Non-nuclear Research Establishments (Hansard, 26 March 1991)

§ Mr. Tom King

I am pleased to announce the creation of the Defence Research Agency which will be vested as an executive agency on 1 April this year. The agency will comprise the four main non-nuclear research establishments, the Admiralty Research Establishment, the Royal Aerospace Establishment, the Royal Armament Research and Development Establishment, and the Royal Signals and Radar Establishment.

The Defence Research Agency—DRA—will provide the expert scientific and technical services required of it primarily by the MOD but also other Government Departments, in a way which is cost-effective and where necessary impartial; in support of this, the DRA is also encouraged to provide services to non-Exchequer customers. The DRA will continue to represent Her Majesty's Government in its participation in international and collaborative activities.

An open competition has been mounted to select and appoint a chief executive for the next three to five years; the outcome should be determined by early May. Meanwhile Mr. Nigel Hughes, now chief executive (designate), will act as chief executive from 1 April.

The chief executive will have the financial and personnel powers which are set out in the agency's published framework document, copies of which will be placed in the Library shortly. Where hon. or right hon. Members have queries on matters relating to the operation of the Defence Research Agency I hope they will write in the first instance to the chief executive. I will continue to deal with questions of policy.

I will be setting the agency a range of targets to ensure that it delivers progressive improvements in the quality and efficiency of the services it supplies to its customers. The initial targets I have set for the Defence Research Agency during the period 1991–96 are:

(a) to achieve efficiency improvements of an average of 2½ per cent. per annum over the next five years, by delivering a saving of £10 million in 1991–92 and a reduction of an average of 2½ per cent. per annum in terms of full cost per chargeable hour in the following four years;
(b) to develop in 1991–92 a programme for asset rationalisation against which targets will be set for the following years;
to improve asset utilisation, defined as the ratio of turnover to average fixed assets, including those leased; and
to reduce the total value of fixed assets employed in the business in accordance with the programme by a combination of rationalisation and reduced leasing;
(c) to keep within the budget agreed for the DRA;
(d) to complete 80 per cent. of orders and contracts due for completion during the review period and valued at more than £5 million, within budget, taking account of any negotiated changes, and to increase this proportion to 90 per cent. by the end of 1995–96;
(e) within orders and contracts, to achieve 50 per cent. of milestones within plus or minus one month, and increase this by 5 per cent. per annum over five years;
(f) to improve the perceived quality of service to customers, as indicated by annual customer satisfaction surveys;
(g) to enhance existing management information systems, and to develop and implement an internal output and performance measurement system by October 1991;
(h) to introduce a commercial accounting system by 1 October 1991, to train 70 per cent. of potential users of the system by the same date, and complete initial training of all staff who need to use it by 1 April 1992; and
(j) to introduce arrangements from 1 October 1991 to give MOD customers information on the cost and quality of work done for them by the DRA to support a tautened customer/supplier relationship and to prepare progressively for subsequent trading fund operation.

I wish the chief executive and his staff every success for the future in meeting their objectives of providing greater quality of service and better value for money.