One small defence firm lost 163 security clearances on a single date at a cost of £68,000 over twelve months, including fourteen redrafts of a single access letter, according to evidence given to the Defence Committee.
Julian David, chief executive of techUK, raised the issue during a session on the implications of the Defence Investment Plan for British industry.
He said: “In summary, to sponsor someone’s security clearance a company now requires a contract specific sponsor access letter. At the moment, Government Departments do not seem to be able to agree who pays to process that. The impact is real. One provider has estimated that thousands of people are affected. One SME that we know of lost 163 clearances on a single date, costing it £68,000 in 12 months, including 14 redrafts of the access letter to put right.”
Earlier in the session David told MPs that the change is “having a real effect because of the change in the way that it is done on the sponsoring”, and that it affects large businesses as well as small ones, “with people losing 1,600 clearances, and SMEs having to reapply because their sponsor route has gone.”
Kevin Craven, chief executive of ADS, set out two separate problems for the committee, saying: “One is that MOD is currently providing security clearances that can be used by other Departments that do not necessarily have their own security clearing apparatus. That appears to be a source of concern. That is one issue.”
On the second he said: “A separate issue is that the MOD is looking at organisations that provide third-party sponsorship for those security clearances, including my own organisation. We are currently sponsoring some 14,000 security clearances for 700 SMEs and other organisations in the supply chain. If that authorisation were removed, the burden for supplying those clearances would shift in some instances to the primes, which are already struggling with security clearances for their own staff. There are large numbers of SMEs that want direct access to the MOD and are using these third-party clearance houses to obtain their security clearances. That would be a major problem, and it looks like it is a major problem at the moment.”
Tan Dhesi, the committee’s chair, told the witnesses that the committee had been pursuing security clearance already, and that it featured prominently in its report on AUKUS because members thought matters needed resolving before they impeded delivery.
Dhesi said the committee had previously been advised that the situation was much better and all sorted, and asked what had changed and why it had become more difficult.
David told MPs the issue also constrains efforts to bring new sectors into defence, saying the automotive supply chain is made up of small and medium-sized enterprises who are not typically people who have held security clearance, and that obtaining it has become more difficult for a smaller firm.
The government has been seeking to bring non-traditional suppliers into defence work, and Stephen Phipson of MakeUK told the committee that many manufacturing companies outside defence want to enter the market and that MakeUK runs a service helping them make the transition.
