About Defence

MOD London Offices

The Facilities Partnership Team (FPT) is responsible for managing the provision of efficient and fit for purpose accommodation in the three principal London office buildings: the Main Building and the Old War Office Building, both in Whitehall, and St George’s Court (SZ), in Bloomsbury.

Main Building

MOD Main Building

The serviced accommodation in the Main Building (MB) and the Old War Office Building (OWOB) is provided through a major PFI contract with Modus Services Limited; facilities management services are provided by Amey, who are contracted to Modus. For SZ, services are provided by the regional Prime Contractor (PRidE) and a soft services contractor (Operon).

The Main Building Redevelopment Project and >home Programme

Key Points

  • A major government PFI project redevelopment delivered on budget and ahead of schedule
  • Main Building is Grade 1 listed and was built nearly fifty years ago. It had never had a major refurbishment. This was an essential modernisation which will allow us to provide more efficient direction to Britain's defence operations across the world
  • Not at the expense of equipment for soldiers. This is a functional, fit-for-purpose working environment to aid the management of defence. Indeed it has allowed us to make a number of efficiency gains
  • There is now capacity for some 3300 staff to work in Main Building, as compared to 2600 before decant. This increase in capacity has allowed for the divestment of five buildings in London (Northumberland House, Metropole Building, Great Scotland Yard, St Giles Court and St Christopher House)
  • Staff numbers in London have reduced from 6000 in 1999 to 4900 in 2004 of which some 3150 are in Head Office
  • Unique original features have been restored whilst delivering a new contemporary work space. Despite the building’s age, and its listed status, substantial efforts have also been made to ensure it is an energy efficient building
  • The changes to the building itself were only one part of the project, which included a new electronic information environment enabling staff to work better together, sharing information and knowledge on a secure, up-to-date system
  • Has allowed and encouraged more use of project-based teams responding to issues as they arise, working across organisational boundaries, and formed according to the skills required for the task. All delivered through a comprehensive change programme with no disruption to the ongoing conduct of defence business

Pillared Hall

Pillared Hall, MOD Main Building

Costs and Value For Money

The Main Building Redevelopment project is being delivered through a PFI contract and comprises three elements:

  • The redevelopment of Main Building into a modern and efficient headquarters for the MOD
  • The minor refurbishment, maintenance and operation of three central London offices (Northumberland House, Metropole Building and St Giles' Court) to house and support staff decanted from the Main Building from 2001 to 2004 without impacting on continuity of business
  • Provision of fully serviced office accommodation in Main Building from 2004 to 2030, and in the Old War Office Building from 2000 to 2030

The forecast cost of the overall project at outturn prices (ie, taking into account estimated inflation and other price variations) is around £2.4 billion. These figure will vary year on year irrespective of any change to the scope of the contract as one further year of actual costs is taken into account, and the remaining years forecast to reflect the latest Treasury date, for example in terms of inflation.

At contract signature, the contract was calculated at £0.746Bn; this figure is the Net Present Value (NPV) of the project at that stage, and reflects the estimated value of the project expressed at Quarter 1 2000 prices.

Other than some substantive contract variations, such as to reflect changed requirements in the aftermath of the 11th September 2001 terrorist attacks, the two figures essentially reflect the same substance, but expressed differently in accordance with standard accounting and reporting conventions. The redevelopment of the Main Building, and the return to the modernised headquarters was achieved ahead of schedule and on budget (albeit there were some limited cost increases reflecting certain changed requirements, primarily in response to 9/11).

The project allowed for the disposal of 5 of MOD’s offices in central London (Northumberland House, Metropole Building, St Giles’ Court, Great Scotland Yard, St Christopher House), saving significant annual operating costs. The redevelopment increased the capacity of the MB by some 26% to some 3300.

