Optimising the defence estate

Our recommendations are intended to support the recent progress that the Department has made in better positioning itself to rationalise its estate. It should: a) reassess the potential for estates optimisation and set revised targets for a realistic disposals programme in the light of the revised defence priorities set out in the Integrated Review and defence command paper. The publication of the Integrated Review and defence command paper now provide the Department with an opportunity to reassess the potential to reduce the size of its estate, including its leasehold, rural and overseas estates. The Department has begun to consider the implications as part of its revised strategy for defence infrastructure. As part of this, it should establish a revised performance framework, including new and realistic targets for estate optimisation which are based on the size and location of the estate that is needed, and for forecast savings in running costs. The targets should be based on a clear understanding of what size estate the Department needs to fulfil its objectives, while reflecting the need for flexibility and resilience;

Ref Page 13, paragraph 22, point a · Implemented 03/2024

b) review the effectiveness of the DEO Portfolio’s governance arrangements. Given that it is one year since the new arrangements for managing the DEO Portfolio were introduced, the Portfolio team should assess whether these provide appropriate oversight and the ability to influence disposals. The Department told us that the existing arrangements on TLB delegations are under review. It should be prepared to test its governance arrangements against the principles that we saw work well for Carrier Strike and Army recruitment, which had a common strategic direction and strong leadership, delegated authorities to manage projects and clear accountabilities for achieving shared objectives;

Ref Page 14, paragraph 22, point b · Implemented 03/2023

c) analyse the factors that slow down estate optimisation and tackle the practical challenges that hamper progress in rationalising the estate. Delivery of the Department’s Portfolio will be challenging as disposing of sites involves a lengthy, complex process of preparing sites and moving equipment and personnel to new sites. The DEO Portfolio team should conduct analysis to better understand and tackle the root causes of delays. It should use this work to stress-test whether future delivery schedules on planned site disposals are achievable and identify potential risks to future funding flows. The Portfolio team should also work closely with the TLBs to ensure that site preparation work is undertaken at the right time to support estate optimisation. At a programme level, the Department should develop a clear view of the interdependencies that need to be managed, such as other accommodation initiatives and sustainability targets; and

Ref Page 14, paragraph 22, point c · Implemented 03/2024

d) build a more detailed understanding of its estate and the full cost of achieving disposals. The Department is implementing an asset management strategy to improve its management information on its estate. As part of this, it should collect detailed information on the time and cost needed to dispose of sites, including the resources needed to relocate units and prepare sites for disposal. It should use these data to improve the reliability of forecasts produced by its cost model, which would help test if its estimate of future funding requirements is realistic and identify the uncertainties that the DEO Portfolio needs to manage.

Ref Page 14, paragraph 22, point d · Implemented 09/2026