The Ministry of Defence has opted not to renew its £36 million defence business services (DBS) contract with Serco, choosing instead to bring the management of the service back in-house.

The MoD’s DBS was created in July 2011, providing a comprehensive range of services including HP, finance, information and vetting to a wider department.

Serco has been contracted to provide these services through a shared services centre (one of the largest in Europe) since 2012. The public sector outsourcing giant was originally contracted to “drive down costs and deliver efficiencies” with savings of roughly £71 million expected. It is unclear whether these targets have been achieved.

The MoD told Spend Matters that the contract has reached its “natural end” and that the decision to bring the services back in-house was made so that management can “fully consider options for the next phase of DBS”.

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