Value for Money Examination 27; Defence Property Summary


Since 1990, the Department of Defence and the Defence Forces have been the subject of several efficiency studies which have led to the commencement in 1996 of a major rationalisation programme for defence. The primary focus of reform has been on structural and personnel issues and on the equipping of the Defence Forces. Defence Property, although a significant State asset, has received less attention.

The purpose of the examination was to establish the nature, extent and operational costs associated with Defence Property and to consider current arrangements for the management of the property portfolio.

Property Assets and Costs

The Defence Properties consist of a diverse range of facilities from conventional military barracks to forts, camps, dwelling houses and land which is mainly used for training purposes. The principal assets are 34 permanently occupied barracks which were taken over from the British Government in 1922. The Department has recognised that these barracks are not all in ideal locations to serve the current needs of the Defence Forces and that some barracks are no longer required. A plan to dispose of six barracks was announced in July 1998.

Detailed records of the nature and utilisation of properties are not centrally maintained and an adequate asset register with information on the condition of the properties is not available. The current property business plan provides for establishing an assets register by 2000. Property assets are valued only when they are identified for disposal. While the question of determining the value of the properties has been considered, no overall estimate of value is available.

The examination revealed low occupancy of single and married quarters. At January 1998, it was found that only 36% of the 4,412 available single living-in accommodation units were occupied. Some 2,215 unoccupied units were rated as substandard and are partially used for storage or during training activities. The property records indicated that 117 out of 473 married quarters were vacant and practically all unoccupied married quarters were in poor condition. Since 1988, 219 married quarters have been sold off and have yielded ?2.3 million.

The rents charged for married quarters have not been increased since 1988. The occupancy of married quarters includes 80 overholders (army personnel who do not vacate their quarters following their discharge) who are charged the standard rent plus 10%. The problem of overholding and the level of rents charged are under review by the Department.

Expenditure associated with the upkeep of property in 1997 is estimated at some ?27.2 million which is 6.6% of the annual total expenditure on defence. A survey in 1994 found that property management was the ninth highest user of military manpower accounting for 404 manyears and using more time than other functions such as the maintenance of equipment, internal security operations and transport. The expenditure includes almost ?16 million for property maintenance of which nearly ?11 million related to payroll costs in respect of the employment of over 600 civilians for barracks maintenance work. The ratio of the civilian payroll to materials expenditure in 1997 was very high despite the age, condition and location of defence establishments. This suggests that there is scope for improving the efficiency of maintenance work.

The 1997 expenditure also includes ?4.4 million in respect of security duty. The high cost of security has been attributed to the excessive number of facilities occupied and to not maximising the use of modern security technology or contracting out work where it may be economically justified. Some contracting out has been arranged for the barracks recently vacated for disposal.

Management of the Property Portfolio

The arrangements for property management were reviewed in terms of the four elements of strategy, structure, management information and programme evaluation.

While statements of strategy are in place generally, they do not adequately cater for the strategic management of property. In view of current developments, there is a case for developing a medium term strategy to determine the ongoing property requirements for the new defence structures and to maximise the returns from the disposal of surplus assets and a longer term strategy for efficient and effective management of property.

There is scope for a review of the organisation and control of property administration and maintenance which should lead to more timely execution of work. The current shortage of officer engineers and their deployment on non-related duties is having an impact on the organisation of capital work and was partly responsible for a significant underspending of the budget for 1997.

In contrast to the control of contract work, the examination found that there was insufficient information available to monitor the economy and efficiency achieved from property maintenance and in particular from the work activities and output of the civilian maintenance staff. The standard of record keeping should be improved to facilitate the performance of periodic programme evaluations in the property management area.