Oral Answers to Questions

Debate between Harriett Baldwin and Nigel Mills

Monday 12th September 2016 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

8. What recent assessment he has made of the value for money obtained from single-source defence procurement contracts.

[The Parliamentary Under-Secretary of State for Defence (Harriett Baldwin)]

Competition remains the best way of securing value for money but sometimes we need to place single-source contracts. We therefore established a new regime backed by statute with an independent regulator to ensure contract costs and profit rates are both reasonable and transparent.

[Nigel Mills]

I thank the Minister for that answer. If the Single Source Regulations Office to which she refers seeks to proceed with its current proposal to reform the profit rates on those contracts, will she commit that those changes will this time have the Government’s support?

[Harriett Baldwin]

Yes, in March this year we reduced the profit rate on single-source contracts from 10.6% to 8.95%. The regulator will then recommend a rate for 2017, which we will consider carefully, along with its recommendation on multiple profit rates.