Adam Ingram (Minister of State (Armed Forces), Ministry of Defence; East Kilbride, Strathaven & Lesmahagow, Labour)

I am announcing that the Ministry of Defence has decided to seek an alternative to the current private finance initiative (PFI) solution for the armoured vehicle training services (AVTS).

A detailed assessment of the Landmark Training Ltd consortium's bid has concluded that the PFI deal did not offer an acceptable value for money solution to meet the capability that the MOD required.

I realise that this will be disappointing for the bidders. However, robust decisions need to be taken and we will only proceed with such a long-term commitment of public money where we are confident of a successful, value for money outcome for our armed forces and the taxpayer.

Improvements to our armoured vehicles training will continue. This change in direction will allow us to examine other procurement options. We plan to take advantage of emerging technology and best practice as it develops in the commercial training areas, which could include public-private partnership forming part of the overall future solution. In the meantime, the quantity and quality of existing armoured vehicles training will be maintained to support the professional performance of our armoured fighting vehicle crews as exemplified in Iraq.

Although not continuing with this PFI, the MOD will continue to use PFI where it can be shown to deliver better value for money as exemplified by the recent PFI deal with the Amey Lec consortium to provide C vehicles for the armed forces.