§ Dr. SpinkTo ask the Secretary of State for Defence what plans he has to improve his Ministry's bill payment service for defence contractors; and if he will make a statement.
§ Mr. AitkenI am pleased to report that last month the Ministry of Defence accounts office in Liverpool introduced an improved bill payment service for defence contractors. This marks the achievement of one of the targets which was set when the Directorate General of Defence Accounts was launched as a defence support agency in April last year.
Under the new system, defence contractors have the opportunity to present their claims to the Liverpool office 335W every fortnight and payment is made directly to their bank accounts. Previously contractors were paid by cheque every four weeks.
Fortnightly billing started on 2 November, and already a total of almost 10,000 payments worth £750 million have been paid to 5,000 companies under the new arrangements. Next year the Ministry of Defence expects to pay over £12 billion to nearly 20,000 contractors.
The Government recognise the importance of healthy cash flow and have declared their intention to improve payment standards. I am sure that the new payment arrangements will be welcomed by the many thousands of contractors, including all those small businesses, who provide services to the Ministry of Defence, and who will no longer suffer the risk of delays in payment by cheque through the post.