Specific allegations of “excess” have been levelled at the project:

  • Office chairs: the retail price tag is around £1000, but were procured at a significant discount (around one third of the price, but commercially in confidence) and given their recognised benefits this is good VFM
  • References to the expense of the refurbishment and re-provision of oak doors and the terrazzo marble floor in the Pillared Hall are accurate but the outcome reflects the requirements placed on MOD by English Heritage
  • The restaurant is not directly subsidized (although the supplier is not charged for rates, utilities); the coffee bar is provided at no cost to the tax payer; the gym is provided on a commercial basis: civilians are required to pay themselves, military personnel membership is paid out of established budgets in respect of fitness and training obligations; quiet rooms are not so staff can "take a break", but for the conduct of work or discussions for which a more discrete environment than open plan is helpful; plasma screens are to provide live access to news and other material in support of the conduct of business

The NAO Report on the project (HC 748 Session 2001-2002: 18 April 2002) was essentially positive, concluding that the deal gave MOD what it set out to procure, that the procurement process was effective, and that contract management had been good. The Report was written 2 years before the successful completion of the redevelopment and reoccupation of the Main Building, and the disposal of the redundant offices.

[1] Net Present Value shows the value of £s spent in future years in today's terms. For example: to see the value in today's terms of £100 spent next year, you must discount that figure by the agreed Treasury rate; for example, if at 5%, this would give a NPV of £95.

Palace Courtyard

Palace Courtyard, MOD Main Building

Modus Services Limited

Modus is a special purpose vehicle set up to deliver the Main Building Redevelopment PFI contract. It is with Modus that MOD has a contractual relationship, although it is through their sub-contractors that Modus delivers. Modus' principal sub-contractors are Skanska Whitehall (SW) for the building and redevelopment element of the contract (now effectively complete), and Amey for the provision of services through to contract end in 2030. The Modus management team is located on-site at MB.

All aspects of operating, maintaining and servicing MB and OWO and the business units within are the responsibility of Modus with the exception of IT and telephones, which are the responsibility of DE&S, Information Services and Support, discharged through a range of contracts, principally with Atlas and BT.

Following a 3-year decant period, The MOD moved around 3150 staff back into the redeveloped Main Building. This phased re-occupation was completed in September 2004, bringing the programme to a conclusion on budget and ahead of schedule.

The redeveloped MB workspace provides desks for all staff (ie. a 1:1 desk to individual ratio) and also includes shared areas with breakout spaces, quiet rooms and informal meeting areas. New facilities such as the restaurant, coffee bar (in the Pillared Hall), gym information centre (library) and business suite have also been introduced.

The new more open plan environment increased the capacity of the building by some 700 desks (25%), and (along with separate manpower reduction exercises) allowed for the disposal of five other London sites. The new environment is better able to support interaction, communication and collaboration in a more team-based, less hierarchical workspace. It is worth noting that the original redevelopment concept envisaged open plan working for staff below 1* level; it was the intervention of the new 2nd PUS at the time , Ian Andrews, mid-way that extended the open plan concept to embrace very nearly the entire MB community.

Historic Meeting Room

Project Timetable

June 1995 - Decision to look into PFI solution
Aug 1996 - Ministerial Approval
Dec 1996 - Expressions of Interest sought - 47 received; 33 selected for Pre Qualification and 8 consortia formed
Jun 1997 - Outline Proposals (ISOP) sought from 6 consortia
Nov 1997 - Invitation to Negotiate (ITN) sent to Modus, Modem, Mapeley (which then withdrew)
Jul 1998 - Best and Final Offers (BAFO) sought
Nov 1998 - revised and Confirmed Tenders sought
Jan 1999 - Modus selected as Preferred Bidder
May 2000 - Contract Awarded
May 2001 - Decant commenced
Aug 2001 - Decant completed (3 months ahead of schedule)
July 2004 - Redeveloped MB signed off
Sept 2004 - Reoccupation complete (2 months ahead of schedule)
May 2010 - Market Testing and Benchmarking
May 2015 - Value For Money Review; annually thereafter
May 2030 - Contract End

>home: Head Office Modern Environment

Recognising the opportunity afforded by the need to redevelop the MB, and introduce a new ICT environment (the flagship of the Defence Information Infrastructure - DII - Convergence programme), these two elements were considered to be enablers in the delivery of further business benefits. As such, ultimately, the return to MB involved a huge change programme on a physical, virtual and human level. The return to MB involved a huge change programme on a physical, virtual and human level.

