Defence Evaluation and Research Agency (Hansard, 22 June 2000)

Mr. Robertson
To ask the Secretary of State for Defence if he will make a statement on the type of projects which(a) New DERA and (b) Retained DERA will undertake following the division of the organisation. [126937]

§ Mr. Hoon
I refer the hon. Member to the answer I gave my hon. Friend for Huddersfield (Mr. Sheerman) on 17 April 2000,Official Report, columns 366–67W, which outlined our proposals for the DERA public private partnership. These are described in more detail in the consultation document, a copy of which can be found in the Library of the House and on the internet at www.mod.uk/commercial/ppp/dera/.
Under our current proposals, we envisage that New DERA would continue to provide similar service to the Ministry of Defence (MOD) and other customers, working on a wide range of scientific and technical projects, providing advice, problem-solving, consulting, engineering and research services. It would, however, have much greater freedom to exploit its technology into broader markets, which in turn will have knock-on benefits for its core military business.
RDERA will focus on activities that must be carried out in government plus it will support MOD in its Department of State functions. It will ensure that MOD has an impartial source of advice and systems research capability, providing high level assessment, integration and management of the research programme and international research collaboration. This will include, for example, continued development of MOD's protection measures against chemical and biological weapons and the maintenance and employment of operational analysis models used to underpin policy, operational concept and procurement decisions.

Mr. Robertson
To ask the Secretary of State for Defence what measures he will take to ensure that at both Retained DERA and New DERA there is no diminution in(a) the scientific qualifications of staff and (b) the ability to provide impartial advice, once DERA is divided. [126931]

§ Mr. Hoon
I refer the hon. Member to the answer I have given to his earlier question on the DERA PPP project, in which I have outlined our proposals for the future of DERA.

(a) Under our preferred option, Core Competence, RDERA will focus on those activities that must be carried out by Government and to do so, we will need to retain those staff with the necessary expertise and qualifications to meet this role. The existing excellent system for recruiting, training and developing staff will be combined with a healthy interchange with industry, including NewDERA, and academia to give staff the opportunity for full and rewarding careers. Similarly, 240W NewDERA will move into the private sector with the appropriate staff to maintain and, hopefully, develop its capabilities. NewDERA will have the freedom to attract and reward the best qualified staff to take it forward as a leading research and technology organisation.

(b) NewDERA will remain a significant supplier of science and technology to the Ministry of Defence (MOD) for the foreseeable future. Consequently we will be putting into place measures to ensure that it continues to be an organisation with which MOD customers are happy to do business. NewDERA itself will be keen to satisfy the needs of MOD, which will continue to be its most important single customer. The provision of high quality, impartial and high integrity advice and services will be at the heart of its business for all customers, including MOD. The proposed constraints described in the consultation document, which include features such as a special share, approval of Directors and contractual constraints, have been designed to provide a balance between allowing NewDERA the freedoms it needs to grow in the private sector and ensuring that access is preserved to those capabilities needed for the effective operation of our armed forces.

Mr. Robertson
To ask the Secretary of State for Defence if he will make a statement on the expected relationship between Retained DERA and New DERA. [126933]

§ Mr. Hoon
I refer the hon. Member to the answer I have given to his earlier question on the DERA PPP project, in which I have outlined our proposals for the future of DERA.
Under our preferred option, Core Competence, we expect that once bedded down, the relationship between New DERA and RDERA will be the same as the relationship between any private sector company and their main customer.
Contractual frameworks will naturally need to be established to govern relationships between RDERA and New DERA to reflect the changes brought about by the PPP. But this is no different from relationships that currently exist between the Ministry of Defence (MOD) and other private sector organisations. MOD through RDERA would take the lead on all Government to Government collaborations and where necessary, and with the agreement of the other Government or Governments involved, RDERA would sub-contract elements of the programme to New DERA.

§ Mr. Gerald Howarth
To ask the Secretary of State for Defence what assessment he has made of the consequences for the development of future generations of military aero engines of the closure of DERA Ryestock's aero engine testing facilities. [127090]

§ Mr. Hoon
[holding answer 20 June 2000]On completion of the current engine programme for the Eurofighter project in 2002, there will be insufficient future work to justify the retention of the altitude test facilities at DERA Pyestock. There is no Ministry of Defence strategic requirement to retain the facilities. We are satisfied that there will be scope for engine suppliers to make appropriate alternative arrangements.

§ Mr. Gerald Howarth
To ask the Secretary of State for Defence what consultations his Department has had with the United States Government on the proposed reorganisation of DERA; what the most recent response of the US Government has been; and if he will make a statement. [127091]
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§ Mr. Hoon
[holding answer 20 June 2000]Following the announcement in 1998 of a public-private partnership (PPP) for the Defence Evaluation and Research Agency (DERA), consultation has been an important and regular feature of the process. We have consulted with a wide range of key stakeholders, including international collaborative partners. Last year's consultation exercise on a potential PPP solution produced valuable responses, which have informed the most recent phase of work. The current consultation exercise, which I announced on 17 April 2000,Official Report, columns 366–67W gave all stakeholders the opportunity to submit their views on our revised proposals for the DERA public-private partnership.
Consultation with the USA has concentrated on discussions between MOD officials and Ministers with counterparts in the US Administration, the DoD and other US authorities. As would be expected with such a complex and important process, senior officials have held numerous detailed discussions with their US counterparts. Although it is not practicable for us to keep records of all discussions that take place at senior official level, we can confirm that the Principal Finance Officer, the Chief Scientific Adviser, the Deputy Under Secretary for Science and Technology, the Deputy Chief of the Defence Staff for Equipment Capability and the Chief of Defence Procurement have all been in consultation with their US colleagues.
Since the consultation was extended, as announced on 26 October 1999, Official Report, column 768W, discussions at ministerial level are recorded as follows: Secretary of State for Defence, the right hon. Geoffrey Hoon, met the Hon. John Hamre, the Deputy Secretary of State for Defense 27–28 January 2000. Minister for Defence Procurement, Baroness Symons, met the following US representatives to discuss the DERA public-private partnership proposals: Dr. C. Dorman, the Chief Scientist of the Office of Naval Research (ONR), on 22 November 1999, in London. Hon. John Hamre, the then Deputy Secretary for Defense in Washington on 29 February 2000, and then again in London on 22 March 2000. Under Secretary of Defense (Acquisition and Technology) Jacques Gansler on 29 February, and then again on 22 and 23 May 2000. Rudy de Leon, the Deputy Secretary for Defense in Washington on 2 May 2000. Baroness Symons has also met senior National Security officials and had telephone conversations with John Hamre, and David Oliver, the Principal Deputy Under Secretary of Defense Acquisition and Technology, on this subject.
A team of UK Ministry of Defence officials led by the Director of the DERA Partnering Team, has completed a comprehensive series of briefings in the USA from 8 to 24 May 2000. This visit covered a wide range of US laboratories and sites as well as US officials from the US Department of Defense and the State Department.
Responses from the US and our other allies have been generally supportive of the Core Competence approach. They have made it clear that they wish to continue collaboration with the UK and see no reason why this should not be possible along the lines we are proposing. In common with all our collaborative partners, they have welcomed our willingness to listen to their views and engage in genuine consultation. Naturally, they have emphasised that they wish to ensure that government-only 242W information provided under existing arrangements and as part of future collaboration will be adequately protected. Following any decision to proceed with Core Competence we would obviously take forward detailed work on this issue.
The current consultation period ended on 9 June. I can assure the hon. Gentleman that views expressed will be taken into account before a final decision is made.