A PAY fight at a Ministry of Defence vehicle repair firm has intensified after the Government agreed a £140m deal to offload the business.

The Defence Support Group (DSG) has been sold to engineering company Babcock International.

The Government says a ten-year contract will see Babcock continue DSG’s work on maintaining, repairing and storing military vehicles, while significantly cutting defence budget costs.

DSG has a base in Catterick Garrison, North Yorkshire, and looks after Land Rovers and heavy duty trucks used in Afghanistan and by UK-based units.

However, the sale comes as hundreds of DSG’s 2,400 nationwide workforce, including some of its near 100-strong team at Catterick Garrison, remain on strike over a wage row.

Staff walked out last Monday as part of ten-day action, with the Unite union claiming workers feel betrayed by management’s one per cent pay rise offer.

Union officials are pushing for an eight per cent increase, saying the Babcock deal will give the Government a huge cash pot, which should be used to reward workers.

However, DSG bosses previously told The Northern Echo any changes were limited due to the Government’s stance on public sector pay, adding the strike was jeopardising the company’s valued industry reputation.

Mike McCarthy, Unite national officer, said: “As DSG is fattened up for privatisation, workers who support our armed forces have had pay cuts in real terms of nearly 18 per cent.

“This action is the longest in the group’s history, and any backlogs in repairs and maintenance sit squarely with management who need to get around the negotiating table.”

However, a DSG spokesman said it could offer no more than one per cent.

He said: “We are a highly regarded business with armed forces customers and this is not doing anything to help that; the strikers are damaging our reputation.

“The company cannot exceed what Chancellor George Osborne has talked about over the one per cent increase for public sector workers.”

Philip Dunne, Minister for Defence Equipment, Support and Technology, said the sale will cut considerable costs.

He added: “As well as the £140m upfront, the Army will also benefit from considerable savings over the next ten years.

“Signing this deal will put DSG on a sustainable long-term footing and transform the equipment maintenance and repair support the Army relies on.

“It also represents outstanding value for the taxpayer.”

The contract is due to start on April 1 next year.