§ Mr. FatchettTo ask the Secretary of State for Defence, pursuant to his answer of 5 December,Official Report, column 108, what was the basis on which he calculated annual savings arising from the market testing of health provision for British forces.
§ Mr. SoamesThe level of savings arising from exposing an activity to competition will depend upon the outcome of the exercise to test the efficiency of in-house services and functions against tenders from outside contractors. In the case of health provision for the armed forces, many of the support activities which make up the service are still the subject of feasibility studies to determine objectives, priorities and optimum savings routes. Experience has shown that for departmental purposes, a savings target of at least 15 per cent. of the annual operating cost should be assumed to flow from the exposure of an activity to competitive pressures, but the final savings achieved will depend on the outcome of the market-testing exercise itself, and in many cases will be considerably higher.
§ Mr. MilburnTo ask the Secretary of State for Defence if he will list those services that have been market-tested by his Department and won by the private sector, indicating the organisation that won the tender and its value.
§ Mr. FreemanIn the 30-month period up to September 1994, the Ministry of Defence examined 82 support activities with annual operating costs in the order of £600 million under the Department's "Competing for Quality" programme, which included market-testing activities. This resulted in contracts being placed with the private sector for 46 of these activities covering over two thirds of the total annual operating costs. Full details of individual contracts remain commercial-in-confidence, although some information on contracts awarded as a result of market tests is published monthly in the "Market Testing Bulletin" available from the House of Commons Library.