MoD estate management is inefficient, says NAO

8 Jul 10
The Ministry of Defence’s management of its estate does not yet provide the taxpayer with rigorous value for money, auditors said today
By Vivienne Russell

9 July 2010

The Ministry of Defence’s management of its estate does not yet provide the taxpayer with rigorous value for money, auditors said today.

A National Audit Office study found that the MoD had improved its estate planning and made £3.4bn from selling surplus property. However, it said more changes are needed.

Auditors found insufficient focus on more efficient use of estate assets and cost reduction. The number of civilian and military personnel had been reduced three times faster than the reduction in the built estate.

‘This raises a clear question about whether there are opportunities to reduce the estate further and secure cost savings and further disposal receipts,’ the NAO said.

The report urges the MoD to use the Strategic Defence and Security Review to consider what minimum estate is needed to meet the future needs of the armed forces. It notes that the department’s process for assessing sites does not give sufficient weight to factors such as a site’s running costs, the frequency of its use or the potential income from its sale.

NAO head Amyas Morse said: ‘The Ministry of Defence needs to change its mindset towards its estate, so that not only does it, rightly, focus on operational needs, but also gives due emphasis to making the reductions in costs needed in the current fiscal climate.

‘The evidence is that the department could substantially build on the progress it has already made in rationalising its estate and reducing costs. But it should do this not by simply responding to individual opportunities as they occur, but in a systematic way, based on clear objectives, adequate mechanisms for achieving them and good quality central data.’

The MoD is one of the largest landowners in the UK, owning around 240,000 hectares and possessing rights of access to another 130,000 hectares. A further 200,000 hectares are managed overseas.

The estate is made up of around 4,000 sites including naval bases, airfields and barracks. Its total value is almost £20bn and the department spends £2.9bn a year running it.

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