mentoring recruits. Capita’s role is to manage the supporting processes by which a would-be recruit becomes an enlisted regular or a fully trained reservist.
As I have explained to the House previously, there have been initial difficulties with that recruiting process as we transition to the new recruiting arrangements with Capita. In particular, we have encountered difficulties with the IT systems supporting the application and enlistment process. The decision to use the legacy Atlas IT platform was deemed at the time to be the quickest and most cost-effective way of delivering the new recruitment programme. An option to revert to a Capita hosting solution was included in the contracts as a back-up solution.
I was made aware in the summer of last year that the Army was encountering problems with the integration of the Capita system into the Atlas platform. Since then we have put in place a number of workarounds and mitigation measures for the old IT platform to simplify the application process, and we have reintroduced military personnel to provide manual intervention to support the process.
Having visited the Army’s recruitment centre in Upavon on 30 October, it became clear to me that, despite the Army putting in place measures to mitigate those problems in the near term, further long-term action was needed to fix the situation. It was agreed in principle at that point that the Atlas system was not capable of timely delivery of the Capita-run programme and that we would need to take up the option of reverting to Capita building a new IT platform specifically to run its system, which will be ready early next year.
In the short term, we have already taken action to bring in a range of initiatives that will make it progressively easier and quicker for applicants, both regular and reserve, to enlist. As I informed the House in December, we have taken a number of actions, including: the introduction this month of a new front-end web application for Army recruitment; a simplified online application form; more streamlined medical clearance processes; greater mentoring of recruits by local reserve units through the application, enlistment and training process; and the reintroduction of reserve unit recruitment targets and the provision of recruitment resource to reserve unit commanding officers. With an improved Army recruitment website, streamlined medicals and an increase in the number of recruiting staff, recruits should see a much-improved experience by the end of this month.
As we move forward, we are looking at further ways of improving the management of the recruiting process in the intervening period before the introduction of the advanced IT system now being developed in partnership with Capita, which is expected to be deployed in February 2015. We have just launched a new recruitment drive for the Army, both regular and reserve, which will remind the House and the public that the Army is always recruiting and continues to offer exciting and rewarding careers in both the regular and reserve forces.
I thank the Secretary of State for that statement.
In these first few weeks of 2014 there is no danger of auld acquaintance being forgot with this Secretary of State and Government. It may be a new year, but is it not the same old story of complacency, inefficiency and a lack of transparency at the Ministry of Defence? Here we go again. The Secretary of State has been forced to come to the House of Commons to try to explain catastrophic failures costing millions of pounds of taxpayers’ money. This time it is an IT fiasco. It did not have to be like this.
Will the Secretary of State acknowledge that many in this House, myself included, warned that the Government were taking risks with Britain’s security by not fixing the reserve recruitment crisis before reducing numbers in the regular Army, and now we have the IT debacle? Does he accept that, just like the mess the Government made of privatising procurement, his entire armed forces reform programme is in danger of collapsing, too?
I asked the Defence Secretary specifically about the IT problems and Capita on the Floor of the House on 20 November 2013. Did he not say that everything was in hand? It is clear that the computer said no, but the Defence Secretary said, no problem.
Does the Defence Secretary remember telling the House on 4 November 2013 that there had merely been “teething problems” with the IT support for Army recruitment? If today’s reports are accurate, I would advise the Defence Secretary to seek dental advice elsewhere, because today we have learned that the problems are even worse than anyone thought and still have not been fixed.
Will the Defence Secretary tell the House which Minister signed off the deal and who has been responsible for monitoring it? Will he confirm that the project, costing £1.3 billion, is almost two years behind schedule and will not be fully operational until April 2015 at the earliest?
The Future Reserves 2020 report, placed in the Library on 18 December—I am sure it was only a coincidence that that was the day on which the House rose for the Christmas break—confirms that an improved IT system will be developed in partnership with Capita. Will the Secretary of State confirm how much that will cost? Is it the figure of nearly £50 million that has been reported in the papers today?
Will the Secretary of State also confirm that £15.5 million has been spent building the existing flawed computer system behind the project? Finally, is it correct that this continuing disaster is costing taxpayers £1 million every month?
On 10 April 2013, the then Minister of State, the right hon. Member for South Leicestershire (Mr Robathan), said that
“the Recruiting Partnering Project with Capita…will lead to a significant increase in recruiting performance.”—[Official Report, 10 April 2013; Vol. 560, c. 1134W.]
Is there any Member of this House, any member of our armed forces or, indeed, any member of the British public who still believes that?
