Progress with defence estate disposals

Public Accounts Committee Closed Inquiry
Opened: 7 Jun 2021 Closed: 14 Dec 2021 Parliament page
The Ministry of Defence holds one of the UK’s largest estates - around 1,000 buildings and facilities spread across the country ranging from training and accommodation for service personnel to military construction sites - accounting for about 1.8% of the UK land mass. It spends £3bn a year on its … Read more
6 Recommendations
23 Conclusions
1 Report
1 Oral session
1 Event
Activity timeline 3 events
14 Dec
2021
Report published
12 Oct
2021
Report published
28 Jun
2021
Oral evidence
Oral evidence sessions 1 session
28 Jun 2021
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Progress with defence estate disposals
Air Marshal Richard Knighton CB · Ministry of Defence David Williams · Daily Mail Graham Dalton · Ministry of Defence Sherin Aminossehe · Ministry of Defence
Title HC No. Published Items Response
Twentieth Report - Optimising the defence estate HC 179 12 Oct 2021 29 Responded
Recommendations & Conclusions
29 results
2 Recommendation Accepted
Twentieth Report - Optimising the …
The Department has no meaningful targets or high-level performance framework to incentivise it to develop...
The Department has no meaningful targets or high-level performance framework to incentivise it to develop an affordable estate that better supports defence needs. The Department missed two short-term government targets set in the 2015 Spending Review to release land for … Read more
Government Response
The government accepts the recommendation to reset its estate optimisation targets and develop specific shorter-term deliverables. They plan to complete and formally endorse a refreshed Defence Estate Optimisation (DEO) portfolio plan by Spring 2022, aligning it with the 2021 Integrated Review outcomes.
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3 Recommendation Accepted
Twentieth Report - Optimising the …
The Department has made slow progress in reducing the size of its estate.
The Department has made slow progress in reducing the size of its estate. Since 2015–16, the Department has reduced its built estate by just 2%. It has spent too long planning and re-organising, thereby delaying disposals. Recently, the Department appears … Read more
Government Response
The government accepts the recommendation, committing to demonstrate delivery of planned site disposals by the end of Parliament and to provide the Committee with an update report each June, also identifying and applying good practice.
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4 Conclusion Accepted
Twentieth Report - Optimising the …
The Department’s ability to make informed decisions on estate management and on which sites to...
The Department’s ability to make informed decisions on estate management and on which sites to sell remains constrained because it still lacks good management information on its estate, despite this Committee highlighting the problem in
Government Response
The government accepts the committee's observation, committing to provide an update on its asset management system by Winter 2021/2022 and to have a maturity level 3 competent system by the end of 2025 to improve estate information.
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5 Recommendation Accepted
Twentieth Report - Optimising the …
The Department’s forecast savings from its DEO Portfolio by 2040 have already fallen from £2.4...
The Department’s forecast savings from its DEO Portfolio by 2040 have already fallen from £2.4 billion to £0.65 billion, and there is a very real risk they will melt away completely. The Department’s estate is costly to run and maintain—it … Read more
Government Response
The government accepts the recommendation, committing to implement a new Delivery, Commercial and Procurement strategy by Summer 2022 to collect better data on disposal site costs and building works. It will work with industry partners to understand preparation costs and include this data in annual updates to the Committee.
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6 Recommendation Accepted
Twentieth Report - Optimising the …
The Department has still not tackled the long-known problems with the poor quality of its...
The Department has still not tackled the long-known problems with the poor quality of its estate, which continue to harm the well-being of service personnel. The condition of living accommodation is vitally important for the Armed Forces’ ‘lived experience’, yet … Read more
Government Response
The government accepts the recommendation, committing to demonstrate improvements in personnel's lived experience by Summer 2022, backed by plans to invest £1.5 billion in Single Living Accommodation and £650 million in Service Family Accommodation, and a move towards preventative maintenance.
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1 Conclusion Not Addressed
Twentieth Report - Optimising the …
On the basis of a report by the Comptroller and Auditor General, we took evidence...
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Defence on optimising the defence estate.1
Government Response
The government's response describes the procedural context of the committee's report and the government's submission, without addressing any specific content from the committee's conclusion.
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7 Recommendation Accepted
Twentieth Report - Optimising the …
The Department told us that it has the key elements of a strategy, and that...
