Hampshire County Council
Economic Prosperity Sub-Committee
Item 5
20 April 2000
The Economic Impact of the Defence Estate in Hampshire
Report of the Head of Economic Development
Contact: Barry Robinson Ext: 6566
1. Summary
This report reviews the latest position on the
changes arising out of the Strategic Defence Review.
It provides an update on current and pending military
land releases and makes recommendations about liaison
with the MoD.
2. Introduction
2.1 At its meeting on 13 January this year the
Sub-Committee considered a confidential report on a
group of brownfield sites intended for employment
uses.
2.2 Former military sites in the ownership of MoD form a
significant proportion (approximately 1/3) of the
core group of sites. The marketing and sale of major
surplus military sites invariably gives rise to
sensitive issues relating to development and disposal
and the application of Government policy guidelines.
These may have important consequences for the
availability or timing of the re-use and regeneration
of those sites.
3. The Strategic Defence Review (SDR)
3.1 Three previous reports have been presented to the
Sub-Committee; MoD Land Releases (1997), The
Strategic Defence Review and The Implications of SDR
on the Hampshire Economy (both 1998). These have
focussed on the impact defence restructuring is
having in the County.
3.2 Various changes to operational units, the advent of
agency status and public private partnerships
announced since SDR are not currently predicted to
involve significant further reductions in the number
of civilian and military personnel based in the
county. The totals are projected (2001) to remain at
around 45,000 (1997 level).
3.3 The major impact is likely to be felt through the
reuse and redevelopment of surplus military land, a
process which, although given added impetus by SDR,
has been underway for some considerable period of
time.
3.4 Based on 1996 statistics the total of MoD land in the
county is 10,000ha, comprising 79 sites, excluding
married quarters but including 36 urban sites
totalling 1,929ha (see Appendix 1).
4.0 Progress with implementation of SDR
4.1 Attached as Appendix 2 is a joint report of Hampshire
County Council and Gosport Borough Council's Chief
Executives to the Association of Hampshire and Isle
of Wight Local Authorities dated 26 November 1999.
This report gives a useful overview of the progress
made and changes arising out of SDR. The latest
position is reviewed below by District/Unitary area.
4.2 Rushmoor
4.3 No information is yet available about the outcome of
the scoping study to determine the viability and
market interest in the potential redevelopment of
Aldershot Garrison under a Public Private Partnership
arrangement. There have been recent press reports
concerning options for the Garrison compiled by the
Head of Army Recruitment and Training.
4.4 The Road and Development Sub-Committee have
considered a consultation under Circular 18/84
relating to the Defence Evaluation and Research
Agency Hub Project at Pyestock. This major
employment redevelopment involves proposals for new
buildings of 60,000sm mainly on brownfield land. The
project is intended initially to consolidate other
DERA activities at the new hub project.
4.5 It is probable that the details of the proposals will
alter over time. DERA's structure and remit may be
subject to change under the SDR, a formal Government
announcement about DERA's future is anticipated by
the summer. This may indicate how more private
sector investment could be secured by means of a
Public Private Partnership.
4.6 Gosport
No information is yet available on the outcome of the
MoD study into the whole of the Haslar Peninsula
which may create further land releases for
development. This study encompasses Fort Blockhouse,
the Royal Hospital and the DERA Maritime and
Technology Centre.
4.7 A review of naval training affecting HMS Sultan and
HMS Collingwood is understood to have been considered
by Board of Naval Training at the end of March.
Further information is awaited on the outcome.
4.8 Portsmouth
The Government has announced the awarding of
contracts to British Aerospace Land and Sea Systems
and Thomson-CSF NCS to assess options for the Future
Aircraft Carrier. Marconi Electronic Systems has
been confirmed as the prime contractor for the new
Type 45 destroyer and an initial contract has been
let to MES to carried forward studies on the
programme. The total value of the contracts is
£100m.
4.9 No decision has been made as to the home port of the
two large carriers which are intended to be brought
into service in 2012 and 2015.
5.0 Defence Estates
5.1 The Defence Estates Organisation provides advice and
guidance to the MoD on all estate matters and carries
out the majority of property disposals. The
organisation was restructured and relaunched as
Defence Estates from
1 April 1999. Hampshire is now covered by two
regional business units; South East and Germany based
in Aldershot and South West based in Portsmouth.
