§ Mr. Crausby
To ask the Secretary of State for Defence what action he is taking to increase the productivity and reduce the running costs of his Department. 
§ Mr. Spellar
Delivering efficient and modern public services is a key part of the Government's agenda for improving productivity. Greater efficiency is being sought within the public sector to ensure that the most effective results are obtained from available resources. The Ministry of Defence's (MOD) Public Service Agreement (PSA) sets out the objectives, key targets and resources for the MOD and the Armed Forces, and includes a range of measures to ensure that the budget allocated to defence purchases the maximum capability for the Armed Forces and fulfils the plans set out in the Strategic Defence Review.
The key measures from the PSA that will help raise the Department's productivity are shown below:The MOD is committed to achieving efficiency savings of 3 per cent. a year (as a percentage of the operating costs efficiency baseline) for the period 1998–99 to 2001–02. In support of this, savings of at least £15 million a year are generated from ideas implemented through MOD's GEMS scheme, one of the most successful staff suggestion programmes in the UK.The appointment of a Chief of Defence Logistics, followed by the creation of a unified organisation to provide logistic support to all three Services, will help to achieve a reduction in book value of non munitions stockholdings of £2.2 billion by April 2001.87WThe MOD is reforming its procurement organisation through the creation of the Defence Procurement Agency and implementation of the Smart Procurement Initiative. The DPA has been set a target to reduce its operating costs by 20 per cent. by 2001–02.The Department is committed to slimming down its central headquarters organisation, which has already reduced by 30 per cent. since 1990; and to reducing the planned number of office buildings to be occupied to two (from 24 in 1990).The Department is developing a strategy for better management and utilisation of the overall defence estate, including the realisation of gross receipts of more than £700 million from the sale of surplus property.MOD will regularly and systematically review all services and activities not directly associated with front line forces over a five year period in line with Government policy, "Better Quality Services". The Department will pursue private sector involvement in MOD business, where it provides best value for money, through Public/Private Partnership initiatives.
The MOD is on track to meet the targets described above. The Defence White Paper 1999 (Cm 4446) and the Ministry of Defence Performance Report 1998–99 (Cm 4520), which were published on 20 December 1999, describe the progress that has been made in implementing the Strategic Defence Review and against the targets set in the MOD's PSA.