UK Ministry of Defence, Defence Minister Lord Drayson today welcomed a report by a committee of MPs into improvements MoD is making to the way it buys new equipment for the Armed Forces – but took issue with some comments in the committee's press notice regarding cost allocation.
Lord Drayson, Minister for Defence Equipment and Support, was responding to a report by the House of Commons Public Accounts Committee on the National Audit Office Major Projects Report 2006. He said:
“I welcome today's report and we will study the conclusions and recommendations carefully and respond fully to Parliament in due course. My initial view is that the report takes a constructive view of the work we're doing to improve the way we buy weapons and equipment needed by the Armed Forces.
“It acknowledges our increased emphasis on managing equipment right through its life-cycle, and the formation of Defence Equipment and Support as part of this. It also acknowledges an improving picture on delivery on in-service dates, better management of our key people and of our relationship with industry.
“To ensure project teams' performance will be assessed on costs over which they have direct control, non-programme costs have been allocated to other more appropriate areas. We have been clear that we do not claim these as savings to the Department. This measure will help us take a more effective corporate approach to cost management. This was properly costed, and as the PAC report acknowledges this was a reasonable measure.
“MoD – as the report makes clear – only claimed real savings on project costs.”
Background Information
1. The Public Accounts Committee Ministry of Defence Major Projects Report 2006, the 46th Report of session 2006-2007, was published on 11 September 2007.
2. The Committee took evidence from then Chief of Defence Procurement Sir Peter Spencer and from Deputy Chief of the Defence Staff (Equipment Capability) Lt Gen Andrew Figgures on 31 January 2007.
3. The Ministry of Defence will respond fully to Parliament on the Report's recommendations and conclusions in due course.
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