Defence Equipment and Support

Debate between Meg Hillier and Nick Harvey

Tuesday 17th July 2012 Commons Chamber

[Nick Harvey]

There have undoubtedly been serious problems with the procurement side of the defence business for a very long time. The deficit in defence from two years ago was in very substantial part caused by the overheating of the procurement budget, but we have taken dramatic steps in the past couple of years to get the defence budget back into balance. The Treasury can see the progress we have made, but the steps we are proposing today will not be taken unless it is satisfied by the work on value for money that is currently taking place.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

As the Minister has acknowledged, there have been long-standing problems in defence procurement. The Public Accounts Committee has taken a keen interest in the matter. Will he outline exactly what steps he is taking to ensure that the establishment of the GOCO model is well worked up, so that we do not have some of the problems that we have had with other procurement bodies in the past?

[Nick Harvey]

The hon. Lady makes a good point—that is why I was at pains to spell out at the outset that the process has some considerable way to go. Only when the work on value for money is completed will a decision be taken on whether we are going ahead in principle. At that stage, we will work the model up in detail and look for a competition with private sector partners. At the end of all of that, there will be a final testing, which must satisfy the Treasury, among others. That will be the point at which a decision to go forward will be taken. There is a long route to go.