The Department told us that it has the key elements of a strategy, and that the DEO Portfolio is the major component of this. The Portfolio, however, only covers the UK built estate. The Department could not demonstrate that it … Read more
Government Response
The government accepts the recommendation for a coherent strategy, committing to releasing the Strategy for Defence Infrastructure (SDI) by the end of 2021 and completing the updated Defence Estate Optimisation (DEO) portfolio plan by Spring 2022. They also confirm a review of the Reserves Forces Estate is underway.
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8 Conclusion Accepted
Twentieth Report - Optimising the …
Since 2015–16, the Department has reduced the size of its built estate by just 2%...
Since 2015–16, the Department has reduced the size of its built estate by just 2% (1,600 hectares). The Department also failed to meet two short-term targets set by Government in the 2015 Spending Review: to release land for 55,000 new … Read more
Government Response
While the committee's item was a conclusion about past target failures, the government's response 'agrees with the recommendation' (implying a recommendation to address target setting). They confirm the 2015 30% reduction target is no longer appropriate and state they are working on a refreshed Defence Estate Optimisation (DEO) portfolio plan, to be completed and endorsed by Spring 2022, to align with the 2021 Integrated Review and set new targets.
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9 Conclusion Acknowledged
Twentieth Report - Optimising the …
The Department’s slow progress in reducing the size of its estate is because its initial...
The Department’s slow progress in reducing the size of its estate is because its initial plans were unrealistic, and consequentially it has spent far too much time re-planning and re-organising. For example, since 2018 it has fundamentally revised its disposal … Read more
Government Response
The government agrees with the committee's observation on past slow progress in estate reduction, committing to a report by Summer 2022 and highlighting over £1 billion in site disposals since 2015 and ongoing optimisation efforts.
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10 Conclusion
Twentieth Report - Optimising the …
In 2019, the Department ended its 10-year contract with its Strategic Business Partner, led by...
In 2019, the Department ended its 10-year contract with its Strategic Business Partner, led by Capita, five years early because the contract was not delivering expected savings and improvements in running the DIO.12 This created a gap in the skills … Read more
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11 Conclusion Acknowledged
Twentieth Report - Optimising the …
There are some signs in the last two to three years that the Department has...
There are some signs in the last two to three years that the Department has started to get a better grip of optimising its estate. The new Permanent Secretary told us that the Department now has good prospects for delivering … Read more
Government Response
The government agrees with the committee's positive observations regarding the department gaining a better grip on estate optimisation, committing to provide a report by Summer 2022 and highlighting over £1 billion in site disposals and improved funding for estate programmes.
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12 Conclusion Accepted
Twentieth Report - Optimising the …
The stages that the Department must complete before it can rehouse displaced units and sell...
The stages that the Department must complete before it can rehouse displaced units and sell vacated sites can be slow and complex. The Department’s planned site disposal projects are scheduled to take an average of six years to complete, although … Read more
Government Response
The government agrees with the committee's observation (which it treats as a recommendation), stating a target implementation date of Summer 2022, and committing to provide a report to the Committee after Ministerial endorsement and a parliamentary update.
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13 Conclusion Acknowledged
Twentieth Report - Optimising the …
The Department expects to spend £5.1 billion over the 25-year lifetime of the DEO Portfolio...
The Department expects to spend £5.1 billion over the 25-year lifetime of the DEO Portfolio to 2040. In 2021, it resolved the medium-term funding shortfall in the Portfolio— caused by the government’s 2018 decision to withdraw the private finance model—and … Read more
Government Response
The government acknowledges the committee's summary of DEO Portfolio funding, confirming its current £9.3 billion investment over ten years, with DEO now fully funded. It also states that work to update the plan is expected to be completed by Spring 2022, with results shared with the Committee.
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14 Conclusion Accepted
Twentieth Report - Optimising the …
Sales receipts, and the year in which they are received, may fluctuate and there is...
Sales receipts, and the year in which they are received, may fluctuate and there is a risk that forecast income will be lower than expected. Disposals might be affected by factors such as market conditions, the impact of COVID-19, the … Read more
Government Response
The government agrees with the committee's observation and will implement a new Delivery, Commercial and Procurement strategy by Summer 2022. This strategy aims to improve confidence and accuracy in project costings by engaging early with industry and better factoring site preparation costs into planning.
