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Volume 522: debated on Monday 31 January 2011

The price for the future strategic tanker aircraft service was set in competition and also assessed against a public sector comparator before the contract was let in March 2008. Nevertheless, because I understand the concerns about the use of PFI for military procurement, I commissioned a thorough, independent review of the contract, which concluded that there was now no persuasive value-for-money case for pursuing an alternative mechanism to secure this urgently needed capability.

I thank the Minister for that reply. This is but one of many apparently wasteful and expensive private finance initiative projects within the Ministry of Defence—including, most recently, dog kennels at the Defence Animal Centre that are reported to cost more than rooms at the Park Lane Hilton hotel. Does the Minister think there is a case for taking a very detailed look at the MOD’s PFI contracts to lower their cost and improve value for money to the taxpayer?

I agree with my hon. Friend and I am glad to say that a lot of work is being done within the work strands on renegotiation of PFI contracts. Three operational PFI projects have been selected and the pilot phase has commenced with the aim of making savings as part of the renegotiation process. The three projects are the Corsham development, Main Building redevelopment and the defence sixth form college. We expect to have the potential savings identified by the end of March.

Does the Minister accept that the AirTanker project secures tens of thousands of jobs in the UK and was the best option in comparison with the more expensive and sub-standard option put forward by Boeing?

I am quite clear that the AirTanker will be an outstanding aircraft and do its job very well. It is urgently needed to repair a fragile air bridge and perform its main function of in-air refuelling as well. I understand, however, the hon. Gentleman’s point of view.