The blame for the mess we are now in lies squarely with the Government. We cannot take risks with our armed forces and we cannot gamble with our nation’s safety and security. Does the Defence Secretary not need to get a grip and sort out this shambles?
That is precisely what I am doing. Perhaps the hon. Gentleman should remind himself that the initial gate business case for this project to outsource recruiting was approved in July 2008, so I hope we are not in dispute over the principle.
The hon. Gentleman mentioned an IT debacle. Yes, there are big problems with the IT and I have told the House on repeated occasions that we have IT challenges. There are problems with IT in Government. The hon. Gentleman speaks as if he was not a member of the Government who spent £13 billion on a health computer system that we had to write off and £400 million on a work and pensions computer system that had to be written off.
What we are doing now is gripping this problem and addressing it. That means, in the short term, workarounds and putting additional manpower into the system to provide additional support. Short-term solutions include the new front-end web application, which will go live over the next two weeks, to improve the experience of applicants accessing the platform.
The hon. Gentleman asked about the costs and I can give him some figures. The Capita solution will cost about £47.7 million to produce a full new IT platform. The alternative Atlas IT platform proposal would have cost about £43 million, so the additional cost of the Capita solution is about £4.5 million. He asked about the £15.5 million of sunk cost. Our initial estimate is that about £6.7 million of that represents costs that will have to be written off, but that will be subject to a proper audit process.
The hon. Gentleman asked about the additional cost—the running cost, as it were—of the interim solution that we have put in place. It comprises additional payments that have to be made and the cost of the additional manpower that has been delivered into the system. That is currently running at about £1 million per month. The solution that we have adopted and that we have now approved—going ahead with Capita platform and placing the integration risk back on Capita—is judged to be the quickest way of eliminating that ongoing expenditure and the best way of delivering a permanent solution for the benefit of the Army and the taxpayer.
I again suggest to the Secretary of State that plans to replace 20,000 regulars with 30,000 reservists will cost much more than the Government envisage, leading to false economies and a waste of taxpayers’ money. Given the tens of millions of pounds already wasted on this IT shambles, will he outline how much more it will cost to put it right? Does this not reinforce the point that the Government should now halt and stop the disbandment of regular units until we are sure that the plan to replace them with reservists is both cost-effective and feasible?
Let me deal with the cost point first. The overall programme, the Capita recruiting partnership project, has a budget of about £1.3 billion over a 10-year period. As I have just outlined, the additional cost of the IT platform is estimated to be £47.7 million.
Repeating the question that he has asked many times, my hon. Friend asked whether it is appropriate to replace 20,000 regular soldiers with 30,000 reservists. That is not what we are doing; we are changing the shape of the British Army and we are changing the role of reservists, whom we intend to fill specialist roles and provide resilience in the case of a prolonged future deployment. He makes a regular versus reserve point, but I should be clear with him that the recruiting platform is used for regular and reserve recruitment: it affects both regulars and reservists.
I declare a non-pecuniary interest as I chair Knowsley Skills academy, which has a 100% success rate in preparing candidates for entry into the military.
Does the Secretary of State accept that, regardless of who initiated the project, the problem is not the IT system, but the fact that the online recruitment model is flawed? It does not allow those doing the recruiting to identify at an early enough stage what candidates have to do to get up to the necessary standard to meet the requirements. He needs to go back to a professional soldier looking candidates in the eye and telling them what they need to do to get up to the required standard.
There is some truth in what the right hon. Gentleman says. One measure we have already put in place for reserves recruitment is reverting to an early face-to-face interview over a weekend session, where it is possible to deal with several processes in one hit, rather than stringing them out over a much longer period, which was how the system was originally set up.
It is clear to me that the original concept did not give a big enough role to front-line reservist units in managing the process of attracting recruits and then mentoring them through the pipeline to the point at which they join stage 1 training. We have now put that right, with recruitment budgets and recruiting targets allocated to reserve unit commanding officers, who will be held to account for delivering the recruiting targets. From the reserve units that I have visited and the COs to whom I have talked, I know that they are very glad to have back that role and responsibility.
In welcoming the recent package of changes and the work of the new and energetic major-general at the Army recruiting group, Major General Chris Tickell, may I suggest to my right hon. Friend that one of the key lessons to learn is the importance of developing distinct pathways towards the same ultimate aim? That applies not just to the recruiting group, but to other areas such as the military secretary’s department and the wider personnel function. That is what is done in every other country in the English-speaking world.
I pay tribute to my hon. Friend. It is largely as a result of his insistence on that point that I have become focused over the past four or five months on the importance of maintaining that distinct ethos, not just in the recruitment process, but elsewhere in the reserves. I agree with him entirely.
