Ministry of Defence ‘must not squander opportunity’ on disposal programme

The Ministry of Defence faces “significant challenges” in shrinking its real estate portfolio through planned disposals, according to a new report. The National Audit Office said the affordability of the MoD’s disposal programme, which has so far cost £4.3bn, is “likely to remain a challenge” and said that the department should reassess the potential benefits with better cost data. It added that March’s Integrated Review on future military capabilities, force size and location means the department “now has the opportunity, for the first time in many years, to reassess its requirements and set revised targets for estates rationalisation”. The MoD launched a real estate optimisation strategy in 2016, since which time it has reduced the size of its built estate by 2%. It currently holds a built estate including 900 sites with about 96,000 buildings, as well as a rural portfolio. But planned disposals mean it will now not meet its target of a reduction of 30% by 2041. The MoD’s forecast for cost savings from estate rationalisation have fallen by almost three-quarters since 2016. They now stand at £650,000, down from £2.4bn. Meg Hillier, chair of the Public Accounts Committee, said: “MoD is still not delivering its programme to reduce the size of its estate. Meanwhile, cost savings are being eroded as MoD must continue to meet running costs for an estate it no longer needs… “With publication of the Integrated Review and increased budgeting certainty, MoD must not squander its opportunity to put right these long-standing failures.” To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews