https://insideDIO.blog.gov.uk/2013/11/18/partnering-with-the-private-sector/

Partnering with the private sector

DIO’s priority is to support our Armed Forces by providing the facilities and services they need to live, work, train and deploy on operations. We’re determined to give the men and women who protect our country the best possible service.

We’re currently exploring whether working with a Strategic Business Partner (SBP) from the private sector could help us become a world-class infrastructure provider. This work has been going well and represents a leading-edge way of doing business that, if successful could be transferred across Government.

DIO Director of Business Partnering Dr David Marsh
DIO Director of Business Partnering
Dr David Marsh

An SBP could help DIO unlock knowledge, skills and resources that are currently unavailable within the organisation and the wider Ministry of Defence (MOD). It could also save taxpayers’ money. Our new partner would be incentivised to deliver savings and increase efficiency and would help us to go that extra mile by bringing best practice from industry.

Fresh opportunities

If the decision is made to bring in an SBP it will mean great change for DIO.  It will also bring a wealth of fresh opportunities for our staff, as well as current and future industrial partners. Suppliers’ relations with the MOD will remain consistent and new business opportunities may open up, whilst the Tendering process would become easier as companies deal with industry peers.

DIO has received bids from the three bidding consortia: Telereal Trillium / KPMG / Mace; Serco / DTZ / Bechtel; and Capita / URS / PA Consulting.

Unincorporated’ or ‘Incorporated’

Each bidder has been asked to look at two options for partnering the DIO business - that’s to say adopting an ‘unincorporated’ or an ‘incorporated’ business model.

An ‘unincorporated’ model would embed an SBP executive management team into the existing DIO. This new team would bring appropriate expertise and resources as needed. The SBP would be responsible for managing the DIO under the EOM construct and business process framework.

The ‘incorporated’ model is the first of its kind and places DIO on the leading-edge of work to transform how MOD operates. It wouldn’t come into existence before 2016 and its first two years would be exactly the same as the ‘unincorporated’ model.

After this period, the DIO would become a Government Company (GovCo) - a separate legal entity owned by the Secretary of State and managed by the SBP under contract.  It would be an Arms Length Body (ALB) like other Government organisations we work with, for example, the Environment Agency, Natural England and the Planning Inspectorate. The MOD will oversee the activities and performance of the new entity.

Excitement and innovation

In all the excitement and innovation, however, it is important to remember that an SBP will only be appointed if it helps to more efficiently provide Britain’s Armed Forces with what they need to do their job and gives value to the taxpayer. A third option exists for DIO not to appoint an SPB and continue our transformation through DIO’s new operating model, which we launched in spring this year.

Ultimately, our priority is to support our Armed Forces as they prepare for operations. We believe that bringing private sector expertise into the Civil Service may unlock a wealth of opportunity to help DIO better fulfil that responsibility.

7 comments

  1. Comment by Jon Butler posted on

    I would like to understand what knowledge, skills and resources are missing from the present organisation and what specifically are the best practices DIO does not possess that Industry is believed can provide?

    Reply
    • Replies to Jon Butler>

      Comment by Inside DIO posted on

      An SBP would embed an executive team into DIO with commercial infrastructure management skills, knowledge and experience unavailable within the MOD. Our SBM team has carried out detailed skills analysis work and a number of potential skills areas have been identified. These include commercial awareness, marketing and productivity.

      Reply
  2. Comment by Ian Jackson posted on

    I can understand how a SBP would bring commercial infrastructure management skills, knowledge and experience unavailable within the MOD. But how would that apply on the Training Estate where the outputs are for example Training Safety and MOD Logistics and where the knowledge and experience does exist.

    Reply
    • Replies to Ian Jackson>

      Comment by Inside DIO posted on

      Training estate safety and MOD Logistics outputs would remain a priority for the DIO. Where the SBP would add value is through its embedded executive team driving the transformation of DIO further and delivering estate rationalisation and efficiency improvements. The key areas where it is felt the use of a SBP would bring additional capability to DIO is through the direct access to market-competitive skills, greater capacity for transformation and access to specialist skills through reach-back to the SBP companies.

      Reply
  3. Comment by Robert Balcombe posted on

    District and local authorities have been using variants of the above for years to manage and deliver fixed infrastructure, successfully embedding private sector companies within their organisations for all the reasons noted above.
    Once the fine detail of responsibilities has been agreed within the rules of apportionment and subsequent engagement, they work extremely well. Just watch those details; they are the keys to that success.

    Reply
  4. Comment by Mark Waring posted on

    Many of DIO's senior management are in permenant posts, some of them recently appointed. I would like to understand how it is envisaged that a SBP partner will bring in its executive management team next year, how responsibility will move across to them, and what will happen to the senior DIO staff they replace. I would also like to understand how the DIO's military staff will be line managed within the SBP.

    Reply
    • Replies to Mark Waring>

      Comment by Inside DIO posted on

      No decision has been made on whether or not to appoint an SBP. Should an SBP be appointed, then a transition plan will be implemented to embed the SBP into DIO and manage the transfer of responsibility.

      Reply

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