In order to realise more extensive and longer term benefits, a third strand of work - a comprehensive change programme: >home (Head Office Modern Environment) - was created to embed change into business operations.>homeintroduced a benefits management regime to ensure that the benefits set out (physical, virtual and human) were tracked, monitored and managed through to delivery throughout the programme's duration.

The vision for the redevelopment programme was sponsored by Ian Andrews, 2nd PUS, and Sir Anthony Bagnall, VCDS, providing two strong champions of change. Richard Hatfield, Personnel Director, the Senior Responsible Owner (SRO) for the Programme, created the vision. This vision and the senior sponsorship formed the foundation for the change programme.

Main Building

Henry VIII Wine Cellar

Design, Construction and Redevelopment

Main Building is Grade 1 listed and was designed by Vincent Harris and built in the neoclassical style between 1938 and 1959. Main Building has many impressive architectural features, most notably the King Henry VIII Wine Cellar which is the only substantial part of the old Tudor Whitehall Palace that remained after a disastrous fire in 1698

The Wine Cellar, Whitehall and Henry VIII

Below the MOD's MB is what is now known as Henry VIII's Wine Cellar. It is a fine example of a Tudor brick-vaulted roof and is some 70 feet (21.3 m) long and 30 feet (9.1 m) wide.

By the 13th century, the Palace of Westminster had become the centre of government in England, and had been the main London residence of the king since 1049. When Henry VIII removed Cardinal Wolsey from power in 1530, he acquired York Place to replace Westminster as his main London residence. It became known as the Whitehall Palace, due to Wolsey's use of white ashlar stone in his development of the site.

Henry VIII subsequently redesigned and further extended and rebuilt the palace, including a tiltyard for jousting, inevitably tennis courts and a pit for cock fighting – located roughly where No10 and the Cabinet Office now sit.

In 1691, when the palace was believed to be the largest and the most complex palace in Europe a fire destroyed much of the older structures. On January 4th 1698 another fire destroyed most of the other residential and government buildings.

Despite some rebuilding, financial constraints prevented large scale reconstruction. In the second half of the eighteenth century, much of the site was leased for the construction of town houses. Banqueting House – where both Charles I and II died - is the only integral building of the complex now standing, although it has been somewhat modified. Various other parts of the old palace still exist, often incorporated into new buildings in the Whitehall government complex.

By the end of the 20th Century some government offices were already established in the Whitehall Gardens area. In 1909 plans were made to establish a new and significant building, primarily for the Board of Trade. Although the design – and a £5m price tag – was agreed, construction was delayed by the First World War and the subsequent depression.

In 1938, work began at the east side of the site that would become the MOD's Main Building with the demolition of several fine Georgian town houses – several rooms from which were preserved and were integrated under the MB Redevelopment as Historic meeting rooms.

During this work, this structure - an undercroft from Wolsey's Great Chamber – dating from the early 16th Century, was found to interfere not just with the plan for the new building but also with the proposed route for Horse Guards Avenue.

Following a request from Queen Mary in 1938 and a promise in Parliament, provision was made for the preservation of the cellar. Accordingly it was encased in steel and concrete and relocated nine feet to the west and nearly 19 feet (5.8 m) deeper in 1949, when building was resumed at the site after WWII. This major operation was carried out without any significant damage to the structure and it now rests safe within the basement of the building. The building was finally completed in 1959.

In 1964, the newly created integrated Ministry of Defence became the sole occupant of what became known as "The Main Building".

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