§ Mr. Page
The property, rights and liabilities of that part of the United Kingdom Atomic Energy Authority known as AEA Technology were transferred to a separate company, AEA Technology plc, on 31 March. Corporate status gives AEA Technology a basis on which to build on the substantial progress it has made as a business over the last couple of years.
I have today written to Sir Anthony Cleaver, the chairman of AEA Technology plc, setting out his objectives for the period that the company is in public ownership. The text of my letter is as follows:I am writing to set out your objectives as Chairman of AEA Technology plc whilst the company is in public ownership.As you know, the Government intends to offer AEAT for sale as a single integrated business in the course of this year. No decisions have yet been taken about the method of sale.149WWhatever form it takes, I expect you and your Board to do everything possible to ensure that the sale is carried through successfully and secures maximum value for the taxpayer.The success of the sale depends critically on the performance of the business over the next few months. Since AEA Technology was set up in April 1994, substantial progress has been made in improving profitability, reducing costs and increasing responsiveness to customer concerns and requirements. Major changes have also been made to management systems, particularly financial systems, in order to improve the quality and timeliness of management information. The progress which has been made is a tribute to the efforts of both mismanagement and staff but it needs to be sustained. I look to you to ensure that it is sustained. In particular, the company should continue:
- (a) to promote the growth of its business with the UK private sector and in overseas markets.
- (b) to bear down on overheads, increase operational efficiency and ensure that the financial and other information available to management fully meets their perceived needs.
- (c) to improve the quality of service available to customers; and
- (d) progressively to increase profitability and its rate of return on capital employed.The company has gone through a period of extensive restructuring over the last two years. When complete, this will result in a more coherent, lower cost business better focused on the needs and requirements of its customers. You should, however, continue to keep the structure of the company under review and be ready to make any further organisational or management changes which might be necessary to maintain or increase its competitiveness and achieve commercial success.More generally, AEA Technology can help improve UK competitiveness through collaboration with other UK companies in home and overseas markets. I look to you to ensure that opportunities for mutually beneficial collaboration are exploited wherever possible. You should also ensure that AEA Technology's dealings with UKAEA are carried out on an appropriate commercial basis.AEA Technology is predominantly a people business. You should therefore ensure that you have effective arrangements in place to incentivise management and staff and to encourage commitment to, and personal identification with, the commercial objectives of the company.Within the framework of the company's Business Plan, you should ensure that AEAT explores all options for exploiting its technology, including collaboration with other organisations where this is commercially justified.You should ensure that AEAT continues to have arrangements which secure at all times the highest practicable standards of safety in all its activities and that all relevant regulatory and security requirements are met.You should ensure that the company complies fully with the requirements of the Cadbury code on corporate governance and conducts its affairs in a manner consistent with the principles of financial propriety and regularity applicable to a public sector body.Where appropriate, specific targets in support of those aims and objectives will be set from time to time in consultation with you. I expect you to provide regular reports on progress against these targets and, more generally, on the company's performance and preparations for privatisation.