§ Harry CohenTo ask the Secretary of State for Defence if he will amend the means by which charges for services provided by the Defence Export Services Organisation are calculated to ensure that the full cost is recovered. [2709]
§ Dr. MoonieThe policy of the Defence Export Services Organisation (DESO) is to raise charges against industry for activities undertaken on its behalf where Government independence from industry is not essential and when costs can be directly identified, calculated and recovered from individual companies. On this basis charges are raised for a proportion of the costs of demonstrations of defence equipment; market research and publications; DESO symposia and seminars; and inward visits.
In addition, the full costs of operating project offices in support of Government-to-Government sales are offset by receipts from customer Governments. In 2000–01 DESO's costs were as follows:
£ million Expenditure 56.01 Receipts 41.68 Net Operating Costs 12.36 These net operating costs are more than offset by benefits to the Defence budget, estimated at over £400 million a year, arising from DESO's activities. These benefits include reductions in overhead costs for UK Procurement as a result of longer production runs, receipts from Commercial Exploitation Levy and disposal of surplus MOD equipment. Against this background, there are no plans to amend the charging policy for services provided by DESO.