Summary

106.  The Department continued to invest in rationalising and improving the quality of the Defence Estate. In particular, the Defence Housing Executive and Defence Estates made significant progress towards improving the quality of Service family and Single Living accommodation. Defence Estates completed a Core Sites Review to identify the estate needed over the long term to support Defence objectives. It has also begun to implement improved estate acquisition and management processes, including the signing of the first of five major regional prime contracts to provide routine estate management work and minor capital investment.

Service Accommodation

Service Family Accommodation

107.  The Defence Housing Executive (DHE) continued its housing modernisation programme, upgrading 1,440 Service family houses against an in-year target of 1,200 upgrades. Since gaining Agency status in 1999, DHE has consistently met or exceeded its annual upgrade targets and now has about 21,000 properties at Standard 1 for Condition, which is about half the estimated long-term (i.e. required until at least 2008) core stock requirement (see Figure 5). This requirement is estimated annually. Over 90% of families are now housed in properties at Standard 1 or 2. DHE's total upgrade programme expenditure in 2002/03 was £53.5M.

Single Living Accommodation

108.  The Secretary of State announced in 2001 that £1Bn would be made available over the following ten years to upgrade Single Living Accommodation, comprising new build and refurbishment works to deliver single room en suite accommodation. This is known as Project SLAM. Debut Services Ltd, a consortium of Bovis Lend Leases and Babcock, were selected as the Preferred Bidder in September 2002 and were subsequently awarded the Prime Contract in December 2002. The contract will provide upgrades to approximately 16,000 bed spaces over the next five to seven years, with a number of projects due to be delivered in 2003/04. In April 2003 work began on two sites: Middle Wallop (82 Army bed spaces) and Coningsby (552 Royal Air Force bed spaces).

Figure 5: Number and Proportion of Service Family Accomodation Properties at Standard 1 for Condition
- Other Standard	- Standard 1

109.  Separately from Project SLAM, the Department upgraded over 2,500 bed spaces in 2002/03 and plans to upgrade a further 16,500 over the next five years.

Defence Estates

110.  Defence Estates was re-launched as an Executive Agency of the MOD on 1 April 2003. Its mission is to deliver estate solutions to Defence needs and the organisation exists solely to provide estate management services to support the delivery of Defence capability. This is an important element of the wider Defence Change Programme (see paragraph 175). New targets have been agreed for the next five years, which, among other things, cover improving the condition of the Defence Estate to ensure fitness for purpose and producing and gaining agreement to a Core Sites Implementation Plan. These targets reflect the fundamental changes to Defence Estates' business and will enable the Agency's performance and the improvements to the estate to be demonstrated in a consistent way.

Core Sites

111.  The Department achieved the PSA target of identifying those sites that currently make up the core and non-core mainland UK Defence Estate by 31 December 2002. The whole project concluded in March 2003 and the Department now has a comprehensive understanding of the nature, extent and value of its estate assets, how well they meet Defence requirements and the scope that exists for development and informed rationalisation. This 'supply' baseline information forms the basis of work now underway to design a strategy to achieve an estate of the right size, shape and quality to meet current and perceived future Defence requirements.

112.  Early work shows that there is scope for improving efficiency through using the existing estate better. The Department will, where appropriate, take the opportunity to release high-value sites and those with high maintenance and running costs. Those functions based in the London travel-to-work area and the Southeast more generally are being looked at in light of the initiative being led by Sir Michael Lyons, who is conducting a review into moving Central Government functions and offices out of London and the Southeast.

Regional Prime Contracting

113.  To ensure better value for money and faster progress with property management across the Defence Estate, maintenance needs will in future be placed through a small number of 'Regional Prime Contracts'. These will bring improvements in supply chain management, collaborative working with industry, and a reduction in management overheads. The target to award the contract for Scotland by 31 March 2003 was achieved and it is planned that all regions will have contracts awarded by the end of October 2005.

Project AQUATRINE

114.  Project AQUATRINE is a major Private Finance Initiative project, which transfers the responsibility for the operation and maintenance of all MOD water and wastewater systems in England, Wales and Scotland to the private sector for a 25-year period. The contract for Package A, which covers the south-west of England and all of Wales, was let in April 2003 and is due to commence in late 2003. Packages B and C, which cover the rest of mainland UK, are due for contract award before the end of 2003/04.

Last Updated: 3 Dec 03