Army Engineer Resources (Hansard, 20 November 1997)

§ Lord Hoyle

The previous administration announced in August 1995 that the Army Engineer Resources organisation, based at Long Marston in Warwickshire, would collocate with another Royal Engineers organisation—the Military Work Force—on a single site at Chilwell, near Nottingham. A number of subsequent developments have led to a review of this decision.

In order to ensure that the Engineer Resources organisation was configured in the most efficient way for the transfer to Chilwell and subsequent market testing, a comprehensive business review of this organisation was carried out. This concluded that many of the Engineer tasks—notably storage, provisioning and repair—could be carried out more efficiently by other parts of the Army support organisation, for which they are core business.

In parallel, further work was undertaken on the Army's overall storage requirement. The Storage Rationalisation Study, about which we made a separate announcement on 13 November 1997, (Official Report, col. WA 44), concluded that the Army Base Storage and Distribution Agency had sufficient space to absorb the Engineer Resources storage task. In the light of this work, an investment appraisal has been carried out which has demonstrated that disaggregation of the Engineer Resources task is substantially more cost effective by some 15 per cent. (approximately £21 million over 25 years in net present value terms) than any option for collocation at Chilwell.

Obtaining greater efficiency from Defence spending is a central part of the Strategic Defence Review. All support activities are being rigorously scrutinised against the benchmark of value for money and the need to ensure that we retain only those assets which are essential for Defence needs. We have, therefore, accepted, as the basis for consultation, a recommendation to proceed with the disaggregation of the Engineer Resources tasks to other service providers. Long Marston will close by December 1999. Final decisions will be taken in the light of representations made during the consultation period. A copy of the consultative document is being placed in the Library of the House.

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