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Parliament's public spending watchdog has put its weight behind the government drive to use the private sector to help deliver education and training.

The National Audit Office has praised a Ministry of Defence initiative to set up a new military training college. It said this week that the MoD secured value for money when it brought in a private company to build a new campus for its Joint Services Command and Staff College in Shrivenham. The college, set up in August 2000, provides advanced and higher-level training for 2,000 services personnel each year.

The NAO report says that theMoD made substantial savings after it rejected a "conventionally funded public-sector solution" in favour of a deal under the Private Finance Initiative. Defence Management, a subsidiary of Serco Investments, was awarded a 30-year PFI contract in June 1998, primarily to build the campus.

The NAO said that, at ?200 million, the contract with Defence Management was ?23 million cheaper than the public-sector offer, and had a number of non-financial benefits.