Managing the defence budget and estate - Public Accounts Committee Contents


2  Managing the defence estate

13. The defence estate covers 1.5% of the UK.[33] It includes 370,000 hectares across 4,000 sites, while the Department also manages a further 200,000 hectares overseas.[34] This estate, valued at over £20 billion, exists to support operations and defence capabilities across the Royal Navy, Army and Royal Air Force.[35]

14. The Department was unable to say whether an estate that covers 1.5% of the UK is too large, too small or the right size.[36] It has few, if any, metrics to determine what an estate of the right size should look like.[37] We noted that, while the built estate has reduced by 4.3% over the last ten years, personnel numbers have reduced by 13.4% - three times more - over the same period.[38]

15. The Department has developed a Defence Estates Development Plan, which was published for the first time in 2008.[39] This plan lists the Department's 571 main sites and how long it plans to keep them for, but it lacks measures or quantifiable targets regarding the cost and size of the estate.[40] Nor does it have information on key measures including condition, operational importance, running costs, value and utilisation. [41]

16. Without this essential information, Defence Estates is not in a position to challenge the armed forces about the need to retain sites or balance the cost of the estate against operational need. Currently, the questions asked to determine whether a site can be disposed of concentrate on whether it has defined use or not - which most sites do. The Department does not ask how heavily the sites are used, how much they cost to run or how much they would be worth if sold.[42] It is therefore unsurprising that little progress has been made on reducing the size of the estate; the RAF, for instance, has only reduced its airfields by 800 hectares (3%) over the last ten years.[43]

17. In part, the reason for the absence of any performance measures or quantified targets is that the Department lacks centrally collected data to assess them.[44] For example, on utilisation, there is no suite of measures to assess the intensity with which airfields are used.[45] Previous efforts to establish a data system have failed. The Department initiated the Estates Performance Measurement System in 2005, and began populating it with data in 2007.[46] This system has since been abandoned, as the broad scope of the database led to concerns over data consistency.[47]

18. We are astounded that five years of effort and expense have apparently produced no tangible data we can examine to assess how well the defence estate is being used.[48] In our view, managing a £20 billion asset with virtually no understanding of its cost or efficiency is entirely unacceptable.[49]

Figure 1: Essential data to manage the estate

Source: C&AG's report on the defence estate, Figure 15

19. The Department is developing a new system to record data on the estate, including costs and utilisation rates.[50] However, the Department believes that it will take over a year to populate the system with data and could not give a date by which all the data needed to manage its estate would be available.[51] We believe the Department should, within six months, collect sufficient data to allow it to start managing its estate efficiently (such as those outlined in Figure 1). This process would not require a perfect system to be developed, nor should it involve placing an undue burden on the Department.[52] Once this data has been collected to an acceptable degree, it could then be enhanced further to help the Department manage the next generation of major estate contracts.[53] We would also expect the Department to use improved central data to reassess more rigorously its estate holdings and costs in line with the findings of the Strategic Defence and Security Review.


33   Q 108  Back

34   C&AG's report on the defence estate, para 1 Back

35   Qq 163-169; C&AG's report on the defence estate, para 2 Back

36   Qq 98-99  Back

37   Qq 93, 104  Back

38   Q 93; C&AG's report on the defence estate, para 1.16 Back

39   C&AG's report on the defence estate, para 6 Back

40   Q 126; C&AG's report on the defence estate, para 7 Back

41   Qq 100-101  Back

42   Qq 100-101 Back

43   Qq 110-114  Back

44   Qq 126-127, 130-138  Back

45   Qq 103-104  Back

46   Q 127; C&AG's report, Managing the defence estate: quality and sustainability, HC (2006-2007) 154, para 2.16 Back

47   Q 127  Back

48   Q 129  Back

49   Q 163  Back

50   Q 130  Back

51   Qq 131-147  Back

52   Qq 134-136, 143-144, 163-165 Back

53   Qq 141, 144 Back


 
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Prepared 14 December 2010