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Defence Logistics Organisation

Defence written question – answered on 13th May 2002.

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Photo of Bernard Jenkin Bernard Jenkin Shadow Secretary of State for Defence

To ask the Secretary of State for Defence what the operating costs were of the Defence Logistics Organisation in (a) 2002–03 and (b) each year since it was established.

Photo of Adam Ingram Adam Ingram Minister of State (Armed Forces), Ministry of Defence

The Defence Logistics Organisation (DLO) was formed on 3 April 2000. The first year of operation (2000–01) was managed under a cash regime. 2001–02 was managed under the new resource accounting system for the first time but the final outturn will not be available until the end of October 2002 which is when the National Audit Office is expected to have completed the audit of the departmental accounts. Operating costs have therefore been provided on a cash basis for consistency as follows:

Financial year 2000–01 final outturn: £5.798 billion

Financial year 2001–02 AP 12: £6.371 billion.

Under a cash accounting regime, operating costs include expenditure on capital projects and running costs. The outturn for 2000–01 included a transfer of some £600 million from the Defence Procurement Agency to the DLO following the transfer of responsibility for the management of in-service support costs. Financial year 2001–02 included a transfer of an additional £400 million for in-service support, taking the annual total transfer of in-service support costs into the DLO to around £1 billion.

Financial year 2002–03 has only just started and under the new resource accounting regime the DLO has not been given a cash control total equivalent target.

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