Procurement Executive (Hansard, 11 January 1996)

§ Mr. Arbuthnot

The estimated works cost of the Abbey Wood development, inclusive of site acquisition, construction, fitting out, professional works management fees and VAT, is £254.1 million at 1993 prices—£273.4 million at 1995 prices. Expenditure on works is estimated to be complete by the financial year 1998–99, allowing for the payment of retentions covering warranty and defect liability periods. The associated direct relocation cost, inclusive of staff relocation costs, removals, recommissioning of transferred IT systems and buy-out of London weighting allowance, is estimated at £79.8 million at 1993 prices—£.85.5 million at 1995 prices—with the bulk of expenditure estimated to be completed by the financial year 2000–01 allowing for detached duty and housing cost allowances.

315W

The net savings to the defence budget supported by the establishment of the new headquarters at Abbey Wood, Bristol for the Procurement Executive on completion of collocation are estimated at £86 million at 1993 prices—£92 million at 1995 prices—in the financial year 1997–98 rising to £105 million at 1993 prices, £113 million at 1995 prices, by the financial year 2004–05, and continuing annually thereafter.

When other exchequer costs and benefits are taken into account, and subject to finalisation of plans for the re-use or disposal of existing accommodation, the Department estimates the net savings to public expenditure are estimated at £67 million at 1993 prices—£72 million at 1995 prices—in the financial year 1997–98 rising to £94 million at 1993 prices, £101 million at 1995 prices, by the financial year 2004–05, and continuing annually thereafter.

Post project evaluation will be carried out by early 1997 to assess the extent to which estimated savings are being achieved.