Defence Secretary Dr. Liam Fox has announced the creation of a single organisation to manage Defence property which will deliver better strategic management of the military estate as well as savings of £1.2 billion over the first four years alone.

The Defence Infrastructure Organisation (DIO) will bring together all those working on estate and infrastructure activity from across the Ministry of Defence.

This is the first such change delivered by the Defence Reform Unit under Lord Levene designed to radically overhaul the structure of the Department, without reducing the effectiveness or reliability of the service delivered.

Secretary of State for Defence Dr Liam Fox said: "Our Armed Forces and their families deserve the best possible facilities in which to live, work, and prepare for operations, within the current financial situation. A single infrastructure organisation will provide effective support to our military personnel and better strategic management of the Defence estate.

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"It should also deliver significant savings in running costs, increase opportunities for estate rationalisation and promote private sector growth – ultimately delivering better value for money to the taxpayer while giving the Armed Forces what they need."

The new organisation will be a "one stop shop" managing the majority of infrastructure services across Defence and delivering an essential part of the Defence reform agenda. DIO will take on the estate management responsibilities of its predecessor Defence Estates, overseeing the physical maintenance of buildings and equipment including support services, such as cleaning and catering, as well as energy and water for the estate.

It will also take on the challenge of supporting vital military tasks on an overseas estate that spans Germany, Cyprus, Falkland Islands, Gibraltar and operational theatres such as Iraq and Afghanistan, as well as the management of infrastructure Public Finance Initiative (PFI) contracts.

From 1 April 2011, DIO will bring together roughly 7000 staff, the vast majority of whom are civilian, working on construction, maintenance and disposal of land and buildings across the Department. Most staff currently work for Defence Estates, the rest work in infrastructure within the three services and other smaller organisations.

By making these changes the Ministry of Defence expects there to be a reduction of about 2,500 posts by 2014 and to save some £1.2 billion over the first four years through estate rationalisation and other efficiency measures.

(CD/GK)