My right honourable friend the Minister of State for the Armed Forces (Adam Ingram) has made the following Written Ministerial Statement.

On 3 July 2006 (Official Report, cols. 27-8 WS) my right honourable friend the Secretary of State announced the decision in principle to approve proposals to co-locate elements of the Defence Logistics Organisation (DLO) with the Defence Procurement Agency (DPA) in the Bristol/Bath area. He also announced that he had accepted in principle the recommendations of the Enabling Acquisition Change report. These were both subject to subsequent consultation with the trade unions.

The department entered into the formal consultation period immediately after the announcement. I and my ministerial colleagues met with trade union representatives over the summer to discuss their views on the proposals during this time. The formal consultation period has now closed, although we remain committed to trade union engagement throughout the next stages of both projects.

After careful consideration, and taking full account of the points raised by the trade unions, I have decided to proceed with implementing the co-location proposals. I announced this final decision on 29 September 2006 and am updating the House now at the earliest opportunity after the parliamentary Summer Recess.

We will now move into the implementation and assessment phase of the project that will include the moves from Andover and Telford, the tendering process for the development of the new site in Bristol and introducing flexible working arrangements at various sites. We expect to have completed the co-location process by 2011.

Co-location planning has, however, been adjusted in two respects since the 3 July announcement. There will now be no moves from Sapphire House, Telford, before March 2008, although the closure date of 2009 remains. It is also now likely that some current activity will be retained at RAF Wyton instead of moving to main operating bases. This does not alter plans to move about 500 acquisition-focused posts to the Bath/Bristol area in subsequent phases of the project that will also include the withdrawal from Caversfield in 2009-10.

I appreciate that this decision on the way forward for the co-location project will have consequences for MoD employees and their families, particularly in current DLO sites where we will be scaling down our presence or withdrawing altogether. The department will work to mitigate this effect by providing appropriate support for those affected by the outcome of these necessary changes.

The Enabling Acquisition Change report also made a series of recommendations intended to improve the MoD's ability to undertake through-life capability management. Consultation with the trade unions on the recommendations of the report has also concluded. One of the recommendations in the report was to merge the DPA and DLO from 1 April 2007. It has now been decided that the merged organisation will be called Defence Equipment and Support and on formation it will be led by General Sir Kevin O'Donoghue as the first Chief of Defence Materiel.

These decisions will mean that in the future we will have one single, co-located organisation responsible for the procurement, maintenance and sustainment of military capability. This will provide a greater unity of purpose in acquisition, facilitate better decision making in the early stages of acquisition and effectively manage military capability through life. I am confident that this is the right way forward for defence as a whole and will improve the support we give to our Armed Forces.