Alex Massie Alex Massie

The Great Defence Procurement Rip-Off, Housing Edition

There’s no business like government business. Reacting to Philip Hammond’s statement on future army basing yesterday, today’s newspapers have led on either the decision to strip the Desert Rats of their tanks or on the broken promises on basing made to some parts of the country.

Bringing the army back from the Rhine makes plenty of sense. That is, there’s no conceivable need for British troops to remain in Germany. It is, perhaps, remarkable that, following the collapse of the Soviet Union, it will have taken (by the time the move is completed) more than a quarter of a century to achieve this. No-one can accuse the MoD of rushing these things.

The Defence Secretary claimed yesterday that basing these troops in the United Kingdom would save £240m a year. Perhaps it will. He also said the costs of the relocation will be an astonishing £1.8bn.

As always with defence matters one should probably expect that to prove an unduly optimistic estimate of the final cost. But it is still an extraordinary figure. For instance, the cost of building houses for 1,900 military families plus additional housing for 7,800 single servicemen is estimated at £1bn. This is a remarkable figure and one that does not suggest the MoD is interested in or capable of controlling costs.

For instance, if the average construction cost of each house is estimated (on the back of my envelope) at a pretty damn generous £120,000 that would require the MoD to spend £228m building these 1,900 houses. Since the MoD already owns the land upon which these houses will be built, the actual construction costs should be much lower than those which would be expected in a comparable private-sector development.

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