A radical new approach to managing the Defence Estate

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Strategic Defence and Security Review (SDSR), published in October 2010, examined how Britain must organise our military capability to respond…

The Strategic Defence and Security Review (SDSR), published in October 2010, examined how Britain must organise our military capability to respond to global threats posed in the coming decades.

Whether that danger comes from nuclear proliferation, revolution and civil war or terrorism, Britain must have the right military resources to deal with emerging threats.

As our Armed Forces change the ways in which they operate to meet the challenges of the future, so the support they receive must also evolve. The new Defence Infrastructure Organisation (DIO) came into being on 1 April 2011 with a clear goal to deliver better strategic management of the Defence Estate.

Acting Chief Executive of the DIO, Andrew Manley, explained:

The creation of the Defence Infrastructure Organisation marks a major step towards ensuring we have an affordable and sustainable military estate that gives our Armed Forces the best possible facilities in which to live, work and train.

DIO brings a radical new approach to how the MOD manages infrastructure and estates services, but change will not happen overnight. We expect our journey towards full operating capability to take two years, during which time a number of key strategic milestones must be met.

The new organisation must achieve significant running cost reductions, improve estate utilisation and drive further estate rationalisation and commercialisation opportunities. Through the sale of surplus land and buildings and other efficiency measures, the DIO aims to deliver savings of some £1.2bn over the next four years.

In this context, ‘infrastructure’ describes the acquisition, development, management and disposal of all fixed, permanent buildings and structures, land, utilities and facility management services, with the exception of IT infrastructure.

The DIO pulls together a number of roles and functions, as well as staff from the former Defence Estates (DE) organisation and infrastructure personnel from organisations across Defence such as the Royal Navy, Army, Royal Air Force and Defence Equipment & Support:

This new organisation has already brought together a broad range of property and infrastructure knowledge,” Mr Manley added.

The DIO has taken on the estate management responsibilities of its predecessor DE in spending some £2bn every year, managing around 240,000 hectares of land on behalf of the MOD. At around one per cent of the UK’s landmass, this vast swathe of land and property makes the Department one of the country’s largest landowners.

The military estate comprises three main areas. There is the Built Estate, which is made up of barracks, naval bases, depots and airfields, while the Housing Estate requires management of over 48,000 Service family homes and the Defence Training Estate comprises 16 major armed forces training areas and 104 other training areas and ranges in the UK alone.

The DIO has also taken on the challenge of supporting vital military tasks on an overseas estate that spans Germany, Cyprus, the Falkland Islands, Gibraltar and remote overseas stations, including operational theatres such as Afghanistan.

This diverse portfolio also includes maintenance of overseas Service family housing and provision of estate services to the United States Visiting Forces in the UK:

The model of defence infrastructure has some basic principles: streamlining and consistency of processes, economies of scale and improved communications with customers and suppliers, including industry,” DIO Deputy Chief Executive Officer David Olney explained.

However, the key to our success will centre on getting things right in four key areas: embedding the right business processes and supporting these with robust information systems to deliver our outputs; getting the appropriate organisational structure and governance-appropriate business processes; and lastly exhibiting the right behaviours leading to trust between the organisation and its users.

Mr Olney added that this change in approach enables the DIO to take a defence-wide view in strategically managing the military estate - both in the balance of investment and enabling military capability. It centralises MOD management of infrastructure, reduces costs, improves estate use and drives further rationalisation.

A new Strategic Asset Management Programme Team will translate defence infrastructure requirements into a strategic programme to deliver what the Armed Forces require to continue defending the United Kingdom. Crucially it will aim to improve the utilisation of the estate.

A lot of work has gone into merging all MOD infrastructure funding and posts into the new organisation. Subsequent phases will transform this organisation into a new leaner structure. This is likely to significantly reduce the number of MOD non-industrial and military posts involved in managing defence infrastructure over the next three years.

The transformation strategy should provide better value for money by using resources differently. For example, the Next Generation Estate Contracts programme will develop regional frameworks for MOD construction projects.

And defence infrastructure staff had already been working on rationalising ‘soft’ facilities management (FM) contracts, for support services such as cleaning and catering. This was the first step towards the DIO taking responsibility for ‘Total FM’.

Yet for all its major investment and expenditure, the new organisation does not exist in a vacuum. It is immune to neither the outcomes of the SDSR nor the hardened economic times in which we currently live.

As Britain reassesses the military capability needed to keep the nation safe in the coming decades, the new organisation must focus on getting the right estate at the right quality for the right price:

Our Armed Forces deserve the best we can give them. There is a lot of hard work ahead, but DIO will help to ensure that we deliver an affordable and sustainable military estate which will help our military personnel to do the difficult jobs we ask them to do,” said Andrew Manley.

This article is taken from the May 2011 issue of Defence Focus - the magazine for everyone in Defence.