Source · Select Committees · Public Accounts Committee
Recommendation 3
3
The Department has made slow progress in reducing the size of its estate.
Conclusion
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 now has a central 6 Optimising the defence estate team coordinating the DEO Portfolio and has resolved a funding gap to 2031. The Department has also delegated more responsibility for estate management to TLBs. It must now live up to its new Permanent Secretary’s mantra of “delivery, delivery, delivery” and tackle significant challenges. In 2019, the Department ended its 10- year contract with its Strategic Business Partner five years early because it was not delivering expected benefits. This created a skills and capabilities gap which the Department is seeking to fill by building in-house capabilities, although it currently remains reliant on contractors. To maximise sales receipts, the Department is working with local authorities to include site disposals in local plans and is developing strategies to dispose of large and complex sites. It has also started looking at ways to speed up the slow and complex process of rehousing displaced units and selling vacated sites, including engaging with the government-wide Project Speed, which aims to quicken infrastructure projects. Recommendation: By the end of this Parliament, the Department must be able to demonstrate that it has built on recent developments to deliver planned site disposals. Each June, it should provide the Committee with an update on its progress, reporting against its revised performance framework. It should also identify and apply good practice from across the public and private sectors to ensure it is achieving timely disposals which maximise returns.
Government Response
Acknowledged
HM Government
Acknowledged
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 200 surplus sites since 2015 in line with expectations to the value of over £1 billion. The department has also been optimising its use of the current estate to ensure it is appropriately located, resilient and sustainable to provide better value for money. 3.4 Following the 2020 SR, DEO is now fully funded following a gap left by withdrawal of Private Finance funding. It will meet new capability demands and be an important but not exclusive part of optimising the estate. The DEO portfolio SRO has worked closely with the Infrastructure and Projects Authority and engaged with a client-side partner to provide private sector and industry knowledge for maximising returns. The SRO has also engaged with relevant cross-Whitehall stakeholders, such as the Cabinet Office and the Department for Levelling Up, Housing and Communities.