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15 Conclusion Accepted
Twentieth Report - Optimising the …
The Department is also seeking to maximise sales receipts through working with local authorities to...
The Department is also seeking to maximise sales receipts through working with local authorities to ensure site disposals are included in local plans. It is developing strategies, including working with development partners, to dispose of large and complex sites, such … Read more
Government Response
The government acknowledges the committee's observation, treating it as a recommendation. It commits to providing a report to Parliament by Summer 2022 on estate disposals and highlights ongoing work with partners to maximize sales receipts.
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16 Conclusion Accepted
Twentieth Report - Optimising the …
At the time of our oral evidence session in June, the Department had only one...
At the time of our oral evidence session in June, the Department had only one remaining estate optimisation target, set in the 2015 Spending Review: to reduce the built estate by 30% (23,200 hectares) by 2040–41.23 The Department said that … Read more
Government Response
The government agrees, confirming the 2015 target to reduce the built estate by 30% is no longer appropriate and will not be pursued. A refreshed Defence Estate Optimisation portfolio plan, aligned with the 2021 Integrated Review, is expected to be completed by Spring 2022.
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17 Conclusion Accepted
Twentieth Report - Optimising the …
In 2016, the Department expected the DEO Portfolio would reduce the size of the built...
In 2016, the Department expected the DEO Portfolio would reduce the size of the built estate by 25%, and that other sales would reduce it by 5%. However, since 2016 the Department has shifted emphasis from primarily identifying land to … Read more
Government Response
The government agrees with the committee's observation, confirming the 30% estate reduction target is no longer pursued. It commits to delivering a refreshed DEO portfolio plan, aligning targets with the 2021 Integrated Review, expected by Spring 2022.
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18 Conclusion Accepted
Twentieth Report - Optimising the …
We remain extremely concerned that the Department has still not developed sufficient data to make...
We remain extremely concerned that the Department has still not developed sufficient data to make informed decisions on estate management, including which sites to sell. It is now 11 years since this Committee identified problems with the lack of estate … Read more
Government Response
The government agrees with the Committee's recommendation to accelerate the development of its asset management system and commits to providing an update by Winter 2021/2022, aiming for ISO 55001 competence by the end of 2025.
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19 Conclusion Accepted
Twentieth Report - Optimising the …
The Department told us that when DIO was established, its knowledge of the estate was...
The Department told us that when DIO was established, its knowledge of the estate was not held in one place and that it has worked to understand what estate it holds and its condition. Despite this, the Department confirmed that … Read more
Government Response
The government agrees with the committee's observation, stating it is on track to achieve a 'competent' level of asset management by the end of 2025 and will provide an update on progress by Winter 2021/2022. The department is working to accelerate development by drawing more data from contractors.
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20 Recommendation Accepted
Twentieth Report - Optimising the …
The Department’s failure to develop a comprehensive asset management system is yet another example of...
The Department’s failure to develop a comprehensive asset management system is yet another example of the poor information that underpins how it manages its estate.30 This latest admission comes soon after we highlighted the Department’s lamentable failure to bring the … Read more
Government Response
The government agrees with the implicit recommendation to address its asset management system, committing to provide an update by Winter 2021/2022 and to have a system with ISO 55001 maturity level 3 by the end of 2025.
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21 Conclusion Accepted
Twentieth Report - Optimising the …
The Department’s vision is to achieve a more affordable estate and part of its rationale...
The Department’s vision is to achieve a more affordable estate and part of its rationale for disposing of sites is to cut running costs. Its estate is costly to run and maintain, with the Department spending £4.6 billion on its … Read more
Government Response
The government agrees with the committee's observation and will implement a new Delivery, Commercial and Procurement strategy by Summer 2022. This strategy aims to improve accuracy in project costings, and the department will work with industry to better factor site preparation costs into planning to achieve a more affordable estate.
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22 Conclusion Accepted
Twentieth Report - Optimising the …
The Department forecasts that site disposals in its DEO Portfolio will deliver net savings of...
The Department forecasts that site disposals in its DEO Portfolio will deliver net savings of £0.65 billion by 2040—measured in terms of disposal proceeds and reduced running costs, offset by rehousing costs. The Department emphasised that its estate disposal programme … Read more
Government Response
The government agrees with the committee's observation regarding uncertain forecast benefits and will implement a new Delivery, Commercial and Procurement strategy by Summer 2022. This strategy aims to improve accuracy in project costings and ensure site preparation costs are fully understood and factored into planning.