5.2 Although restructuring and reorganisation of the
agency is welcome the division of responsibility for
Hampshire between two regional units has impeded the
previous liaison arrangements between Hampshire Local
Authorities and the DE. The Head of Economic
Development and the County Planning Officer have been
urging DE to reactivate the previous liaison meetings
and I am pleased to report that the first meeting has
been recently agreed under the new auspices and will
take place in June.
6.0 Disposal Processes
6.1 To carry out its responsibilities for the disposal
of redundant military land, the DE operates within
Treasury Guidelines, which require Government Departments
to secure the best price reasonably obtainable and to do
so within a three year timescale. The DETR considered
that a conflict existed between the market approach to
disposals and the Government's wider objectives. These
concerns led to research and a DETR report entitled
"Development of Redundant Defence Estate" published in
late 1999 (copies of the executive summary are available
in the EDO library).
6.2 The report concluded that action is needed to make
the Treasury Guidelines more available and better
understood. The report also concluded that the DE itself
needed greater clarity on the interpretation and
implementation of the Guidelines.
7.0 Completed and pending sales of major surplus military
sites
7.1 Rushmoor
7.2 The sale of the 72.8ha (180 acres) former RAE factory
site to Slough Estates has now been completed. The
County Council has been consulted on an outline
planning application for the development of 155,000sm
of B1 floorspace with up to 6,000sm of ancillary
uses. It is estimated by the applicant that the
development will create between 6,000 and 7,000
direct jobs and 1,500 indirect jobs. The R&D
Sub-Committee are being recommended to advise
Rushmoor Borough Council, inter alia, that the County
Council has no strategic objections to the principle
of business development at the Factory Site.
7.3 The County Council has been consulted on an outline
planning application for the use of Farnborough
Aerodrome for business aviation and related
activities, buildings, works and infrastructure. TAG
Aviation has been selected by the MoD to own and
operate the airfield under CAA licence. Rushmoor
Borough Council have been advised, inter alia, that
the County Council has no objection to the principle
of business aviation at Farnborough Aerodrome.
7.4 The computer company CSC have acquired the former
Royal Pavilion site at Aldershot from Berkeley
Commercial, purchasers of the MoD's interest. CSC
have secured consent for a B1 scheme totalling
35,500sm.
7.5 Hart
7.6 Sun Microsystems have acquired the site of the former
Guillemont Barracks at Minley and have commenced
construction of the first phase of 25,000sm which
will eventually extend to 35,000sm of B1 development.
7.7 Gosport
7.6 The Royal Clarence Yard and St George's Barrack
North, 16.17ha (40 acres), has been acquired by a
developer, the Berkeley Group. Detailed planning
proposals and a timetable for development are awaited
by the Borough Council.
7.7 The marketing programme for the "built" sector,
38.81ha (95,9 acres) of the former HMS Daedalus has
been extended to provide more time for expressions of
interest to be submitted to the MoD's agents.
7.8 Fareham
7.9 No indication has been given by MoD of the timetable
for the marketing of the "non built" airfield sector,
161ha (398 acres), of the former naval air station at
Daedalus. A development strategy covering both
sectors of the site has been agreed by Defence
Estates, the County Council and both Borough
Councils.
7.1 Winchester
0
7.1 The former ASWE site now known Portsdown Main,
1 Portsdown Hill, 18.7ha (46 acres), has been marketed
by DE's agents. Expressions of interest have been
registered and submitted to DE. It is understood
that no decision has yet been taken on the second
stage marketing of this important and prominent B1
site.
8.0 Conclusions
8.1The pace at which military land disposals are taking
place is accelerating particularly in the north of the
county where market demand is strong.
Potential new releases, uncertainties over timing and the
prolonged disposal processes affecting some sites in the
south of the county could result in an over supply with
an adverse effect on investment confidence.
Substantial new investment by knowledge based industries
and ICT companies on an unprecedented scale is taking
place on former military sites in the north of the
county.
Further substantial land releases could follow current
reviews of military training needs and estate
rationalisation and development plans.
Recommendations
1. That the County Council maintain close liaison with
the Ministry of Defence and Defence Estates over
rationalisation plans affecting operational units and
military sites in the county.
2. That the Sub-Committee be kept regularly informed
about:-
a) any significant impact of these changes on the
local economy and
b) the economic development implications arising from
the disposal and development of surplus military
sites.
BRB89800
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