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part three3.43 ‘Steady state’ in the management of the estate isexpected to be reached by 2007 after the Regional PrimeContracts are fully established; these have the potentialto deliver continuous improvements over the life of thecontracts. Economies of scale will not be achieved untilRegional Prime Contracts have all been let and forecaststaff reductions achieved. It is too early to judge whetheror not the benefits of a more flexible, fit for purpose estatedelivering better value for money will be delivered asthis is dependent on implementation of the new waysof working and on estate rationalisation, and on theprovision of sufficient funding.There is no plan for the achievementof benefits3.44 Much is expected of the new ways of working, forexample, new management and contracting arrangementsare expected to deliver economies of scale includingreductions in personnel, greater coherence and reducedduplication leading to the delivery of a flexible, fit forpurpose estate. As part of its centrally agreed efficiencyplan, the Department has a target to release cashableefficiencies from centralising the estates managementfunction with net staff savings. A range of benefits havealso been identified from other estate initiatives such asstand-alone private finance initiative deals and the SingleLiving Accommodation Modernisation project. Theseinclude wider benefits for personnel and to operationaleffectiveness such as improved retention, unit cohesionand ethos.3.45 The performance measurement and managementregime being developed by Defence Estates will supportthe management of the estate and provide some measureof improvement. However, separate arrangements areneeded to ensure that the full range of identified benefitsare delivered and measured throughout the Department.The Chief Executive of Defence Estates is SeniorResponsible Owner for the estate change programme buthe has no line management responsibility for functionsoutside Defence Estates. Thus, responsibility for thedelivery of benefits is dispersed and has not yet beenfully defined. For example, there needs to be a planwhich identifies and places targets on those responsiblefor reducing personnel outside Defence Estates and forachieving the operational benefits.Risk management is still maturing andis not presented as a coherent wholeto the Defence Management Board3.46 Defence Estates risk strategy, summarised atFigure 11, appeared for the first time in its 2004Corporate Plan. This strategy is focused on performanceby Defence Estates.3.47 Risk management within the Department as a wholeis also developing with a new Business ManagementSystem, the appointment of Process Owners withresponsibility for managing risk across their area ofbusiness as well as Senior Responsible Owners takingresponsibility for specific change programmes.3.48 Estate risks are reported to the Defence ManagementBoard by Defence Estates. However, there is evidence thatthe management of risk with respect to the estate remainsdisjointed with customers reporting risks to estate inputsand risks to Regional Prime Contracts and Single LivingAccommodation Modernisation. Individual estate projectsbeing managed elsewhere in the Department, includingPrivate Finance Initiative projects, have their own riskstrategies which are not always linked into the DefenceBalanced Scorecard. The Department established theDefence Estates Committee to ensure that estates risk ismanaged across the Department.The Department has more to do toensure that quality improvementsare deliveredImplementation of estate initiatives ishampered by some skills shortages, particularlyin key functions such as Project Management3.49 The Department has identified the skills it requires forthe management of the estate and the new Regional PrimeContracts. Staffing Plans identify particular shortages inFacilities or Maintenance Managers and Project Managers.Detailed analysis of staffing is carried out at the locallevel. Better central coordination is dependent on thedevelopment of the Department’s new Human ResourceManagement System. Both external recruitment andemployment of consultants is being used to address skillshortages including manpower substitution.26MINISTRY OF DEFENCE: MANAGING THE DEFENCE ESTATE
part three11Defence Estates Risk MatrixRisk Management within Defence EstatesThe identified risks are mapped against the perspectives of the Balanced Scorecard as shown below. The risks will be reviewedregulthmitigation plans begin to take effect.LowMediumPROBABILITYLow Medium High High Medium LowManagedEfficiency &EffectivenessEstateSolutions RightSize & QualityLowMediumIMPACTHighHigh4 12 536HighHighIMPACTMediumLowDevelopBestPracticeLow Medium High High Medium LowPROBABILITY7SocietyandEnvironmentMediumLowRisk1 Ministry of Defence budget holders fail to fully fundkey estate improvements to provide an estate of theright quality.2 Rationalisation proposals are not endorsed andfunding for estate rationalisation is not madeavailable to provide an estate of the right size.3 Failure of Defence Estates, customers and industry toembrace new processes and cultural change.4 Failure to demonstrate the efficiencies to be gainedfrom the changes in the approach to how the estateis managed.5 Construction Industry fails to deliver outputs to time,quality and cost.6 Failure to develop a coherent approved purple estateprogramme in line with the overall Estate Strategy.7 Loss of confidence in the Estate Strategy by StatutoryBodies and Non-Governmental Organisations.Source: Defence EstatesImpactH - Delays to Prime Contracting roll-out. Delay in realising improved VFM.Injections of cash are less efficient, loss of economies of scale, no medium orlong-term planning can take place.H - Defence Estates fails to deliver desired receipts in longer-term. Sub-optimalestate with higher running costs. Investment in estate works uncoordinated.H - Delays to improvement in estate, change initiatives fail to take hold andembed. Failure to realise the value for money efficiencies from new ways ofworking. Inefficiency creeps into estate processes. Defence Estates fails to takecustomers and industry along strategic path.H - Loss of confidence and credibility in the estate change initiatives. Reticencefrom customers and Ministry of Defence to provide support for further change.New processes are not fully adopted, inefficiencies accumulate and traditionalculture prevails.H - Anticipated value for money enhancements arising from Prime Contractingnot achieved. Dysfunctional collaborative relationships or poor selection ofprime contractor. Industry unable to suppress fraud and malpractice.H - Deterioration of estate, incoherent investment, inefficient use of estate fundsand missed rationalisation opportunities.M - Departmental plans for development and use of estate frustrated byexternal lobby groups. Potential delays as planning processes are challenged,together with restrictions on use of estate.MINISTRY OF DEFENCE: MANAGING THE DEFENCE ESTATE27
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Page 5 and 6: PART 2Estate rationalisation is com
Page 7 and 8: executive summary1 The Ministry of
Page 9 and 10: executive summary2Major ongoing est
Page 11 and 12: executive summaryensure that a cons
Page 13 and 14: part one1.1 The Department faces ma
Page 15 and 16: part oneThe Department now reportsb
Page 17 and 18: part two2.1 Rationalising estate ho
Page 19 and 20: part two2.13 The Royal Air Force le
Page 21 and 22: part two4Disposal receiptsThe Depar
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Page 27 and 28: part threeBenefits of using the pri
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Page 31: part three3.35 The prime contract f
Page 35 and 36: appendix oneAPPENDIX 1Study Methodo
Page 37 and 38: appendix twoUnited Kingdom Signific

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