§ Mr. David ShawTo ask the Secretary of State for Defence if he will make a statement on the achievements of his Department and his policies in helping small businesses over the last 12 months compared with the previous 12 months; and if he will publish the performance indicators by which his Department monitors those achievements and the statistical results of such monitoring.
§ Mr. SainsburyTo assist in obtaining better value for money, the Ministry of Defence has implemented a number of measures to broaden its competitive base. To encourage competition at both prime and sub-contract levels, opportunities for defence contracts have been advertised in the MODContracts Bulletin since 1986. To 561W encourage small firms in particular to compete for our business in November 1986 my noble Friend the Minister of State for Defence Procurement launched a small firms initiative.
In 1986–87, some 4,000 small firms secured direct defence business in excess of £1,000 million. In the same period some 500 small firms sought advice from the newly formed small firms advice division. During 1987–88, a further 1,500 small firms approached the division for guidance. The division conducted 40 seminars throughout the country, at which some 2,000 small firms were represented, to explain MOD's procurement policies and to encourage the firms to compete for our business. Many more firms made contact at the 25 business exhibitions in which the division participated.
The division is also responsible for producing the booklet "Selling to the MOD" which offers useful guidance on MOD's procurement policies and procedures and also provides a comprehensive network of contact points. The third edition of the booklet was published in 1987 and a fourth will be published later this year.
A separate strand of the initiative, the small firms research initiative, is aimed at enabling innovative small firms to obtain a greater share of Defence research funding. In 1987–88 funding of about £1 million was made available; a similar sum is being made available for the current financial year.
The initiative is designed to produce long-term benefits, but the early results are already very encouraging. A recent survey of 850 small firms which had approached the small firms advice division indicated a high level of customer satisfaction. Moreover, some 10 per cent. of firms responding to the survey actually secured defence business. There has also been a 45 per cent. increase in the number of firms added to the defence contractors list, MOD's register of potential suppliers. Of over 700 new additions during 1987, over 300 were small firms. We shall continue to monitor the response of small firms to the initiative and the contribution towards better value for money.