Press Release - Ministry of Defence: A defence
estate of the right size to meet operational
needs
9 July 2010
The Ministry of Defence, one of the largest landowners in the
UK, has strengthened its estate planning and achieved significant
receipts from disposal of property but the changes are not yet
sufficient to drive value for money for the taxpayer rigorously,
according to the National Audit Office. While the defence estate
primarily exists to support defence capabilities, the Department
has not matched its focus on operational needs with enough
attention to efficient use of its estate assets and to reducing
costs.
Today’s report acknowledges that, between 1998 and 2008, the MOD
identified and took opportunities to rationalise that part of its
UK estate not needed for training, generating £3.4 billion from the
sale of surplus property. Nevertheless, over the same period the
Department reduced the number of civilian and military personnel
three times faster than it reduced its built estate. This raises a
clear question about whether there are opportunities to reduce the
estate further and secure cost savings and further disposal
receipts.
In the context of the Strategic Defence and Security Review, the
Department needs to consider what minimum estate will be required
to meet future needs of the reshaped Armed Forces. The MOD has
identified 12 per cent of its sites, comprising two per cent of its
estate by size, as suitable for disposal. The NAO concludes that
the Department’s process for categorising sites is rightly driven
by operational requirements but it does not give sufficient weight
to other factors such as how heavily a site is used, running costs,
or potential income from sale.
The Department has strengthened its estate planning,
particularly through a new Defence-wide estate plan. But the plan
lacks supporting measures allowing progress to be judged and does
not articulate what the right size of the estate would be or how
much it would cost.
The MOD also lacks sufficient data centrally to conduct the
necessary analysis to help it reduce costs in a structured way. The
NAO has identified five categories of information needed to
identify the scope for further estate rationalisation: operational
importance; utilisation; condition; potential value; and running
costs.
Amyas Morse, head of the National
Audit Office, said today:
"The Ministry of Defence needs to
change its mindset towards its estate, so that not only does it,
rightly, focus on operational needs, but also gives due emphasis to
making the reductions in costs needed in the current fiscal
climate.
"The evidence is that the Department could substantially
build on the progress it has already made in rationalising its
estate and reducing costs. But it should do this, not by simply
responding to individual opportunities as they occur, but in a
systematic way, based on clear objectives, adequate mechanisms for
achieving them and good quality central data."
Notes for Editors
- The MOD owns around 240,000 hectares and has rights of access
to a further 130,000 hectares in the United Kingdom. It manages a
further 200,000 hectares overseas. The estate is diverse, with some
4,000 sites including airfields, naval bases and barracks.
- The total value of the estate is nearly £20 billion. The
Department currently spends £2.9 billion each year running its
estate. The Department estimates that around £1 billion was spent
on capital estate related projects in 2008-09.
- The ‘built estate’ is the Department's overall estate holdings,
excluding the training estate.
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Amyas Morse, is the head
of the National Audit Office which employs some 900 staff. He and
the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 40/10
All enquiries to Phil Groves, NAO Press
Office:
Tel: 020 7798 5339
Mobile: 07770 678477