An agreement affecting Ministry of Defence service contracting was signed by Lewis Moonie, Parliamentary Under-Secretary of State for Defence, and Norman Rose, Director-General of the Business Services Association, representing private sector service providers, including major players in the wider FM market Carillion, AMEY, WS Atkins and Interserve FM.

Moonie welcomed the new document, which outlines the principles underlying future negotiations between the Ministry of Defence and its service providers: "The Key Principles statement gives a clear way forward in building a stable and fair framework for service provision within the Ministry. Savings and Value for Money need genuine changes in practice. We value the constructive approach of the BSA in helping to develop this agreement, which will benefit both sides."

The primary purpose of the Key Principles is to provide mechanism to assist contractors to fund their legal obligations under contract and employment law where, under a firm price contract, there are no specific provisions to meet those increased costs.

The Business Services Association represents the majority of the major contractors involved, and was invited by the Ministry of Defence to co-ordinate the views of interested parties. The Association worked closely with the British Hospitality Association, the British Security Industry Association and the Cleaning and Support Services Association in defining the issues and developing the final agreement.

Anna Lagerkvist