Defence infrastructure is a vital component in enabling the Armed Forces to train and prepare for operations, and for the Ministry of Defence (MOD) to deliver its outputs. The MOD spends nearly £5 billion each year operating, maintaining, constructing and disposing of its extensive infrastructure base, which represents 1.8% of the UK land area.
In November, we announced a long term programme to invest £4 billion over the next decade in an estate that will help deliver Strategic Defence and Security Review 2015’s ambitious plan for Joint Force 2025 enabling savings in running costs of £140 million over 10 years, whilst releasing 91 of our most expensive sites by 2040. This will help to deliver the MOD’s contribution of land sufficient for 55,000 new homes towards the Government’s housing target.
In parallel, we have reviewed how our estate is managed and infrastructure decisions are approached, taken, and implemented across the whole of Defence. This includes the role of the Defence Infrastructure Organisation (DIO), the Royal Navy, Army and Air Force Commands and MOD Head Office. The aim has been to ensure that every pound we spend on our estate represents optimum value for money.
We have reached two principal conclusions from this review. First, we will achieve improved allocation of available funding if infrastructure decisions that bear on the work of the military Commands are taken by them rather than by the DIO. The Commands are better placed to balance infrastructure requirements against other enablers of military capability such as equipment and trained personnel for which they already hold the budgets. In line with the Defence operating model, we therefore plan to delegate this authority, and the relevant funding, to the Commands and to Defence Equipment and Support (DE&S) from April 2018, subject to confirmation later this year that all parts of the organisation are ready to support this, and that effective safeguards are in place to ensure that we continue to drive towards a better estate that more efficiently and effectively enables military capability.
Secondly, we will restructure the DIO to operate more effectively in the new delegated environment. This means making it more customer-facing at both the strategic and operational level, improving its internal operation so that it can work better with, and deliver better value from infrastructure providers, and also strengthening its abilities to act to assure that appropriate standards are being met across the Defence estate and to provide Ministers with advice on the long term affordability of the estate and the strategic implications for the estate of decisions taken by the Commands. Since 2014 a Strategic Business Partner contract has been in place with Capita, under which they lead and manage the DIO. Capita have been instrumental in helping us deliver the Better Defence Estate Strategy and in sustaining specialist capability. We are reviewing with Capita how their continued support can be adapted to the new infrastructure model we now envisage.