HC Deb 13 June 1989 vol 154 cc692-3
10. Mr. Stevens

To ask the Secretary of State for Defence what his Department has achieved since 1979 in cost-effectiveness.

Mr. Sainsbury

Since 1979, my Department has significantly reduced manpower numbers and the size of the defence estate and has launched a range of other initiatives aimed at improving cost-effectiveness. These have included a greater use of competition in the procurement of defence equipment, an extensive programme of contracting out support services, and a wide range of efficiency studies, including some 20 efficiency unit scrutinies. The Department is currently engaged in an exercise to achieve a cumulative improvement in efficiency of 2.5 per cent. per annum during the three years ending in March 1991.

Mr. Stevens

I am grateful to my hon. Friend for his reply. One of the impacts of the Ministry of Defence's procedure has been to bring a great many more companies on to the defence list of contractors. That has been particularly helpful in areas such as the west midlands, especially to smaller companies to which special priority has been given by the Ministry of Defence. Can my hon. Friend say a little more about the impact of these value-for-money programmes on the effectiveness of his Department?

Mr. Sainsbury

I am happy to confirm what my hon. Friend says about the value that we attach to ensuring that we have as many contractors as possible on our suppliers' list, particularly small contractors. We are continuing with the programme of presentations and publicity to suppliers to encourage them to come forward and tender for Ministry of Defence business.

Mr. Tony Banks

The Minister's first reply was a lot of old bull—[Interruption.] It is absolute bull.

Mr. Speaker

Order. That is not a very elegant word.

Mr. Banks

I am not a very elegant person—[Interruption.] Tory Members should sit down and take it. When will the Minister do something about the hoarding of land by the Ministry of Defence and all those empty properties? By what right can the Government possibly attack local authorities for having empty properties when his Department has more empty properties than any other Department? When will the Minister do something about that?

Mr. Sainsbury

I am sorry that the hon. Gentleman, who is known for his interest in the arts, clearly does not have much interest in mathematics as an efficiency saving of 2.5 per cent. per annum is clearly too much for him to comprehend. There has been reference to the Department's slowness in disposing of surplus land and I cannot pretend that it has been a perfect performance in the past. The report to which he refers recognises that measures are beng taken to improve performance in future.

Mr. Conway

Is not my hon. Friend's attitude towards cost-effectiveness in procurement ably demonstrated by the Government's support for the Vickers option for the next generation of main battle tanks, which includes the engine manufactured in Shrewsbury by Perkins, which uses 50 per cent. of the fuel of any of its main competitors? Does not that determination to support British engineering at its most able demonstrate the Government's loyalty to British engineering and to cost-effectiveness?

Mr. Sainsbury

I am happy to confirm to my hon. Friend that cost in use through life cost is a very important part of the assessments we make in taking procurement decisions. Fuel efficiency is one of the factors to which we give high priority in taking those decisions.

Mr. Rogers

Part of the Government's justification for the cancellation of Nimrod was the promise of a 100 per cent. offset deal. It is now 130 per cent., but it was 100 per cent. at the time. Perhaps the Secretary of State could check that. In view of the very limited amount of offset work that hat been received and is outlined in the third report of the Defence Committee, does the Minister now think that the cancellation of Nimrod was cost-effective?

Mr. Sainsbury

I am sorry that the Opposition are having such difficulty with their mathematics. The figure is 130 per cent., not 100 per cent. I refer the hon. Gentleman to the third report which is rather complimentary to the programme, including the statement in paragraph 67: Boeing have expressed full commitment to the offset programme; and, extrapolating figures so far available, they may well meet their offset obligation by 1995.