Ministry of Defence: Progress with estates disposals
This report will consider the progress the Ministry of Defence has made with estates disposals.
A key aspect of good financial management is the effective management of those assets and liabilities that are of strategic importance to the UK, which often have decades-long life-spans. These range from infrastructure assets such as flood defences and transport, to long-term liabilities such as incentives for electricity generation. The scale, complexity and long time-frames make managing these assets and liabilities highly challenging, especially as different Governments must maintain them and account to taxpayers.
To take a strategic approach, government needs to collect accurate information (eg about asset deterioration) and build effective relationships with key suppliers. It needs to make long-term plans when determining infrastructure finance, forecasting future demand, and valuing liabilities and long-term guarantees.
Key NAO publication:
This report will consider the progress the Ministry of Defence has made with estates disposals.
This report provides information on managing PFI contracts when they end and considers whether government is preparing for expiry appropriately.
The MoD has developed a strategy that identifies the estate it needs and the 25% of its estate it can dispose of by 2040. However, the strategy and current funding levels allow only for a partial reversal of the decline in the condition of the remaining estate. There is a significant risk that the poor condition of the estate will affect the Department’s ability to provide the defence capability needed.
The NAO has today published an update for the Public Accounts Committee, detailing developments in the management of the Sellafield site, the UK’s largest and most hazardous nuclear site, and the extent to which progress has been made in decommissioning and cleaning it up.
The Environment Agency has improved the cost effectiveness and prioritization of its flood risk spending but current spending is insufficient to meet many flood defence maintenance needs.
Long-standing issues in the rail industry and the scale of the procurements led to the DfT’s decision to lead the procurements itself, despite not having led a major rolling stock procurement before.
The lack of predictability of funding for highways authorities has practical implications for road networks and may lead to increased costs in the long term.
The competition to let this franchise lacked oversight. The full cost to the taxpayer is unknown, but likely to be significant.
The Treasury’s 2009 decision to split Northern Rock in two was reasonable at the time but the final net cost to the taxpayer could be some £2 billion.
The Mortgage Rescue Scheme, launched in January 2009 by the Department for Communities and Local Government, achieved fewer than half of the rescues expected. The Department helped 2,600 households avoid repossession and homelessness at a cost of in excess of £240 million – but it originally expected to help 6,000 households for £205 million.