Recommendations & Conclusions
29 items
2
Conclusion
Twentieth Report - Optimising the defen…
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 55,000 new homes by March 2020 and raise £1 billion …
Government response. 2: PAC conclusion: The Department has no meaningful targets or high-level performance framework to incentivise it to develop an affordable estate that better supports defence needs. 2: PAC recommendation: By 31 December 2021, the Department should reset its estate optimisation …
HM Treasury
3
Conclusion
Twentieth Report - Optimising the defen…
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 to be getting a better grip on estate optimisation. It …
Government response. 3.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2022 3.2 The department will provide a report to the Committee immediately following the Ministers’ endorsement and subsequent update to Parliament. 3.3 The department has disposed of over …
HM Treasury
4
Conclusion
Twentieth Report - Optimising the defen…
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. 4.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2021/2022 4.2 The department will provide an update on progress against delivery of its asset management system in Winter 2021/2022. 4.3 The department is committed to accelerating development …
HM Treasury
5
Conclusion
Twentieth Report - Optimising the defen…
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 spent £3.1 billion on estate maintenance in 2019–20—and part of …
Government response. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2022 5.2 As with any large portfolio it was initially planned to use the best knowledge and assumptions available at the time. Several factors influenced the reduction in …
HM Treasury
6
Conclusion
Twentieth Report - Optimising the defen…
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 the latest survey on their views and experiences shows continuing …
Government response. 6.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2022 6.2 The department is refreshing building design standards to ensure that it only constructs accommodation and offices that meet the expectations of Defence personnel both now and …
HM Treasury
1
Conclusion
Twentieth Report - Optimising the defen…
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. Based on a report by the National Audit Office, the Committee took evidence on 28 June 2021 from the Ministry of Defence. The Committee published its report on 12 October 2021. This is the government’s response to the Committee’s report.
HM Treasury
7
Conclusion
Twentieth Report - Optimising the defen…
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 has a coherent, comprehensive strategy to deliver necessary reforms of …
Government response. 1.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2021/2022 1.2 The Ministry of Defence (the department) has already committed to releasing the Strategy for Defence Infrastructure (SDI) before the end of 2021. The Strategy’s vision is …
HM Treasury
8
Conclusion
Twentieth Report - Optimising the defen…
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 homes by March 2020, and to raise £1 billion from …
Government response. 2.1 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2022 2.2 The department has a clear plan for modernising its capabilities and reducing the size of the estate to meet Defence’s requirements, aligning with the 2021 Integrated …
HM Treasury
9
Conclusion
Twentieth Report - Optimising the defen…
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 plans three times, shifting away from prioritising disposals to optimising …
Government response. 3.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2022 3.2 The department will provide a report to the Committee immediately following the Ministers’ endorsement and subsequent update to Parliament. 3.3 The department has disposed of over …
HM Treasury
10
Conclusion
Twentieth Report - Optimising the defen…
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 and capabilities that the Department needs. It is seeking to …
HM Treasury
11
Conclusion
Twentieth Report - Optimising the defen…
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 its estate optimisation plans in the future, driven by a …
HM Treasury
12
Conclusion
Twentieth Report - Optimising the defen…
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 on occasion it has achieved faster disposals, including for the …
HM Treasury
13
Conclusion
Twentieth Report - Optimising the defen…
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 has committed to a budget of £4.3 billion over the …
HM Treasury
14
Conclusion
Twentieth Report - Optimising the defen…
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 planning application process 14 Q 12; C&AG’s Report, paras 3.16 …
HM Treasury
15
Conclusion
Twentieth Report - Optimising the defen…
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 as a major regeneration of the Bordon Garrison site in …
HM Treasury
16
Conclusion
Twentieth Report - Optimising the defen…
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 this target was based on a top-down assumption that was …
HM Treasury
17
Conclusion
Twentieth Report - Optimising the defen…
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 sell to ‘optimising’ its use of the estate. This change, …
HM Treasury
18
Conclusion
Twentieth Report - Optimising the defen…
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 data, and 10 years since the Department established the DIO. …
Government response. 4: PAC conclusion: 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 2010. 4: …
HM Treasury
19
Conclusion
Twentieth Report - Optimising the defen…
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 it is still several years from having the data it …
HM Treasury
20
Conclusion
Twentieth Report - Optimising the defen…
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 SLAMIS system (to manage single living accommodation) into service after …
HM Treasury
21
Conclusion
Twentieth Report - Optimising the defen…
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 estate in 2019–20, around twice the annual cost of maintaining …
HM Treasury
22
Conclusion
Twentieth Report - Optimising the defen…
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 remains value for money. However, since 2016 its forecast benefits …
HM Treasury
23
Conclusion
Twentieth Report - Optimising the defen…
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 it would invest £4.3 billion to 2031 to enable estate …
Government response. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2022 5.2 As with any large portfolio it was initially planned to use the best knowledge and assumptions available at the time. Several factors influenced the reduction in …
HM Treasury
24
Conclusion
Twentieth Report - Optimising the defen…
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 works is better understood there are indications that the costs …
Government response. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2022 5.2 As with any large portfolio it was initially planned to use the best knowledge and assumptions available at the time. Several factors influenced the reduction in …
HM Treasury
25
Conclusion
Twentieth Report - Optimising the defen…
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 zero commitments by 2050, and the DEO Portfolio is a …
Government response. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2022 5.2 As with any large portfolio it was initially planned to use the best knowledge and assumptions available at the time. Several factors influenced the reduction in …
HM Treasury
26
Conclusion
Twentieth Report - Optimising the defen…
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 of the project is in doubt, with major risks or …
HM Treasury
27
Conclusion
Twentieth Report - Optimising the defen…
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 the quality and maintenance of the estate was 34%, down …
Government response. 6.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2022 6.2 The department is refreshing building design standards to ensure that it only constructs accommodation and offices that meet the expectations of Defence personnel both now and …
HM Treasury
28
Conclusion
Twentieth Report - Optimising the defen…
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 a preventive maintenance regime.42 In June 2021, it also let …
Government response. 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 …
HM Treasury
29
Conclusion
Twentieth Report - Optimising the defen…
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 remains in the midst of arbitration to renegotiate its contract …
Government response. 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 …
HM Treasury