MoD to hand over running of bases to private sector The Ministry of Defence is expected to appoint a private sector partner to manage its entire military estate - from airfields to training bases - within weeks in a trailblazing deal that will pave the way for sales of properties including Deepcut barracks estate in Surrey. The MoD is one of Britain's biggest land owners, with 230,000 acres of land covering conservation sites, office blocks, barracks, homes and military bases. But with budgets under pressure, the Defence Infrastructure Organisation, which employs 2,500 staff managing the estate, is seeking a private sector partner to help manage employees, and sell off prime property. Although the staff will remain civil servants, their numbers are expected to be cut, as are a number of subcontractors. The troubled outsourcing giant Serco is leading one of three consortiums in the race to win the £400m, 10-year deal. But the company is still to hear whether it will be allowed to win future government work after being referred - along with rival G4S - to the Serious Fraud Office for overcharging the government on electronic monitoring contracts. A decision by the Cabinet Office on whether the company has overhauled its practices sufficiently is due as early as this week. Capita and Telereal Trillium are leading the other two consortiums competing for the contract. The decision to outsource the management of the DIO comes as the MoD seeks to meet aggressive cost-saving targets at a time of operational upheaval. The government also faces a huge challenge to ensure that troops in Germany and Afghanistan expected to return to the UK in the next few years are adequately housed. Meanwhile, the number of troops is also expected to shrink to its lowest number since the Napoleonic wars 200 years ago, providing opportunities for land sell-offs as the department faces an 8 per cent cut in its £37bn a year budget. The DIO is one of Britain's largest land owners, controlling 1.1 per cent of the land mass in the UK. Its 130,000 assets include natural conservation sites such as Salisbury Plain, as well as prime central London properties. These include several sites such as the Old War Office in Whitehall - where Sir Winston Churchill once worked - which are expected to be put up for sale. Other sites set for sale include the Deepcut site in Surrey, which will close in 2016, as part of the MoD's plans to move to a few larger so-called "super barracks." Other barracks will receive heavy investment, such as Salisbury, Colchester and Aldershot, while the sale potential of any London property will come "under the microscope," sources said. In 2007, the MoD sold the 12.8 acre Chelsea Barracks site for almost £1bn to Qatari Diar. The DIO is responsible for training, housing and deploying troops, and its outsourced management will help to shrink the infrastructure as the government proceeds with plans to cut the defence budget. An MoD spokesperson said: "We are considering appointing a strategic business partner from the private sector to provide infrastructure support. This could help the MoD unlock knowledge, skills and resources that are currently unavailable within the organisation. A number of bidders are currently being considered but no final decision has been taken. The deal comes as Andrew Manley, chief executive of the DIO, remains suspended from his post on full pay until a probe by the MoD is completed. Mr Manley, who was brought in as chief executive from the private sector in 2011 as part of government plans to streamline the MoD, was revealed last year to have claimed expenses worth more than £5,500 for a series of stays at a luxury hotel close to the DIO's Sutton Coldfield headquarters. The DIO contract is among a wave of outsourcing deals that is transforming the way the British armed services go about their daily business over the next 10 years. Two years ago the government handed the responsibility for army recruitment training to Capita, paying the company £1bn over 10 years to hire 9,000 soldiers a year for the army. But the deal has come under fire after a leaked report by research company Gartner revealed that the Ministry of Defence had spent £15.5m on an online recruitment computer system that is two years behind schedule. The MoD, along with the Ministry of Justice, is widely considered to be at the forefront of government plans to use the private sector in the delivery of public services. Last year it stoked controversy with plans to hand private contractors the £14bn a year job of procuring military equipment. The plan was later dropped after all but one of the bidders dropped out.