Millions wasted on planned “cats and traps” on aircraft carriers, millions wasted on a failed GoCo and millions wasted on a failed IT system—will the Secretary of State tell us how many members of the armed forces would still be in their jobs if it were not for the millions that have been wasted by this Government’s failures?
Unfortunately, the hon. Lady forgot the £1.6 billion that was wasted by deliberately delaying the aircraft carrier contract because of a shortage of £300 million of cash in-year. The restructuring of the British Army is a long-term strategic response to the fiscal environment and the post-Afghanistan challenges that we face. The size of the Army is right for the future.
No, I did not. It is Atlas that has failed to deliver an IT platform that Capita can utilise effectively.
To answer the question of the hon. Member for Colchester (Sir Bob Russell), just under 1,000 personnel are involved. Some of them have been surged into front-end recruiting and are acting as military recruiters on the ground, and others are providing manual support for administrative tasks that should be, and ultimately will be, carried out by the IT platform.
Not long after the Secretary of State visited Upavon, it was visited by a number of members of the Defence Committee, including me. It was clear that there had been problems for quite some time. The Capita representatives said that there was no reality in what they were being asked to deliver. When did he and his Ministers first become aware that there was a serious problem with the project?
As I said earlier, in early summer last year, it became clear that there were problems in integrating the Capita processes with the Atlas IT platform. It was when I visited Upavon in October that I formed the conclusion that there was no way of resolving the Atlas problem, and that we had to revert to the Capita option and place the integration challenge back with Capita to deliver a platform and a process.
Complex IT problems are common in the public and private sectors. It is important that steps have been taken to put the problems right. Will my right hon. Friend come back to the House in the near future to convince us that the targets on the recruitment of regulars and reserves are being met, so that the wider public can be confident that the problems have been resolved?
As was mentioned by the shadow Secretary of State, just before Christmas I published the trajectory of recruiting targets for the reserves that we will have to meet to deliver on our commitment of 30,000 trained reservists by 2018. I have given the House a commitment that we will publish the out-turn figures on a quarterly basis. Aside from the numbers, anyone who looks at the Army recruiting website will start to see measurable, noticeable improvements by the end of this month, as some of the interim solutions start to take effect.
The Secretary of State still seems confident that these are initial difficulties that can be overcome. I am not so convinced. I think that they are systemic problems. These problems shed light on his decision to reduce the regular Army before the reservists are fully tested. Now that he knows about the problems, will he say in his own terms at what stage he will say that these are no longer initial problems and that we need to review the situation properly because there is a systemic failure in his approach?
To interpret the hon. Lady’s question, I am clear that the problems with the ICT platform are not initial difficulties. We have made a clear decision that the Atlas platform is not fit for this purpose and have asked Capita to develop a dedicated platform for Army recruitment.
However, I think that the hon. Lady is probably referring to the wider challenge of recruiting the necessary reserve numbers. She is right to say that there are two components to that. There is the technical challenge of processing recruits through the pipeline. I have admitted to the House on a number of occasions that the system is very clunky, which is partly but not exclusively because of problems with the ICT platform. There is also the wider challenge, in the face of societal change and public attitudes, of encouraging people to want to join the Army Reserve and encouraging employers to want to support employees in joining the Army Reserve. It is very early days, but the signs are encouraging. I have no doubt that I will continue to report to the House as the evidence becomes more readily available over the course of the year.
In answer to my hon. Friend the Member for Salisbury (John Glen), my right hon. Friend referred to the reservist recruiting targets that he set out before Christmas. He has also indicated to the House when he first became aware of the IT problems. Will he confirm that the targets that he set out for reservist recruitment took into account the problems that he has outlined to the House in his statement today?
The fact that Atlas is not fit for purpose and the mess that we are in suggest that there was a fundamental flaw in the design of the project and in the project management thereafter. When such mistakes occurred under the previous Administration, the Conservative party regularly asked for somebody to resign. Who will take responsibility for this failure?
The hon. Gentleman might like to reflect on the previous Administration’s record of taking responsibility for their failures. Hon. Members who are interested in the IT challenge in government will recognise that there is always a tension between the desire to utilise existing platforms and contracts to deliver IT in an effective and efficient way that provides value for money, and the fact that the Department shoulders the integration risk. By asking Capita to develop a process using the existing Atlas platform, the Department effectively accepted the integration risk. We are now asking Capita to shoulder the integration risk by developing a platform that is purposely designed for its process.
