DSG up for sale say US defence experts(October 22, 2010)
The Defence Support Group, DSG, formed by the merger of ABRO and DERA, is to go under the hammer and is expected to raise 500 million pounds for the taxpayer.
In Warminster the outfit - often called the REME, 27 Command Workshop, ABRO and now DSG, employs just under 200 people but at its peak in the 1960s it employed more than 600.
DSG has several bases around the country employing 3,300 people - around a fifth of whom are expected to lose their jobs as a result of Tuesday's review.
Warminster is expected to escape most of the blood letting but Bovington in Dorset which specialises in tanks will be a major jobs loser.
It is unclear whether the land or just the business will be sold by the Government but the US source, Defense News, mentions two large companies in the story - BAE Systems and Lockheed-Martin - which could be interested in buying as they already have close links with DSG.
The company has an annual turnover of around 200 million pounds.
DSG were linked with another company last year but the deal fell through.
''I think they should leave the business as part of the state as in the long run we will all be losers financially as a result of this move,'' said Steve Dancey, a former chairman of Wiltshire's Defence working party.
'If it is sold off we will pay more and the only ones to benefit will be the spivs and gamblers in the City of London.''
American firms already hold a large percentage of UK defence contracts with KBR forming 50 per cent of Aspire Defence, the group given millions to fund the rebuild of the Salisbury Plain living accommodation.
They are correct - the official announcement below :
Spending Review 2010 - The Ministry of Defence
HM Treasury (National)
Over the course of the Spending Review period, the Ministry of Defence (MOD) will reduce resource spending by 8% in real terms, and reduce capital spending by 8% in real terms. The Department’s administration costs will also be reduced by 33%. The Department will make at least £4.3 billion of non-frontline savings, of which around £3 billion is planned from efficiency programmes, over the Spending Review period.
Ministry of Defence
1 In this table, Resource DEL excludes depreciation
The Department will manage these reductions by:
· reducing or deleting older or non-essential capabilities such as Harrier jets, Nimrod MRA4 maritime patrol aircraft and four Frigates;
· reductions of around 17,000 Service and 25,000 civilian personnel as set out in the SDSR;
· rationalising the defence estate including the sale of surplus land and buildings, likely to generate running cost savings across the estate of up to £350 million per year by 2014-15;
· selling telecommunications spectrum and corporate assets (including the Defence Support Group and the Marchwood Sea Mounting Centre), likely to raise in excess of £500 million over the Spending Review period;
· efficiencies and improvements in military training, including the use of estate for training and supporting infrastructure;
· savings from contract re-negotiations with the Defence industry;
· annual savings of over £300 million per year by 2014-15 from civilian and military allowances;
· reductions in commodity spend;
· implementing the successor deterrent Value for Money review.
In addition to the above, the Department will be adopting the following ideas, suggested through the Spending Challenge process:
- civilianise Army Non-Regular Permanent Staff posts (NRPS) that do not need to be filled by military personnel freeing up servicemen and women from frontline roles.
- saving electricity from reducing unnecessary lighting across the Defence Estate
The Department will also deliver the capability priorities as agreed in the SDSR:
· new helicopters, strategic airlift, new armoured vehicles, and enhanced Special Forces capabilities;
· fleets of new hunter-killer submarines and multi-role destroyers;
· two new Queen Elizabeth class aircraft carriers;
· new fifth generation Joint Strike Fighters to complement the already world-beating Typhoon; and
· a contribution to a cross-government programme to meet increasing cyber threats.
Defence Secretary Dr Liam Fox said:
“The SDSR has reshaped our Armed Forces to tackle future and emerging threats. We now also know how much money we will have to carry out the vital job of protecting Britain’s national security. This will enable us to bring defence policy, plans, commitments and resources into balance so that we can emerge with a coherent and affordable defence programme for the future.”