§ Mr. Waterson
To ask the Secretary of State for Defence if he will make a statement about the future of the Defence Estate Organisation. 
§ Mr. Soames
The Defence Estate Organisation will launch as a defence agency of the Ministry of Defence, on 18 March 1997. The agency will be responsible for assisting MOD in managing the optimum estate of land, buildings and installations to meet the operating needs of the Department. While the management of the estate will remain the responsibility of the occupying MOD budget holder, the DEO plays a vital role in: supporting budget holders estate staff; improving MOD's stewardship of the estate; ensuring MOD receives best value for money for estate services, property management and new works procurement; acting as MOD's centre of estate expertise; and maintaining a strategic overview of the defence estate.
The DEO agency has about 1,400 staff in offices throughout the UK and abroad. The DEO's new headquarters will be at Sutton Coldfield.
The DEO's chief executive, Mr. Brian Hirst, is a widely experienced chartered surveyor recruited from the private sector, who has considerable public sector experience. He has been set the following key targets to be achieved by March 1998, by the end of DEO's first full year of operation:
- 1. Strategic Overview:
- (a.) To develop the information systems infrastructure necessary to support a strategic overview of the Defence Estate by March 1998.
- (b.) To develop a series of output-based targets for strategic overview.
- 2. To complete 30–35 establishment development plans across the Defence estate in FY 97–98.
- 3. To achieve 90 per cent. of total disposals' receipts within year against the 1997–98 target.
- 4. To meet the following contracts targets:
- (a.) To complete 75 per cent. of construction contracts within one month of the contracted completion date.
- (b.) To complete 90 per cent. of construction contracts within three months of the contracted completion date.
- (c.) To have less than 10 per cent. average variation on financially complete construction contracts.
- 5. To meet the following efficiency targets:
- (a.) To achieve a reduction in operating costs of 25 per cent. compared with the 1996–97 outturn.
- (b.) To develop a volume measure for all of DEO's business, baseline it and propose targets for subsequent years.
- 6. To complete the rural defence estate maintenance CFQ scoping and feasibility studies by end of March 1997 and to complete a CFQ scoping study for the whole of the DEO by December 1997.
- 7. To develop a mechanism for measuring customer satisfaction, establish a baseline by September 1997 and propose targets for subsequent years.
- 8. To put in place an integrated compliance audit and effectiveness review system for projects by March 1998.
I have arranged for copies of the agency's framework document and corporate plan to be placed in the Library of both Houses.515W