I welcome the statement by my right hon. Friend today and his action to recruit reservists. However, the continued uncertainty over the Rifles reservist base in Truro is having an impact on recruitment. Will he give an update on his consideration of the case that I have made to keep the Rifles reservist base in Cornwall? People in Cornwall really do want the opportunity to serve their nation in this way.
My right hon. Friend the Minister for the Armed Forces tells me that he discussed that issue recently with my hon. Friend. We are looking at the decision on reserve basing in Cornwall. We have announced our plans for reserve basing, but have indicated that there is flexibility in those plans. We must, of course, recruit where the recruits are available. We recognise that necessity.
The Secretary of State referred to streamlining medical requirements as part of this process. We have all had people in our constituencies who have attempted to join the armed forces, but subsequently found that their bodies were not robust enough to fulfil the process. That is damaging for them and costly for the armed forces. Will the Secretary of State assure the House that streamlining the process will not lead to more people dropping out as a result of being unable to fulfil medical requirements further down the line?
The hon. Gentleman makes a good point, and there are two parts to the problem. One is the time it is taking us to get medical records from GPs, and we are addressing that specific problem. Even if that is overcome, however, there will still be a time lag in getting medical records from GPs. We are looking at whether we can use a system similar to that used in officer cadet training units in universities, where recruits can answer a simple medical questionnaire to enable them to begin taking part in some carefully defined activities. That would capture and get them engaged in that first flush of enthusiasm, rather than leave them sitting on the bench for months, waiting for medical records to come through from their GP.
Given the IT challenges we face, will the Secretary of State confirm that we are still on track to meet our recruitment targets? With the rebalancing of the Army’s regular reserve forces, will he say what more is being done to encourage those who have served as regular officers and soldiers and completed that service, and who might now consider service in the Territorial reserves and take advantage of that experience?
My hon. Friend makes a good point, and recruiting ex-regulars is an important part of our strategy for building the reserves, not least because ex-regulars drop straight to the trained strength if their regular Army service is recent enough. As he will know, we are currently offering an enlistment bounty for ex-regulars to join the reserves, which reflects some part of the cost saving that we make through not having to take ex-regular recruits through the full reserve training process.
This administrative quagmire is the latest part of what is becoming a worrying and costly pattern of events under the Secretary of State’s stewardship. He had a good reputation for competence around Whitehall before he took up his latest job. What has happened?
The important thing in a Department as large and complex as the Ministry of Defence, with a budget of £33 billion a year, is not to pretend that we can operate the vast range of contracts and arrangements we have in place without some failures. That is never going to happen. The challenge is to grip failure when it becomes apparent, and to manage and resolve it as quickly and efficiently as possible. I am prepared to stand on my record of delivering that kind of outcome.
As an officer commanding the Royal Air Force recruiting offices in Newcastle and Middlesbrough, I saw at first hand the challenges of recruiting particular trades and branches—at the time it was aerospace systems operators, and Royal Air Force regiment gunners. Will my right hon. Friend say what implications and consequences there have been for Royal Navy and Royal Air Force recruiting as a result of some of the challenges with Army recruiting in recent months?
The platform that the Army is putting in place is ultimately intended to deliver for all three services, but at the moment it is the Army that is principally affected by those problems. I understand that Royal Auxiliary Air Force recruitment is going extremely well at the moment.
On 11 December—about a month ago—I asked the Minister of State, Cabinet Office, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), why the Government had not planned the ICT better so that the new recruitment processes and Ministry of Defence systems would work better. He said:
“What we have done is to put in proper controls and create the conditions in which smaller and leaner organisations can come in and offer better value.”—[Official Report, 11 December 2013; Vol. 572, c. 225.]
Back in the real world, how many recruitment applications have fallen between the cracks of this failed system?
I have heard Capita referred to as a lot of things, but not normally as “smaller and leaner”. The hon. Gentleman is referring to precisely the tension that I mentioned a few moments ago—between the desire to allow smaller players to come in, provide IT solutions to the Government and utilise existing IT solutions, and the desire to ensure that the integration risk lies with the supplier. My view is that the Government are poor at managing integration risk, and I suggest that a solution that may look superficially good value, but which transfers integration risk to Departments, is probably to be viewed with some suspicion.
The Secretary of State explained that the interim solution will lead to an improvement in recruitment numbers over the next few weeks, and that we should start to see that improvement come through. Will he therefore explain why the interim solution is not capable of being turned into a much cheaper long-term solution?
