HC Deb 07 March 2000 vol 345 cc635-6W
Mr. Menzies Campbell

To ask the Secretary of State for Defence if he will list(a) those targets of the Defence Sales Agency for 1998–99 which (i) were and (ii) were not achieved, giving the factors affecting the outcome in each case and (b) action taken by the agency to improve target achievement performance in 1999–2000; and if he will make a statement. [111770]

Dr. Moonie

[holding answer 6 March 2000]This is a matter for the Chief Executive of the Defence Disposal Sales Agency. I have asked the Chief Executive to write to the "right" hon. and learned Member.

Letter from Mr. A. J. S. Taylor to Mr. Menzies Campbell, dated 7 March 2000: I am replying to your question to the Secretary of State for Defence about the Disposal Sales Agency's (DSA) targets for 1998/99 and 1999/2000 as this matter falls within my area of responsibility as Chief Executive of the DSA. The key targets for the financial year 1998/99 and the percentage achieved are listed as follows:

Key Target 1 To achieve disposal sales income of £30M from Government to Government sales of surplus capital equipment and stores-73% achieved.

Key Target 2 To achieve disposal sales income of £30M from commercial sales of MOD's surplus items—93% achieved.

Key Target 3 To extend the Agency's disposal services to other public sector organisations and to secure an additional £1M of sales income as a result—Achieved.

Key Target 4 To develop, contract for, and introduced new IT systems by 31 March 1999, taking account of the Year 2000 requirements for equipment and software—Achieved.

Key Target 5 To put in place the mechanisms fully to test the level of customer satisfaction for the Agency's services, and those services provided by its appointed contractors—Achieved.

Key Target 6 To reduce the unit cost of generating £1M of sales to £65,000 from a baseline figure of £90,500 achieved in 1994/95—Achieved.

Description 1998–99 target 1998–99 performance
Percentage improvement in SPS services identified by customers (baseline 1997) 20 20
Percentage of SPS reports delivered within agreed date 90 92.1
Percentage of Asset Accounting Centre (AAC) core accounts audited 96 97.6
Percentage of AAC major accounts audited 66 73.8
Percentage of Category A and B equipment projects for which cost forecasting advice will be available 93 96

In an increasingly competitive marketplace, which was subjected to shrinking national defence budgets, only a relatively few nations have a real interest in large second-hand capital equipment and therefore demand was not widespread. In 1998/99 the DSA operated in a depressed market particularly for major platform sales—this was not only in economic terms as sales opportunities had also been lost because of political events, changing operational requirements and security considerations outside the Agency's control or sphere of influence. Sales targets have traditionally been the major Key Targets of the Agency over the last 5 years. In that time the Agency has surpassed its targets by a 10% margin (£370M as compared to cumulative 5-year target of £335M). In year variances, however, do occur. Estimating sales receipts, based inevitably on limited and shifting information from the three Services, together with the sometimes incomplete conditional state of the surplus equipment when it is declared for sale and set against unknown market conditions is far from an exact science. The Key Targets for 1999/2000 are listed below:

Key Target 1 To achieve disposal sales income of £66M from sales of surplus Government owned equipment and stores.

Key Target 2 To reduce the unit cost of generating £1M of sales to £62,500 from a baseline of £90,500 achieved in 1994–95.

Key Target 3 To undertake customer satisfaction surveys designed to identify key issues and priorities, measure perceptions and expectations, and to communicate results and benefits of actions taken to the Agency's customer base. Further information on the DSA can be found in the DSA Annual Report and Accounts 1998/99, a copy of which was laid before the Houses on 22nd July 1999. Targets for performance for 1999/2000 were printed on 26th October 1999 (Official Report, columns 767/768).