Transparency data

Board minutes: 28 January 2020

Published 14 April 2020

Minutes of the 30th Board Meeting

Board Room, Finlaison House, 15-17 Furnival Street, London EC4A 1AB

Tuesday, 28 January 2020 14:00 to 16:10

Board members present	Others present
George Jenkins (Chairman)	Rt Hon Philip Dunne MP (item 2)
David Johnston	Colin Hill
Marta Phillips	Mike Wetherell
Mary Davies	Malcolm Botting
Peter Freeman	Colin Sharples (item 5)
Neil Swift
David Galpin
Matthew Rees

1. Welcome, apologies, announcements and declarations of interest

1.1. The Chairman welcomed members to the 30th meeting of the Board. There were no apologies or declarations of interest.

1.2. The Chairman thanked non-executive Board members for completing the questionnaire that had been circulated as part of his annual review of Board effectiveness, and for contributing their views in recent one to one meetings. Executive members would be asked to complete the questionnaire and would have an opportunity to discuss Board effectiveness with the Chairman in February, before the Chairman’s report was submitted to the March meeting of the Board.

No interests were declared.

2. Presentation by Philip Dunne MP

2.1. The Chairman welcomed Philip Dunne MP to the meeting and thanked him for accepting the Board’s invitation to speak. The Board was conscious of Philip Dunne’s role in establishing the Defence Reform Act as Minister for Defence Procurement between 2012 and 2016. The Act had led to the creation of the SSRO in 2014, and the organisation was grateful for his leadership and support at that time and afterwards. The Chairman noted that the Board was interested in discussing Philip Dunne’s 2018 report: Growing the contribution of defence to UK prosperity and that Board members would be invited to ask questions after his presentation.

2.2. In his presentation, Philip Dunne made the following points:

• He had been asked to undertake a report into the role played by defence in the economic prosperity of the UK, with the purpose of articulating the MOD’s objectives in this area. The report had been provided to the Secretary of State in the Spring of 2018. It had provided a series of snap-shots that highlighted differences between the regions of the UK in terms of military capability and industry.
• The focus of the new government would be on securing free trade deals and domestic priorities, with the economy providing the stimulus for meeting those priorities. The prosperity agenda formed a significant part of the manifesto and investment would be made into areas of the country that had not seen it before to demonstrate economic benefits.
• Philip Dunne had been Deputy Chair of the Defence Growth Partnership for the past year and this had provided continuing exposure to the defence sector and had highlighted examples of agility in defence procurement. He provided the example of the use of rapid procurement teams, which comprised experienced staff within DE&S and secondees from industry. The teams were located off-site and provided with civil service support, appropriate resourcing and were empowered through political will to reach milestones at a rate that had not been achieved before, for example the Type 31e frigate. Such examples highlighted the opportunity for the Department to improve procurement further, for example through the defence foreign policy and security review in 2020.
• Philip Dunne remarked that the SSRO was likely to have developed data sets that had never existed before, and that these could be utilised by the Department in its procurement practices, leading to efficiencies in practice and contributing to cost effective equipment that could be sold abroad. The SSRO occupied a space in between the armed forces and industry, and its role was to reduce points of friction in the relationship. There remained an inherent tension between the two stakeholders, and the SSRO had to strike a balance and ensure fairness and impartiality. Philip Dunne thanked Board members for the commitment they had demonstrated to the organisation.

2.3. Following the presentation, Board members asked questions relating to the points covered. The SSRO was about to consult on its next Corporate Plan and Philip Dunne’s views were sought on how the Plan could gain traction and support, and how examples of agile procurement could be used to improve practices within defence.

3. Minutes of 29th meeting of the Board, 12 December 2019, and action tracker

3.1. The Chairman introduced the minutes of the Board meeting held on 12 December 2019. Four actions had been recorded on the action tracker and had been completed or were reported on in papers elsewhere on the agenda.

3.2. The minutes of the 29th meeting of the Board were approved as a correct record.

4. Chief Executive’s Report

4.1. Neil Swift, Chief Executive, presented his report to the Board, which provided an update on items not included elsewhere on the agenda. The Chairman had met with the MOD’s DG Finance on 15 January and had discussed the SSRO’s Corporate Plan 2020-23, Ministerial priorities, the SSRO’s proposed budget and the appointment of non-executive Board members. The Chief Executive had recently met with the newly appointed Chairman of DE&S, Mark Russell.

4.2. Since the last meeting the SSRO had published a quarterly statistics bulletin, updated Reporting Guidance and the consultation document for the 2020 Review of Legislation, which the Board had approved at its December meeting. The Chairman had also written to the Secretary of State with the SSRO’s recommendations for the 2020/21 baseline profit rate, capital servicing rates and SSRO funding adjustment. The SSRO was due to publish its updated compliance methodology and Allowable Costs guidance in the coming week.