There are a number of elements to that. I said that potential recruits seeking to access the system will notice an improvement in the quality of the IT platform, principally because the front end—the web-based portal through which they will access the system—will be replaced at the end of January by a system that is now running but still being trialled before it goes live. The system will work, but that is by applying additional manual resource, which, as I have already told the House, is costing us £1 million a month. The purpose of the partnering contract is to take about 1,000 personnel who were involved in the administration of recruiting out of that role, and save about £300 million a year. In the long term we still need to harvest that saving, and it will be necessary to have a proper ICT solution to do that.
That is difficult to say because, by definition, when we talk about recruits falling through the cracks, we are essentially talking about people who have become frustrated with the delay in the process and simply dropped out and gone away. We are seeking to track those people and to go back and re-engage them, as it were, but I know from anecdotal evidence—e-mails I get in my personal e-mail account—that a number of people have just got fed up with the system and given up. The Army is acutely conscious that we cannot afford to waste any potential recruits.
Will the Secretary of State confirm that the Royal Marines are outside this Army recruitment system because they come under the Navy recruitment platform? I am slightly alarmed to hear that he intends to roll this system out to the Navy and the RAF. What lessons might the Army learn from naval and RAF recruitment, and what efforts are being made to recruit from our great pool of cadet forces across all three services?
There are several questions there. First, the IT platform—the management of the process—is intended to provide a tri-service platform, and once it is fully operational, it will provide savings to the Navy and Air Force as well. Cadets provide an opportunity to showcase careers in the armed services, and we know that significant numbers of recruits have cadet experience. I want to be clear that we should support young people who join the cadets, and when they are interested in a career in the armed services, we should support them to explore the possibilities of such a career. As my hon. Friend will know, we are also committed to rolling out an increased number of combined cadet forces in state schools, to mirror the great success that those established combined cadet forces in independent schools have already demonstrated.
The Defence Committee report published today expresses concern that the rate of voluntary outflow from the armed forces is way above the long-term average. It also mentions the problems in pinch-point trades. What is the Secretary of State doing to address those problems? Would it make sense to modify the redundancy scheme, at least in the short term, until the recruitment problems are overcome?
I can assure the hon. Gentleman that nobody who is in an area where we have a shortage is eligible for redundancy. The redundancy programme essentially addresses the changed structure of the Army. At the same time, we have an over-supply in certain areas and a chronic shortage in others. In the short term, we are paying retention bonuses in pinch-point trades, particularly in the Royal Navy—sea-going engineering skills and nuclear engineering skills are in desperately short supply. We are actively managing the work force with retention initiatives. In the longer-term, we must grow the skills we need. We are working with the Department for Education and the Department for Business, Innovation and Skills to ensure that we generate the nuclear engineering skills the armed forces need as the UK civil nuclear industry regenerates.
Having undertaken recruitment programmes for some of the largest companies in the world, I can reassure the Secretary of State that such large initiatives always take time. This is not a sausage machine; it is about getting the right people for our armed forces. I urge him not to be too concerned with obsessing over quarterly targets.
I am sure my hon. Friend’s advice is sound, but hon. Members, who are focused on the challenge of reaching the 30,000 target by 2018, will want to hold the Government to account on the interim recruiting targets. However, my hon. Friend is right in another important respect. Changing how we recruit is not just about getting additional numbers in at the top of the hopper. It is about improving the efficiency of the process; ensuring that we get a greater percentage of initial applicants accepted; and ensuring that a greater percentage of those who are accepted for enlistment make it through to the completion of training and join the trained reserve strength. Making the process more efficient will save us money and deliver us the results we need.
Yesterday, I questioned Department for Work and Pensions Ministers about Capita’s failure to deal expeditiously with cancer patients who apply for the personal independence payment. Today, the Secretary of State for Defence asks hon. Members to have confidence in Capita sorting the recruitment mess out. Why should the country and the House have any confidence whatever in the capacity of that organisation to do that?
Outsourcing services is here to stay. At the cost that regular Army soldiers represent to us, we cannot contemplate using them to perform administrative tasks in the recruitment process in future. Those tasks must be outsourced to be sustainable. We are confident that Capita has a solution. At the outset of the contract, we chose not to adopt the Capita solution, but to go with extant departmental policy, which was to use the existing Atlas platform. We have now reversed that decision for the Army recruiting programme.
Based on the figures the Secretary of State has given today, the original decision to try to integrate the Atlas platform seems strange. When that decision was taken, was there no contingency plan? Given the history of trouble with Government IT projects and the importance of the project, what consideration was given to a contingency plan when the decision was taken?
The contingency plan was put in place and the fact that there was a risk was clearly recognised at the time. The contracts with both Capita and Atlas were written to allow for a reversion to a Capita-hosted solution if the Department decided that that was necessary. That is what we have done.