HC Deb 06 July 1999 vol 334 cc426-30W
Mr. Key

To ask the Secretary of state for Defence if he will list cost-benefit analyses carried out in connection with his proposal for a Public Private Partnership for the Defence Evaluation and Research Agency, [89202]

Mr. Spellar

[holding answer 5 July 1999]: The study team's primary objective was to find a long-term solution for the future of DERA which would provide MOD with the scientific services it will continue to need. These were defined by the "MOD Customer Needs Statement" as laid down in Figure 1 of the Consultation Document and were used as option evaluation criteria throughout the study,to identify both the benefits and risks of each option.

A financial model, supported by some analytical work,was used to asses each option against the financial objectives.

The three requirements shown at Paragraph 13 of the consultation document, "capability", "financial" and "wider issues", were judged to be interdependent. MOD did not assign quantitative weightings between them. Although no formal cost-benefit analysis is available, iterative judgments were made throughout the options process on the relative benefits, risks and costs of each option.

Mr. Key

To ask the Secretary of State for Defence under his Public Private Partnership proposals for DERA, if, when property is transferred to a new private sector owner, his Department retains liability for clearing contaminated land and unexploded ordnance. [89195]

Mr. Spellar

[holding answer 5 July 1999]: No decisions have been made on the nature of a Public Private Partnership, PPP, for DERA, and it is too early to speculate on the precise form it would take. The MOD study team is supported by legal experts who provide advice on a range of legal and commercial issues, including the future treatment of liabilities. The details have not yet been addressed as they will depend on the precise nature of the PPP. During implementation, further work would be required on the negotiation of such liabilities between MOD and DERA.

Mr. Key

To ask the Secretary of State for Defence in what ways DERA's relationships with the Research Councils will be affected by his public private partnership proposals for DERA.[89197]

Mr. Spellar

[holding answer 5 July 1999]: The MOD strives to develop and maintain close working relationships with all relevant scientific and research bodies, including the Research Councils. DERA's main relationship with the Research Councils arises through the operation of the Joint Grants Scheme, JGS, whereby the Ministry of Defence part funds research which has some direct defence relevance.

No decisions have been made on the form of a public private partnership, PPP, for DERA, and it is too early to speculate on the precise form it would take. Whatever the form, the importance of maintaining effective relationships with the Research Councils will be taken into consideration.

Mr. Key

To ask the Secretary of State for Defence under his public private partnership proposals for DERA, if DERA will lose Crown immunity. [89198]

Mr. Spellar

[holding answer 5 July 1999]: No decisions have been made on the nature of a public private partnership, PPP, for DERA, and it is too early to speculate on the precise form it would take. The MOD study team is supported by legal experts who provide advice on a range of legal and commercial issues which may affect the PPP. This includes the subject of Crown immunity. While further analysis would be required during the implementation phase, the basic premise is that Crown immunity would cease to apply in the event that assets, facilities and employees were transferred out of the direct control of the Crown.

Mr. Key

To ask the Secretary of State for Defence under his public private partnership proposals for DERA, if liability for insurance cover against catastrophic accident will be transferred to private sector partners from his Department. [89199]

Mr. Spellar

[holding answer 5 July 1999]: No decisions have been made on the nature of a public private partnership, PPP, for DERA, and it is too early to speculate on the precise form it would take. However, the apportionment of risk between a PPP DERA and the MOD, including the handling of liability for catastrophic accident, is an important issue. During the implementation phase, these and other legal and commercial considerations will be addressed in detail by the MOD study team and their advisers, in consultation with DERA and key stakeholders.

Mr. Key

To ask the Secretary of State for Defence under his Public Private Partnership proposals for DERA, if Boscombe Down airfield will be upgraded to civil airfield standards; and at what cost. [89200]

Mr. Spellar

[holding answer 5 July 1999]No decisions have been made on the nature of a Public Private Partnership, PPP, for DERA, and it is too early to speculate on the precise form it would take. In the proposal outlined in the consultation document, the aircraft test and evaluation activities at Boscombe Down would form part of the PPP, operating in the private sector, with implications for the licensing of the airfield. Further work would be required on the detailed aspects of this during implementation.

Mr. Key

To ask the Secretary of State for Defence what were the terms of risk analyses and the risk assessments carried out on his proposals for a Public Private Partnership for DERA. [89201]

Mr. Spellar

[holding answer 5 July 1999]: The study team's primary objective was to find a long term value for money solution for the future of DERA which would provide MOD with the scientific services it will continue to need. These were defined by the "MOD Customer Needs Statement" as laid down in Figure 1 of the Consultation Document. These are being used as option evaluation criteria in the study, to identify both the benefits and risks of each option. Risks to achievement of financial objectives and compatibility with wider MOD and UK interests are also being addressed.

