Defence Procurement (Hansard, 3 April 1990)

§ 7. Mr. Duffy
To ask the Secretary of State for Defence what changes he is undertaking in defence procurement policy in the light of recent reports by the Public Accounts Committee and National Audit Office.

§ Mr. Alan Clark
I am satisfied that the existing policy of competition and a taut commercial approach to contracting will continue to give us value for money.

§ Mr. Duffy
Despite the Minister's satisfaction, will he confirm that the development of new weapons has brought about overspending of nearly £2 billion and that nine contracts worth £4 billion will be delivered up to five years' 1022 late? Yet the Secretary of State for Defence assured the House in paragraph 302 of the "Statement on the Defence Estimates" that the policy pursued in recent years to provide for defence procurement on a cost-effective basis will be continued.

§ Mr. Clark
Many wild figures are circulating and the £2 billion which the hon. Gentleman quoted was the figure given in an article by a Mr. David Hencke in The Guardian. Mr. Hencke formerly styled himself as social affairs correspondent, so I suppose that we should make allowances for any difficulties he may get into when he treads in the more complex world of defence procurement. However, there is no justification for throwing around figures of that size which do not make allowance for inflation.
The report of the Comptroller and Auditor General stated: None of the projects entering the statement for the first time in 1988 showed a variation in projected spend of 10 per cent. or more … The detrimental effects of older contracts would continue to be felt for some time". However, the Comptroller and Auditor General said that he expected to see the benefits of the Department's current procurement practice clearly reflected in future major project statements.

§ Mr. Batiste
Does my hon. Friend agree that the changes which the Government have introduced in defence procurement over many years have resulted in better equipment, better value for money and better export potential? In that context, will he confirm that Vickers has now submitted the details of the second milestone test for the Challenger 2 tank? When will he be able to make an announcement about that?

§ Mr. Clark
I shall be going to Vickers in the near future, and I expect that we shall have all the data we need to bring it forward in September.

§ Mr. Rogers
The Minister is grossly unfair in his answer to my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy). The newspaper reporter did not concoct the figures in the article—they came from information provided by the National Audit Office and the Public Accounts Committee.
The Government have been in office for almost 11 years and they like to promote an image of efficiency and good management, yet one after another the procurement disasters continue to occur—Foxhunter, DROPS, ALARM, Tucano—with billions of pounds wasted. When will the Government acknowledge their incompetence and sack the chief of the Procurement Executive?

§ Mr. Clark
I understand why the hon. Gentleman fails to mention any programmes that are effective and efficient and which run to time and to cost—Warrior and Skyguard are good examples. The hon. Gentleman will know, as will the hon. Member for Sheffield, Attercliffe (Mr Duffy), with his ministerial experience—that cost overruns are endemic to major weapons procurement, for the very good reason that throughout the development and production stages we have to take account of changes and progress in enemy systems and in counter-measures. It is not like a contract for a million pairs of boots; it is a race in which the parameters are constantly moving as technology advances.