Defence Reform Act 2014

The Defence Reform Act 2014 is an Act of the Parliament of the United Kingdom. It has 51 sections and seven schedules, and is concerned with defence procurement and the UK Reserve Forces, particularly the Territorial Army.

Long title

The long title of an Act (see the infobox opposite) is of significance because it forms part of the Act, and is the 'first of the elements of an Act ... that can be used to find the meaning of the Act, and generally its scope.' in future legal decisions.^[2]

Territorial extent

The Bill extends to the whole of the United Kingdom. Amendments to, and repeals of, other legislation made by Part 3 have the same extent as the provisions amended or repealed. Amendments made by this Act to the Reserve Forces Act 1980, the Reserve Forces Act 1996 and the Armed Forces Act 2006 can be extended to the Channel Islands and/or the Isle of Man by provisions that already exist in those Acts.^[3]

Background

The Queen's Speech on the opening of the 2013-14 session of Parliament included a reference to 'Measures...to improve the way this country procures defence equipment, as well as strengthening the Reserve Forces.'^[4] In the background note to the speech,^[5] the Government said

The Bill would enable the Ministry of Defence (MoD) to fundamentally change the way it procures and supports defence equipment by reforming the Defence Equipment and Support (DE&S) organisation and strengthening the arrangements for single source (non-competitive) procurement. The Bill would increase the size and role of our Reserve Forces.

Policy contents

Procurement

A White Paper, "Better Defence Acquisition" covering the procurement provisions referred to in the speech was published in June 2013.^[6] Chapter 1 of the paper addresses procurement carried out by the MOD's 'Defence Equipment and Support' (DE&S)function, and identifies three long standing significant problems ("Root causes") within procurement which the Government believes has contributed to poor performance:

• An overheated equipment programme,^[7] resulting in constant changes to the MOD's procurement schedule, and resultant cost increases and delays;
• An unstable interface between the requester and deliverer,^[8] meaning that division of responsibility between DE&S and the ultimate customers for the equipment was not always clear, and;
• Insufficient Skills and management freedoms within DE&S,^[9] resulting in DE&S being unable to recruit and retain personnel who were able to consistently negotiate on equal terms with industry.

The paper argued that the first two of these problems had been solved, by balancing the MOD's overall budget, but that if the overheated equipment programme was not to return, fundamental change would be required. The paper suggested two solutions. The first, preferred, proposal,^[10] would be the establishment of a 'Government-Owned, Contractor Operated' (GOCO) model for defence procurement, whereby a private sector consortium would effectively act as the MOD's procurement agent - requirements would still be specified and decided upon by the Department, but the procurement itself would be managed and delivered by the private sector. The second option, "DE&S Plus" (consisting of negotiating with the Treasury for increased management freedom for DE&S but keeping its staff in the public sector, was discussed, but only in terms of 'the public sector benchmark against which the GOCO option will ultimately be judged', rather than a proposal given equal weighting with the GOCO option.^[11]

The second chapter of the paper addressed 'single source procurement' - that is, 'procurement of equipmentand support...where the MOD is unable to source its requirements through open competition'.^[12] The proposal, which closely follows the recommendations of a report by Lord Currie^[13] which was published in 2011) was to create what would effectively be a regulatory body called the 'Single Source Regulations Office', (SSRO) to manage single-source procurement. The SSRO would replace the existing regulator, the 'Review Board for Government Contracts'.^[14]

Description

The Act has four parts:

Part One: Defence Procurement

This Part has 12 sections, and invokes schedule 1 (by section 4)^[15] schedule 2 (by section 7)^[16] and schedule 3 (by section 10).^[17]

Part 2: Single-Source Contracts

This Part comprises the majority of the Act in terms of number of sections and clauses: it consists of section 13-43. Schedule 4 is invoked by section 13,^[18] and schedule 5 by section 38.^[19]

Part 3: Reserve Forces

This part contains 5 sections 44-47. Schedule 6 is invoked by section 45^[20] and schedule 7 by section 46.^[21]

Part 4: Final Provisions

This Part contains sections 48-51, but has no actual provisions, and only contains sections that relate to the short title of the Act, procedures for commencement, and the Act's territorial extent.

Parliamentary history

First Reading

The Act had its first reading in the House of Commons on 3 July 2013. Its backers were the Prime Minister, the Deputy Prime Minister, Treasury Chief Secretary Danny Alexander, Business Secretary Vince Cable, Justice Secretary Chris Grayling, Cabinet Office Minister Francis Maude, Dominic Grieve and the Bill Minister, Minister for Defence Equipment and Support, Philip Dunne.

Second Reading

Commons Second Reading took place on 16 July 2013.^[22]

After the debate, formal motions covering the programme resolution and the money resolutions for the Bill^[23] were also passed.

Subsequent stages

Subsequent Parliamentary stages were as follows:

The Bill returned to the House of Commons on 29 April 2014, where a programme motion was passed, and Commons Consideration of Lords' Amendments took place.

Royal Assent

The Bill was given Royal Assent (and thus became an Act) on 14 May 2014.^[24]

Further reading

• House of Commons Hansard, http://www.parliament.uk/business/publications/hansard/commons/
• House of Lords Hansard, http://www.parliament.uk/business/publications/hansard/lords/

References