Mr. Key

To ask the Secretary of State for Defence what assessment he has made of the impact of his proposals for a Public Private Partnership for the Defence Evaluation and Research Agency on his smart procurement initiative; and if he will make a statement. [89203]

Mr. Spellar

[holding answer 5 July 1999]: Throughout the DERA PPP study, the MOD study team has had frequent discussions with the Department of Trade and Industry and UK industry as well as the MOD Smart Procurement Initiative implementation team, to ensure that the DERA PPP and Smart Procurement projects complement one another.

Our consultation process, announced on 5 May 1999, Official Report, columns 384–85, has included significant debate with industry over the way a DERA PPP would function in the Smart Procurement environment. We have had many constructive responses and discussions. Although it is too early to summarise the outcome of the consultation, these views will be reflected in the study team's final recommendation, along with a view on how DERA will operate with the Smart Procurement Initiative.

Mr. Fallon

To ask the Secretary of State for Defence if he is conducting a full economic appraisal of the proposals for the DERA public private partnership; and if he will place the results of his appraisal in the Library. [89027]

Mr. George Robertson

[holding answer 29 June 1999]: During the DERA PPP options study, the MOD study team paid much attention to assessing the long term financial benefits of each option. However, in choosing between options, the evaluation process addressed not just financial issues, but also each option's ability to deliver top quality scientific and technical capability to meet future defence needs and to complement wider MOD and Government policy. There is no specific stand-alone economic appraisal suitable for the Library.

Mr. Fallon

To ask the Secretary of State for Defence if he will announce a decision on the DERA public private partnership proposals before the summer recess. [89029]

Mr. George Robertson

[holding answer 29 June 1999]: Our formal consultation period is now drawing to a close and the study team is analysing the responses received. The consultation process has highlighted the complexity of some of the issues involved, and, on the recommendation of the study team, we have agreed that further analysis and discussions with key stakeholder groups are required. We do not expect a final recommendation from the team before the summer recess.

Mr. Key

To ask the Secretary of State for Defence if he will list the location and size of common land owned by DERA.[89196]

Mr. Spellar

[holding answer 5 July 1999]: This is a matter for the Chief Executive of the Defence Evaluation and Research Agency. I have asked the Chief Executive to write to the hon. Member.

Letter from Sir John Chisholm to Mr. Robert Key, dated 6 July 1999: As Chief Executive of the Defence Evaluation and Research Agency (DERA), I have been asked to reply to your question about the location and size of common land owned by DERA. I am afraid that we do not hold this information ourselves, nor is it held centrally by Defence Estates (DE). The official Register of Common Land is kept by the County Councils or Unitary Authorities. Copy title deeds are actually held at 8 regional DE offices and the Head Office. Enquiries to the regional offices have not identified common land within the estate vested in DERA, though this preliminary search cannot be considered exhaustive. I am sorry that I cannot be more helpful on this occasion.

Mr. Key

To ask the Secretary of State for Defence what is(a) the current asset value of and (b) the revenue stream derived in the last financial year from, the intellectual property rights of the Defence Evaluation and Research Agency.[89204]

Mr. Spellar

[holding answer 5 July 1999]: This is a matter for the Chief Executive of the Defence Evaluation and Research Agency. I have asked the Chief Executive to write to the hon. Member.

Letter from Sir John Chisholm to Mr. Robert Key, dated 6 July 1999: As Chief Executive of the Defence Evaluation and Research Agency (DERA), I have been asked to reply to your questions about intellectual property rights. You asked for the current asset value of the intellectual property rights of DERA. Prediction of intellectual property is unreliable due to uncertainty over the industrial implementation of inventions and the arrival of competing technologies as well as general economic uncertainty. Because of these sources of uncertainty, the Agency has reviewed its accounting policies in the context of recent changes in the guidance on best practice and no longer allocates a capital value to its intellectual property. Accordingly, the balance sheet for the year ending 31 March 1999 shows a zero value for intangible fixed assets (effectively intellectual property). This is, of course, an accounting convention and does not reflect the open market value of DERA's intellectual property which cannot be precisely defined except by an actual sale following a process of due diligence by prospective buyers. Your second question asked about the revenue stream derived in the last financial year for the intellectual property rights of DERA. The financial statements for the year ending 31 March 1999 are currently being finalised but we expect to report non-Exchequer royalty income in the order of £6M. I hope that this information is helpful.

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