Corporate report

Board minutes: 17 December 2024

Published 26 March 2025

Minutes of the 55th Board Meeting

held at 100 Parliament Street, SW1 and via video-conference

17 December 2024 11:30-16:00

Board members present:	Others present:
Hannah Nixon (Chair)	Malcolm Botting (for part)
Roy Barker	Colin Hill
Peter Freeman	Ben Johnson (for part)
Hugh Kelly	Ruaidhri Magee (for part)
John Russell	Simon McCullough
Joanne Watts	Siobhan O’Donoghue (minutes)
Claire Williams	Peter Regan (for part)
	Deana Rouse (MOD)
	Colin Sharples (for part)
	Tara Usher (MOD Representative)
	Amar Vara (for part)

1. Closed Board discussion

The Chair held a private session with Non-executive Board Members (NEBMs), the Chief Executive and the Chief Regulatory Officer.

2. Welcome, apologies, announcements, and declarations of interest

The Chair welcomed Board members and attendees to the meeting, including Deana Rouse (Director, Head Office & Business Operations, and MOD Deputy Chief Operating Officer), and Simon McCullough (Principal Regulatory Policy Manager), attending as the ‘open chair’ representative.

Apologies had been received from NEBM Alastair Groom, who had provided comments on the papers ahead of the meeting.

There were no declarations of interest.

3. Guest speaker: Deana Rouse, Director, Head Office & Business Operations, and MOD Deputy Chief Operating Officer

Deana Rouse provided an overview of current MOD Head Office areas of focus, including the Defence Reform programme; the Strategic Defence Review (SDR); and the Spending Review and productivity agenda. She also provided her perspectives on the SSRO’s role, performance, and priority workstreams.  Other areas discussed included the SSRO’s contribution to, and ongoing involvement with, the SDR; the importance of the SSRO’s independence; and the arm’s-length nature of the MOD’s sponsorship role.

On behalf of the Board, the Chair thanked Deana for finding the time to join the Board meeting, and for the helpful opportunity to hear direct her views of the SSRO’s work and the MOD’s steer on areas for future focus.

4. Minutes of 54th meeting held on 26 September 2024 (SSRO 01-1224), and action tracker (SSRO 02-1224)

The minutes of the Board meeting held on 26 September 2024 were approved as a correct record.  There were no outstanding actions.

The Board approved as a correct record the minutes of the 54th SSRO Board meeting held on 26 September 2024.

5. Chief Executive’s Report (SSRO 03-1224)

The Chief Executive presented his regular report covering recent activities, current priorities, recent stakeholder engagement activity, and key matters not covered elsewhere on the agenda.

Issues discussed included follow-up to the SSRO’s SDR submission; the SSRO’s role in any potential review of Single Source Contract Regulations (SSCR); positive feedback and insights from recent stakeholder engagement and site visits; and a read-out from the 12 December 2024 meeting with the Minister of State for Defence Procurement & Industry (Min DPI).  The Board also discussed the range of spending controls being applied across MOD and its ALBs and the resulting challenges and risks for the SSRO, which would be monitored as a corporate risk.

The Board discussed the summary results from the recent annual employee engagement survey, with the Chair of the Staff Group and Board People Champion providing their perspectives.  The Board supported the proposed approach to addressing development areas, and the final action plan would be shared with the Board, along with an update on actions arising from the previous engagement survey.  ACTION:  Human Resources Manager.

The Board noted the Chief Executive’s Report.

6. Corporate Performance Report (SSRO 04-1224)

The Board discussed the Corporate Performance Report, which summarised performance against the SSRO’s strategic priorities and Corporate Plan objectives, budget to date, and current corporate risks.  The discussion focused on Objective 3 – promotion of DefCARS data use and insights – including the increased use of DefCARS Power BI reports following the release of the Profit Rate Comparison Tool.  It was suggested that the encouragement by MOD of DefCARS and Power BI reporting use would further improve the associated KPI.

The Board noted the Corporate Performance Report.

