08 Nov 05. Subject to consultation, two of the Ministry of Defence’s Trading Funds, ABRO and DARA, are to be streamlined as the MoD takes the next steps to modernise its logistics support to the Armed Forces, Adam Ingram, The Armed Forces Minister, announced today.
The rationalisations will further improve the support provided to the front line Armed Forces without affecting operational capability. All savings will be reinvested in Defence.
The announcement comes as the second part of a two phase rationalisation programme announced by the Secretary of State for Defence on 21st July 2005. Phase one saw a total reduction of 388 posts.
In order to allow ABRO to modernise and to be able to match changes to its workload, the Armed Forces Minister announced that sites at Warminster (Wiltshire) and Colchester (Essex) will close by March 2007. Donnington’s armoured vehicle and engine facilities, together with their ‘one stop shop’ for unscheduled repairs will also close by March 2007. There will be significant rationalisation of the Head Office in Andover.
Depth maintenance and repair of the armoured fleet will be concentrated at Bovington in Dorset. ABRO will also operate a number of new smaller facilities close to the Army front-line customer including Warminster and Colchester areas.
There will be redundancies across all ABRO sites, all of which will occur by 2010. Up to 628 of these will be at Donnington, 100 at Stirling, 96 at Colchester, 185 at Warminster, 107 at Bovington, 77 at Andover and 33 at Catterick.
These changes are essential for a number of reasons:
1. The Defence Logistics Organisation (DLO) is introducing a series of reforms to improve the efficiency with which the fleet is being managed and maintained; this reduces the requirement for deep repair;
2. ABRO itself has become more efficient, reducing the levels of required manpower. For example, the cost of base overhaul of the Warrior armoured vehicle has been reduced by 15% and the time taken cut by half, from 107 days to 53. As a result it has been possible to release 40 more vehicles back to front line commands.
3. Whilst ABRO has some unique capabilities, it is facing increasingly direct competition as a result of new and more efficient DLO contracting strategies.
4. Whilst there is no long-term strategic need to retain ABRO within MoD ownership, it is not ready to expose all or parts of its business for sale for a number of years: the business needs to become significantly more efficient and some of MoD’s long-term support strategies need to mature. However, significant rationalisation is necessary so that ABRO can become more competitive.
5. The reduction in surplus capacity will occur without affecting operational capability, as ABRO will be able to increase capacity by up to 40 per cent if there is an urgent operational requirement.
Having rationalised its core defence business, ABRO will be looking to develop profitable commercial revenue across the defence sector and beyond into other markets. There are no guarantees of success and we must ensure that the taxpayer’s position is protected. If ABRO can become much more competitive, it could have the potential to grow into new markets. It has already had some success in the rail maintenance and public sector fleet management sectors.
Mr Ingram said: “It is with great regret that I have had to announce job losses at ABRO and DARA. Employees at both organisations have provided the MoD with an excellent service over the years.”
“We will help to find those involved alternative employment and we will make every effort to use natural turnover and voluntary redundancy. However, a significant number of compulsory redundancies can be expected.”
“We are committed to modernising our Armed Forces. ABRO and DARA are not immune to the difficult changes we have had to make across Defence so that we can make the best use of our resources to support an Armed Forces that is fit for