MoD raises £290m from asset sales

13 Apr 00
The Ministry of Defence claimed this week it was on target to meet its Public Service Agreement of delivering £700m worth of receipts by 2002 from the sale of its surplus assets.

14 April 2000

During 1999/2000, the ministry sold land and property worth £290m – the most it has ever sold in one year. In total, the MoD has disposed of £448m worth of sites in the past two years.

Sites sold in 1999/2000 include a factory in Farnborough, a gun wharf in Portsmouth and married quarters in Warrington. The largest single sale was the £94m Duke of York headquarters in Chelsea.

Defence minister Lewis Moonie said: 'This is excellent news for the MoD, the taxpayer and estate developers. I stress that the MoD only retains land that is essential. This allows the money from the disposals to be re-channelled into supporting the ministry's main business.'

The minister was also keen to stress a specific example of the 'joined-up' approach taken by the government. Some of the MoD land sold off will now be developed for civilian housing.

Future sites likely to be sold include the Army Medical College in central London and Shoeburyness ranges in Essex.

All the money raised from the sale of assets goes back into the £22.4bn annual defence budget. The budget is subject to annual efficiency savings. In 1998/99 the MoD achieved 4% savings – £594m – almost 1% more than its target.

Paul Beaver, a defence expert and spokesman for Jane's Information Group, said budgetary pressures were forcing the MoD to look for short-term gains. 'There will be a 3% reduction in defence spending over the next five years,' he said.

The MoD was criticised in a National Audit Office report, published in June 1998, for failing to make more of its £10bn worth of assets.

Before the sell-off, the MoD's estate totalled about 2,600 sites, covering 8,000 hectares.

The Strategic Defence Review, also published in June 1998, first raised the need for the MoD to make its assets sweat.


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