4.3. The SSRO had been working with the MOD on the appointment of non-executive Board members to the SSRO Board. A submission was due to be put to the Minister for Defence Procurement proposing a job description and timetable for the recruitment process.

4.4. It was proposed that there should be workshops for Board members on the establishment of an expert panel and the development of a graduate intake programme. Proposals for these would be shared with Board members. Action: Neil Swift.

The Board

• noted the information provided in the report.

5. Corporate Plan

5.1. David Galpin, Director of Legal and Policy, presented a report on the draft 2020-2023 Corporate Plan. Board members had discussed the Corporate Plan at Board meetings on 26 September and 12 December, and at workshops on 29 October and 21 November. Consistent with the SSRO’s Stakeholder Engagement Strategy and consultative approach, officials had engaged with the MOD and with industry throughout the development of the plan, including at the SSRO’s Operational Working Group and in bilateral meetings.

5.2. The draft Corporate Plan reflected the SSRO’s indicative budget and assumptions, with related risks and issues. The Board noted that there was limited capacity within the draft budget to deliver tasks beyond existing workstreams. Any additional resource requirements would require an increase in the overall budget and a business case to be prepared for the MOD for additional resource, or a re-prioritisation of work. Additional resource would be required for certain proposals within the Corporate Plan, including those relating to digital transformation, changes to DefCARS, secondments and the establishment of a panel of experts. Board members requested amendments to some of the wording in the Corporate Plan to emphasise that a more ambitious programme necessitated further funding. The Board discussed the work programme and noted the pressures that would result.

5.3. The draft Corporate Plan followed the structure that had been discussed and agreed at the Board meeting on 12 December. The Plan had four core regulatory objectives and three supporting objectives, an additional people-related value, a new statement of purpose, a new section on how the SSRO adds value and prioritisation principles that focused on stakeholder feedback, benefits, urgency and costs. The SSRO would seek to deliver three major multi-year activities under the plan: the future development of DefCARS; overheads; and amendments/variance.

5.4. The key performance indicators had been reviewed for each objective, and a mixture of 16 quantitative and qualitative indicators were included in the draft Plan. Some indicators had been retained from the previous Plan to ensure continuity and comparability, but others had changed where they were no longer relevant or where a different metric was identified as a better measure of the organisation’s performance. Board members discussed the indicators and suggested potential improvements, alternative ways of presenting them and methods of measurement.

5.5. The Board discussed the Plan, including initial feedback from stakeholders, and approved it for consultation. The Corporate Plan would now be sent to the MOD, ADS and all defence contractor members of the Operational Working Group on 29 January, requesting feedback within four weeks. The final plan would be presented to the Board for approval on 26 March, with the intention of publication on 31 March 2020. It was agreed that a workshop would be arranged with Board members to consider the feedback received. Action: Neil Swift.

The Board:

• commented on the draft Corporate Plan;
• approved sending the draft Corporate Plan to the MOD, ADS and all defence contractor members of the Operational Working Group for feedback;
• delegated authority to the Chairman, after consultation with the Chief Executive, to agree minor changes to the draft Corporate Plan before OWG circulation on 29 January;
• agreed that a four-week consultation period should be allowed for feedback; and
• approved the 2020/21 budget.

6. Corporate Performance Report

6.1. Mike Wetherell, Interim Director of Corporate Resources, introduced the Corporate Performance Report, which provided a regular update on how the organisation was delivering against its priorities as set out in the 2019-22 Corporate Plan. The Board was provided with an overview of issues highlighted by the report and was informed that the next staff engagement survey would be issued in the coming fortnight. Board members questioned the rating on objective 7, data and decision making, and it was agreed that Mike Wetherell would write to Board members with further information following the meeting. Action: Mike Wetherell.

The Board:

• reviewed and commented on the Corporate Performance Report.

7. Update from the Regulatory Committee on 23 January 2020

7.1. Peter Freeman, Chair of the Regulatory Committee, presented an update from the Committee’s meeting held on 23 January 2020. The Committee had discussed matters relating to the profit rate recommendation, the Allowable Costs guidance, the referrals guidance and compliance methodology. The Committee had also discussed the pack of papers that had been prepared in advance of the meeting and agreed that it should be reduced in volume in future.

The Board noted the update from the Committee.

8. Future agendas and any other business

8.1. The Chairman introduced the two-page document showing the business of all Board and sub-committee meetings for the next year. The Board agreed that the forward look should in future include workshops for Board members. Action: Neil Swift.

8.2. The latest draft of the job description for new non-executive Board members would be circulated to Board members. Action: Mike Wetherell.

8.3. The next meeting would take place on 26 March 2020 at 2:00pm.