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Volume 580: debated on Monday 12 May 2014

13. What progress he has made on improving the efficacy of his Department’s procurement since May 2010. (903955)

When we came into office, the major projects report for 2009 identified procurement overruns of £1.2 billion and delays of 93 months in the top 15 defence equipment programmes, after 13 years’ of inaction by Labour. By contrast, we have taken decisive action and made considerable progress in improving the efficacy of defence procurement. The latest major projects report from the National Audit Office for 2013 showed that the cost of 10 of our 11 largest equipment programmes had been reduced by almost £50 million in the last year, and some 98% of our key performance measures are set to be achieved.

In December, as the Government abandoned the process to find an external contractor to manage Defence Equipment and Support procurement—the so-called GoCo approach—the Secretary of State said that the Bechtel bid in particular had contained knowledge capital which would be useful going forward. Can the Minister confirm that this has happened and that best practice is being assimilated?

On 1 April we established DE&S as the first bespoke Government trading entity with wide ranging freedoms from central Government controls, details of which I look forward to publishing before the House prorogues. We are introducing global best practice to the new DE&S through three work package contracts for managed service providers. We are today issuing the invitation to negotiate for the first work package for project delivery to eight world-class companies which have passed the pre-qualification questionnaire process, and we plan to award contracts for the four domains this autumn.

25. I congratulate the Minister unreservedly on winning these freedoms for DE&S. In the absence of a proper contract with a contractor, how can he maintain his opposition to the Treasury’s natural instincts to abhor freedom and seize back power to itself and the centre? (903967)

I applaud my hon. Friend for the pioneering work he did in helping us take this reform of DE&S through. We are convinced that the work that we are doing in the new bespoke trading entity will bring significant benefits to defence procurement for the long term, but as he knows, we have retained in the Defence Reform Bill, which should shortly receive Royal Assent, the power for a future Government to introduce a GoCo, with suitable parliamentary scrutiny, should this be necessary to transform DE&S further in the years to come.