Ministry of Defence
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MoD responds to PAC report on the privatisation of QinetiQ
The Public Accounts Committee has today published a report into the successful privatisation of QinetiQ.
Minister for Defence Equipment and Support Baroness Taylor said:
"I welcome the Committee's recognition that the privatisation of QinetiQ succeeded in generating £800M of proceeds for the taxpayer, and created a successful British-based technology business providing a sustainable future for 13,000 staff.
"I do not accept the PAC's conclusion that a further £90M could have been achieved from the sale. This is pure speculation, and fails to take into account the realities of what could be achieved in negotiation. The Ministry of Defence was backed by a range of experienced specialist advisors during the sale process, including a leading merchant bank. The charge of commercial naivety makes a good soundbite but is not supported by the facts.
"The rewards earned by senior management have already been the subject of much press comment. But the key point is that the Department and its partner Carlyle agreed a scheme in which the gains made by senior managers were linked directly to achieving growth in the value of the business."
Notes to Editors
1. Since 2001, QinetiQ has been transformed from MOD's in-house research and development organisation into an international defence and security company. A factsheet is available online on the MoD website: http://www.mod.uk/DefenceInternet/FactSheets/ModAndQinetiq.htm
2. The privatisation process has generated more than £800m for the taxpayer - £600m in cash plus a retained stake (approx 19%) in the company currently worth around £200 - 250m.
3. The Government has always made it clear that ultimately it anticipates selling its entire financial stake (approx. 19%) in the company in order to realise its financial investment and to achieve best value for money for the UK taxpayer.
