Military estate faces shake-up

By John O’Doherty

Published: February 16 2011 18:49 | Last updated: February 16 2011 18:49

The UK’s military estate is to be brought under one umbrella organisation as part of plans outlined on Wednesday that are designed to save £1.2bn over the next four years.

The Defence Infrastructure Organisation will regroup all the services that currently support and maintain the Ministry of Defence’s real estate and infrastructure in the UK and overseas. This includes responsibility for the land and buildings, such as barracks, depots, airfields and houses for service members and their families, on MoD property. It will also include infrastructure services, such as energy and water utilities, catering and cleaning.

“Our armed forces and their families deserve the best possible facilities in which to live, work, and prepare for operations, within the current financial situation,” said Liam Fox, the defence secretary.

“A single infrastructure organisation will provide effective support to our military personnel and better strategic management of the defence estate.

“It should also deliver significant savings in running costs, increase opportunities for estate rationalisation and promote private sector growth – ultimately delivering better value for money to the taxpayer while giving the armed forces what they need.”

The plans are the first concrete policy to have emerged from the Defence Reform Unit, a small working group established under the leadership of Lord Levene last August with the goal of finding savings in the Ministry of Defence.

They follow long-standing criticism of the inefficient management of the defence estate, which comprises roughly 240,000 hectares and costs about £2bn annually to maintain.

DIO will come into being in April, and the majority of its 7,000 staff will come from the Defence Estates Agency.

As part of the strategic defence review announced last autumn, military spending in the UK is set to fall by 7.5 per cent in real terms during the next four years, reducing the 2014-15 budget by £8bn. Roughly half of these savings will be made by scrapping large defence “platforms” such as the second aircraft carrier. The remainder of the savings will come from laying off as many as 42,000 staff, the majority of whom will be civilians.