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<p>The Ministry of Defence (MOD) has set up two arm's length organisations in the
last five years that are wholly funded from within its budget.</p><p>Defence Equipment
and Support was set up as a bespoke trading entity on 1 April 2014. It has a number
of freedoms and flexibilities to manage its own business, outputs and workforce within
an operating cost envelope set to drive significant efficiencies. This includes the
freedom to implement its own pay and grading structures to reflect the highly specialised
labour market in which it operates.</p><p>The Single Source Regulations Office (SSRO)
was established by the Defence Reform Act (DRA) 2014. The SSRO is wholly funded from
within the MOD budget, via grant-in-aid. SSRO employees are not subject to civil service
pay scales, terms and conditions. The DRA specifies that SSRO employees are not in
the civil service of the state, ensuring the independent discharge of their duties.</p>
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