Statement made by
My right hon. Friend the Secretary of State for Defence (The Rt Hon Ben Wallace MP) has made the follwing Written Ministerial Statement.
In 1993 the Ministry of Defence (MOD) entered into a Government owned Contractor operated (GoCo) arrangement with Hunting-BRAE whereby Hunting-BRAE operated the Atomic Weapons Establishment (AWE) on behalf of the Government. In 1999, following a competitive tender, a new 25-year contract was awarded to AWE Management Ltd (AWE ML).
On the 1 July 2019 the MOD triggered the Successor Arrangements clause with AWE ML to enable it to consider alternative viable management options ahead of the current contract expiration. Although the existing arrangements have brought stability to the organisation the MOD has concluded that AWE will revert to a direct Government ownership model.
Under the revised arrangements, AWE plc will become an Arms-Length Body wholly owned by the MOD. It will continue to be managed by a world leading team and a new Board will be appointed by the MOD. The new business model will see AWE plc continue to draw on private sector specialist support to strengthen capability as well as playing a key role in managing capital projects and contracts. This approach is recognised as best practice in other major complex programmes.
The MOD, AWE ML and AWE plc will jointly manage the termination of the contract and the transition to the new arrangements, which are anticipated to be completed by the end of June 2021. This will be completed in close co-operation with workforce representatives, regulators, the supply chain and the local community.
The continued safe and secure operation of AWE sites will remain the over-riding focus during the transition and under the revised management structure.