Despite plans to sell 25% of the defence estate by 2040, the National Audit Office (NAO) said there was still an £8.5 billion shortfall in the funding needed to maintain and update facilities over the course of the next 30 years.
A contract with a private sector consortium led by Capita to manage the estate had failed to deliver the expected “transformation” in the way it was run, the NAO said, despite the group receiving £90 million in funding from the taxpayer.
The NAO said extent of the deterioration meant the inability of the MoD to invest sufficient funds in the estate could now jeopardise the delivery of new and existing military capabilites.
Problems highlighted in the report include:
• A lack of funding to replace 80-year-old power cables at the Portsmouth Naval Base which could threaten the ability of the Royal Navy’s two new aircraft carriers to operate
• The Army’s main vehicle support and storage site at Ashworth in Gloucestershire lacks the capability to keep vehicles at very high levels of readiness for deployments
• The fuels infrastructure at RAF Brize Norton - home of the air-to-air refuelling fleet - had to be shut down for safety reasons and a temporary facility installed because of lack of maintenance
• Failure to fix a leaking roof at the medical centre at RAF Valley in Anglesey led the building to deteriorate so badly it had to be demolished
The MoD spends £4.8 billion on the estate which - at 424,000 hectares - accounts for 1.8% of the total UK land mass.
However financial pressures have meant that since 2009, it has been forced to abandon its programme of improvement works, reducing service levels to those needed to keep the estate “safe and legal”, resulting in a “general deterioration” in the overall condition.
“There is a significant risk that the poor condition of the estate will affect the department’s ability to provide the defence capability needed,” the NAO report said.
“As the estate’s condition deteriorates, some parts may wholly or partially close. This will exacerbate other risks and could reduce operational readiness.”
In 2014, Capita was awarded a ten-year contract to become the MoD’s “strategic business partner” running the defence infrastructure organisation (DIO), even though at the time it was struggling with the management of the Army’s recruitment programme.
However, the NAO said there had been “fundamental weaknesses” in the contracting process and that Capita had not “performed adequately against agreed key performance indicators” and that many in the military had lost confidence in the DIO.
“Although there have been some improvements, the strategic business partner’s performance has not met all expectations and has not made a notable difference in transforming DIO to better meet the needs of the commands,” the NAO said.