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To ask the Secretary of State for Defence if he will list (a) real estate properties and (b) intellectual property rights that the Government have transferred or plan to transfer to QinetiQ, indicating (i) how each property has been valued, (ii) if he plans to make such transfers at full market value and (iii) what arrangements there will be to claw back increases in the value of such properties.
The information is as follows:
(a) The real estate properties transferred to QinetiQ are listed:
|Bedford Enclave||Clapham, Bedford||6|
|Bedford Tunnels||Clapham, Bedford||35|
|Bedford Twinwoods||Clapham, Bedford||21|
|Cobbet Hill||Woking, Surrey||76|
|Farnborough Codey||Farnborough, Hampshire||149|
|Fort Halstead||Sevenoaks, Kent||135|
|Fraser||Eastney, Portsmouth, Hampshire||5|
|Funtington North||Chichester, West Sussex||16|
|Hurn Main||Bournemouth, East Dorset||98|
|Hurn Barnsfield||Bournemouth, East Dorset||143|
|Hurn Saddleheath||Bournemouth, East Dorset||20|
|Hutton Moor||West Super Mare, North Somerset||6|
|Malvern Main Site||Malvern, Worcester||28|
|Malvern Science Park||Malvern, Worcester||5|
|Portsdown LBTS||Portsmouth, Hampshire||11|
|Pyestock North||Farnborough, Hampshire||53|
|Pyestock South||Farnborough, Hampshire||34|
|West Drayton||Heathrow, Middlesex||2|
(21) Approximate hectares
(22) These sites are a mixture of freehold and leased land.
Sizes are approximate and have been rounded.
In addition QinetiQ are leaseholders at a number of other sites.
(i) GVA Grimley, an independent professional valuation company, were engaged by DERA to perform a valuation exercise to determine the "fair value" of the property portfolio as at
(a) Non-specialsed properties—existing use value
(b) Specialised properties—depreciated replacement cost
(c) Properties surplus to requirements—open market value
(d) Properties held as investment—open market value.
(ii) All properties were transferred to QinetiQ at the values calculated by GVA Grimley using the most appropriate methodology, as outlined in (i).
(iii) All sites where freehold or leasehold title has transferred to QinetiQ are subject to a clawback arrangement contractually agreed with the MOD. This limits QinetiQ's ability to make abnormal profits on disposal. The clawback agreement was based on the valuations conducted by GVA Grimley in 2001, with an allowance for inflation over the 12-year period of the agreement. It provides for MOD to share a proportion of any additional receipts above this value; this proportion starts at 50 per cent. and decreases gradually over the life of the agreement.
This clawback agreement provides an appropriate balance between sharing future benefits from estate sales and incentivising the company to manage its assets efficiently.
(b) Due to the volume involved, it is not possible to list all the Intellectual Property (IP) transferred to QinetiQ (e.g. over 3,000 patents that have been assigned to the company).
The basic principal adopted was that QinetiQ should be put in the same position as any other defence contractor, i.e. where IP had been generated within that part of DERA that was to become QinetiQ then QinetiQ should own the IPR. As with the rest of industry, MOD retains free user rights where public money was used to create the IP.
(i) and (ii) There was no valuation attributed to the IP at vesting as value will be realised within the value of future sales of MOD's shareholdings.
(iii) IP clawback provision has not been provided in this PPP. This mirrors MOD policy, which is not to include any form of levy agreement when letting contracts for research and technology with other parts of industry, the reason for this being that in contrast to equipment it is virtually impossible to trace the research and technology that may have been used to generate future revenue. As a significant shareholder in QinetiQ for the next few years, we believe that the freedom and encouragement to exploit results commercially represents better overall value for money than pursuing a clawback arrangement where the extent of bureaucracy would be great and the potential returns difficult to obtain.