THE Ministry of Defence is being urged to review its practice of outsourcing services after MPs complained that contractors are dropping standards and “squeeze” workers to increase profits.

The defence committee said in its report, published today, that outsourcing appeared to be the default position, with little consideration given to providing services in-house.

It found that the MoD was not always willing to step in and enforce expected standards.

MPs called it “an absurd state of affairs” that the ministry was not allowed to look at a contractor’s previous performance when assessing a bid, a state of affairs it said should be “rectified immediately.”

Defence Fire and Rescue was given as an example of an outsourced service that would benefit from an MoD review, with a potential reduction of staffing levels in the future and a high number of voluntary exits.

Capita, which runs the contract, is starting to lower its standards, said the report, warning that contractors do so and “squeeze employees to raise their profit margin."

Committee member Mark Francois called on ministers to use the Procurement Bill announced in the Queen’s Speech to change the rules for awarding new contracts.

The report expressed regret that subcontracted staff often felt excluded from the “wider defence family” even though their roles are integral to the service.

And the terms and conditions of outsourced employees are worse than those of their directly employed counterparts, with reduced wages and benefits, said the report.

The committee recommended that the MoD ensure that contracted staff receive comparable employment contracts to directly employed staff.

A Capita spokesperson said: “The evidence shows our record of delivery on this contract is strong.”

The MoD said that “contracted ancillary staff often have training and career prospects superior to an in-house service.”