7. Workforce Strategy update (SSRO 05-1224)

The Human Resources Manager provided an update on implementation of the SSRO’s Workforce Strategy, following its publication in February 2024.  The presentation included updates on succession planning arrangements and the commercial pathway training programme for staff: the Defence Advisor would provide an overview of the latter outside of the meeting.  The well-evidenced skills and experience of SSRO staff, which was augmented by practical experience acquired through industry placements, was also discussed, as well as the positive feedback received from industry and MOD stakeholders on the practical support provided by the SSRO.  The MOD Sponsor noted that it was important for the SSRO to include recruitment of staff with practical experience of large defence contracts.  ACTION: Defence Advisor.

The Board noted the Workforce Strategy update.

8. Defence Insights (SSRO 06-1224)

Board members welcomed the regular briefing from the SSRO Defence Advisor on recent developments and relevant issues across the defence landscape, with a particular focus on AUKUS and its relation to the single source regime.

The Board noted and discussed the defence insight update.

9. Strategic discussion: where next for the SSRO? (SSRO 07-1224)

The Head of Policy, Referrals and Support introduced the strategic discussion item, which explored the SSRO’s skills, experience, attributes and USPs, and how these might be deployed to best effect.

The Board welcomed the ambition set out in the presentation and provided feedback on a range of potential new activities and roles that could improve value for money and the pace of single source procurement.  Some of these proposals had been included in the SSRO’s SDR submission; others might form part of the SSRO’s contribution to the Defence Industrial Strategy, any potential SSCR review, or be taken forward as part of the SSRO’s corporate planning cycle.  Ongoing engagement with MOD and other stakeholders would help ensure that efforts had the maximum impact.

The Board discussed a range of potential new roles and provided its steer to inform development and prioritisation.

10. Strategic communications approach (SSRO 08-1224)

The Board received an update on the SSRO’s Strategic Communications approach, building on its discussion at the June 2024 strategy session.  The Board endorsed the proposed approach for expanding the SSRO’s reach through social and traditional media, a refreshed web presence, and in-person engagement, noting that increased visibility would help improve stakeholder understanding of the SSRO’s role and value.

The Board endorsed the proposed strategic communications approach.

** The MOD Observers left the room for the duration of the following item **

11. 2025-26 Profit Rate Assessment update (SSRO 09-1224)

The Board received an update on the 2025-26 baseline profit rate (BPR), capital servicing rates (CSRs), and government owned contractor rate (‘the rates’).  The paper also drew attention to minor amendments to the previously agreed rates methodology, which required Board approval. The changes were not fundamental or controversial.

The Board’s discussion focused on handling and engagement with MOD in terms of the supporting material and the final recommendation to the Secretary of State, noting that there could be additional queries from the new Ministerial team.

The Board would approve the final rates for recommendation to the Secretary of State at its 14 January 2025 meeting.

The Board:

• approved minor updates to the assessment methodology;
• considered and commented on the provisional rates, noting these were indicative of the final assessment, (to be presented for Board approval in January 2025); and
• considered and commented on the supporting materials to be provided to the Secretary of State to support their decision in January 2025.

** The MOD Observer re-joined the meeting **

12. Digital Strategy update (SSRO 09-0924)

At its September 2024 meeting, the Board agreed to pursue a single strategy for all the SSRO’s digital activity.  The Chief Regulatory Officer now presented an update on the development of the Digital Strategy including progress to date; the proposed vision and aspirations (both for DefCARS and reporting, and the SSRO’s wider operations); and the anticipated timeline for this work.

The Board welcomed the update and emphasised the importance of this workstream.  The Board would consider more developed and detailed proposals at its March 2025 meeting, alongside the Corporate Plan 2025-28.

The Board considered and commented on the proposed vision and direction of travel for the SSRO’s Digital Strategy.

13. Report from the Audit and Risk Assurance Committee (SSRO 11-1224)

The Chair of the Audit and Risk Assurance Committee presented the minutes and oral updates from the recent meeting.

The Board noted the minutes of the 21 November 2024 Audit and Risk Assurance Committee.

14. Future workplan (SSRO 12-1224) and reflections on meeting

The Board noted the summary of future Board meeting business and reflected on the business considered at the meeting.

14. Any other business

NEBM Roy Barker provided a read-out from a recent MOD NED engagement session on the Defence Reform programme.  Slides from the event had been made available to Board members.

15. Next Board meeting

The next meeting of the Board would take place on 14 January 2025.