DTR funding tied to eco-town plans

story at http://www.defencemanagement.com/

DTR funding tied to eco-town plans
Wednesday, October 29, 2008
The government is in line to make hundreds of millions of pounds from the sale of excess MoD land as part of its eco-town plans despite the property market bottoming out it has been revealed.

The troubled Defence Training Review (DTR) is to be largely funded through the sale of excess MoD land as certain estates close down in order to move facilities to the new training site in St Athan, Wales. Recent news reports and revelations by armed forces minister Bob Ainsworth indicate that the sale of excess land will continue to be a key part of the funding strategy for the DTR.

Many of these soon to be vacant MoD estates will be part of the government’s plan for eco-towns. The Treasury stands to make at least £275m from the sales of 15 vacant land parcels, nearly half of which will come from the MoD. Some of these including a site at Borden are targeted for closure as part of the DTR.

Ainsworth told MPs that due to the property market crisis, valuation of the site at Borden was "prudent." While it is unclear how much the government and the Metrix consortium will make off the sale, other sites including the Royal Engineers depot at Long Marston have already been valued. Sources indicate that the Treasury could collect £84m from the sale of the depot by itself to eco-town developers.

Critics of the programme have argued that the DTR is being moved ahead despite widespread concerns over its viability and affordability in order to fund eco-towns and give profits to the Treasury and MoD.

Meanwhile the DTR programme, which is already £1bn over budget and has been forced to develop a new business plan, will not come under investigation from the National Audit Office or Comptroller, yet. Since the final financing agreement has not yet been formulated, the DTR has yet to enter the MoD accounts. Therefore the NAO cannot investigate the programme’s affordability and financing according to Ainsworth.

No comments: