Contingent Liability

Tobias Ellwood Excerpts

Monday 18th June 2018 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)]

My right hon. Friend the Minister of State in the House of Lords (The right hon. The Earl Howe PC) has made the following written ministerial statement.

I am today laying a departmental minute to advise that the Ministry of Defence (MOD) has received approval from Her Majesty’s Treasury (HMT) to recognise a new contingent liability which will come into force following the award of the defence fire and rescue project contract.

The defence fire and rescue project contract will provide significantly improved safety for the MOD and its firefighters through investment in modern firefighting vehicles and improved fire risk management systems. It will also deliver significant financial savings which can be reinvested in defence. The selected bidder for this contract is Capita Business Services.

The contract duration is 12 years. The contingent liability will commence on contract award and reach a maximum value of £37 million in financial year 2020-21 and will reduce thereafter as the contract progresses until it ceases in financial year 2025-26. It reflects a commercial arrangement that represents optimum value for money to the Department.

It is usual to allow a period of 14 sitting days prior to accepting a contingent liability, to provide Members of Parliament an opportunity to raise any objections.

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