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23 Conclusion Accepted
Twentieth Report - Optimising the …
Further, the Department does not fully understand the cost of achieving site disposals, creating the...
Further, the Department does not fully understand the cost of achieving site disposals, creating the risk that benefits will disappear. The 2020 Spending Review provided the Department with an additional £16.5 billion of defence funding, following which it announced that … Read more
Government Response
The government agrees with the committee's observation. It will implement a new Delivery, Commercial and Procurement strategy by Summer 2022 to improve confidence and accuracy in project costings and will work with industry partners to better understand and incorporate site preparation costs into planning.
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24 Conclusion Accepted
Twentieth Report - Optimising the …
In addition, the budget for the Department’s disposal programme is based on it reducing building...
In addition, the budget for the Department’s disposal programme is based on it reducing building costs by £1 billion by 2039–40. This creates risks for the programme’s affordability. For example, as more detailed planning is undertaken and the extent of … Read more
Government Response
The government agrees with the committee's observation. It will implement a new Delivery, Commercial and Procurement strategy by Summer 2022 to gain greater confidence and accuracy in project costings and will work with industry partners to better understand and factor in site preparation costs.
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25 Conclusion Accepted
Twentieth Report - Optimising the …
Defence is the biggest emitter of greenhouse gases in central government, and the Department realises...
Defence is the biggest emitter of greenhouse gases in central government, and the Department realises it must manage its estate in accordance with the government’s sustainability policies. The Department acknowledged the importance of a sustainable estate for achieving its net … Read more
Government Response
The government agrees with the Committee, stating it will implement a new Delivery, Commercial and Procurement strategy by Summer 2022 to improve cost accuracy for the estate. It will also work with industry to factor site preparation costs into project planning, implicitly addressing the concern about budgeting for net zero upgrades.
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26 Conclusion Accepted
Twentieth Report - Optimising the …
Since our hearing, the Infrastructure Projects Authority, which monitors the delivery of major projects, graded...
Since our hearing, the Infrastructure Projects Authority, which monitors the delivery of major projects, graded the DEO programme as Amber/Red in its July 2021 Annual Report on Major Projects.38 According to the IPA, projects are rated Amber/red when successful delivery … Read more
Government Response
The government agrees with the Committee, stating the department will provide a report to the Committee and Parliament by Summer 2022 regarding the DEO programme. It outlines ongoing efforts to work with the IPA, engage client-side partners, and secure funding to address delivery concerns highlighted by the Amber/Red rating.
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27 Conclusion Accepted
Twentieth Report - Optimising the …
The condition of living accommodation is vitally important for the Armed Forces’ ‘lived experience’, yet...
The condition of living accommodation is vitally important for the Armed Forces’ ‘lived experience’, yet the latest annual survey on personnel’s views and experiences shows continuing dissatisfaction with accommodation and its maintenance. In May 2021, satisfaction by service personnel on … Read more
Government Response
The government agrees and will refresh building design standards, planning to invest £1.5 billion in Single Living Accommodation over the next decade. It also commits to moving away from a 'fix on fail' maintenance approach under new Future Defence Infrastructure Services contracts and implementing new minimum standards for accommodation.
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28 Conclusion Not Addressed
Twentieth Report - Optimising the …
The Department told us that an additional £740 million funding over the next four years...
The Department told us that an additional £740 million funding over the next four years was allocated to infrastructure investment in the 2020 Spending Review, which will enable it to address estate priorities and move more of the estate onto … Read more
Government Response
The government response repeats the committee's conclusion verbatim, outlining new funding and maintenance contracts while reiterating the committee's concerns about repeating past failures.
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29 Conclusion Not Addressed
Twentieth Report - Optimising the …
The Department continues to grapple with a range of estate-related projects.
The Department continues to grapple with a range of estate-related projects. The pilots of the Future Accommodation Model have been delayed, and it remains uncertain whether the outcome will provide service personnel with what they want, especially post-COVID.44 The Department … Read more
Government Response
The government response repeats the committee's conclusion verbatim, detailing the department's ongoing challenges with estate-related projects, delays, and arbitration.
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Government Response AI assessment · 28 of 6 classified
Accepted 22
Acknowledged 3
Not Addressed 3
Total 6 recs + 23 conclusions