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Ministry of Defence Future Accommodation Model

Volume 615: debated on Wednesday 19 October 2016

[Mrs Madeleine Moon in the Chair]

I beg to move,

That this House has considered the Ministry of Defence’s future accommodation model.

It is an honour to have you in the Chair for this debate on a most important subject, Mrs Moon. I asked for this debate to bring clarity and reassurance to our armed forces personnel and their families about their future accommodation provision. There is a Government commitment in the armed forces covenant to providing personnel and their families with good-quality accommodation, in the right location and at a reasonable price. I receive correspondence daily from families who are deeply anxious about the direction of the future accommodation model—FAM. There is a strongly held view among military families from every rank, in every service, that the Ministry of Defence intends to allow the present system, and its poor provision of existing service family accommodation, to degrade, so that the options put forward by FAM will seem less unpalatable.

The stated reason for looking at a new, more modern accommodation model is that service personnel want more choice over where, how and with whom they live, and greater support for those who would like to buy a new home. According to the MOD, FAM

“is aiming to provide a flexible system that meets different needs at different times—not dictated by rank”—

rank is not a factor now—

“age or marriage.”

Given those stated aims, which are laudable and forward-thinking for the modern family, will the Minister tell us why the MOD is not simply looking to expand the accessibility of service family accommodation—SFA—to that new, wider service personnel audience? The MOD states that FAM is designed to save costs, because the way accommodation is now provided means that there have to be a large number of vacant homes at any one time to allow for rotation, which means greater costs for the MOD, but in the same breath, it states that FAM will not reduce the total pot of money used to subsidise housing.

I congratulate my hon. Friend on securing this important debate; given the interest in it, perhaps a longer debate would have been worth while. She makes her case well, and I invite her to extend her view to cover veterans. In the light of her interest in the military covenant, will she challenge the Minister on that angle, too?

I thank my hon. Friend for that point. That is a wider debate; we will see whether we can persuade the authorities to allow us to have that wider conversation.

Does my hon. Friend agree that the key problem is the price that service families have to pay for their accommodation? It has been creeping up and up, and I am not aware—perhaps she can enlighten me—whether the Armed Forces Pay Review Body has factored that into its annual determination.

I am afraid that I am not privy to the details of the pay review body’s work, but perhaps the Minister will answer that question for us later. I would also be grateful if he set out the present annual net cost of the SFA offer, to give the military families watching, who are very concerned, some idea of the funding available if they have to work with one of the proposed new options. We need to look starkly at what the FAM proposes, in terms of realistic housing accessibility from the private rental and purchase housing markets; realistic cost implications for families; and the real impact of the military community being broken up, leaving families unsupported at times of deployment.

This is a huge issue for military families and serving people in particular. Does my hon. Friend agree that if we do not get this right, it will have a catastrophic effect on our retention figures? We will find even more people leaving the service, which would be pretty awful, to say the least.

My hon. Friend is absolutely right. One key reason why I ask the Minister to reconsider the FAM is that it is unlikely to save the MOD money, because of the national housing shortage, and is likely to create a massive retention risk to our already undermanned and overstretched armed forces. Will the Minister tell the House exactly what he believes the existing housing offer costs the MOD in total, after rents received?

I congratulate the hon. Lady on securing this wonderful debate, which is timely and important. Does she agree that one of the challenges is the inconsistency in the quality of accommodation? New accommodation in Stafford is extraordinary, but if it is made subject to a market rent, it will not be affordable to most service personnel.

I thank the hon. Lady for raising one of the key questions. One of the great anxieties that families come to me with is the fear that the realities of private rental markets will be too costly to cope with, both for the MOD and individual families.

Will the Minister tell us what ongoing saving he wants to see in order to justify the vast upheaval and risks that bringing in the FAM would cause? Failing to meet our armed forces covenant commitment on housing by inventing a set of proposals that military families are appalled by, rather than extending the existing imperfect but workable service family accommodation model, will result in a mass exodus of experienced and highly trained military personnel.

My hon. Friend visited RAF Odiham not long ago. I am sure that she will recall that 95 bed spaces have been condemned there, and 97% of the 674 still available are grade 4—the worst-quality accommodation. Does she agree that that is a false economy, because so many spaces are no longer being used and are no longer sought after?

I recall our visit to RAF Odiham well; we were frightened nearly to death in a Chinook. Getting housing provision right—particularly behind the wire, as at Odiham—is critical to keeping those highly trained personnel. An ambitious young Army officer said to me just the other day:

“Is FAM aiming to encourage home ownership, with tools such as Help to Buy, or force personnel into home ownership? If it’s the latter, that just isn’t going to work.”

Let us turn to the FAM survey, which was apparently sent out to all serving personnel—some 190,000 men and women. First, I ask the Minister why that survey was not made mandatory, as surveys are a great deal of the time; there was a recent mandatory survey on the language skill sets of serving personnel. Anyone would think that the MOD was happy to mandate, where that suited its agenda, but that for the FAM, despite housing being a vital component of the offer for our armed forces and their families, a lower response rate better suited the MOD’s case for driving change, regardless of military families’ complex housing needs and views.

Moreover, more than 40,000 people have been excluded from answering the survey because they are deemed to be a member of a protected group, including the special forces, the military provost guard service, those based in Northern Ireland, those on full-time reserve service contracts, those under 18 and unspecified others working with those groups. Apparently the MOD will ask their opinion separately, but that has not yet happened, and those groups quite rightly feel more than a little aggrieved that their views have not yet been sought. Their families are living with uncertainty about the future of SFA, just like all the others. Will the Minister set on the record when those 40,000 or more personnel will get their chance to have their say?

Secondly, of those who received the survey, many were unable to access it because their service number, which was being used as their access token, failed to be recognised by the survey designers’ coding. Will the Minister confirm how many personnel fell through the cracks as a result of that failure? The message received by personnel was:

“If your service ID is rejected during login it means you will be unable to complete the FAM survey, because either it is not a valid armed forces service ID or you are part of a group that is not covered by the survey.”

Unsurprisingly, at that point many personnel stopped trying and simply gave up. I would find it quite insulting to be told that my service ID was not valid, and I know that many of those who put their life on the line for us all did, too. It would be helpful if the Minister clarified how many tried to access the survey but could not get in, and how many started it but failed to complete it because, as one engineer said to me,

“the whole survey just seemed like they had made up their minds that there will be change and we’ll have to lump it.”

Thirdly, many were put off from doing the survey because, as one nurse put it:

“‘This is a completely anonymous survey, please use your service number to log in’ doesn’t make me feel secure about speaking out.”

By my maths, if the Department has recorded 27,997 completed submissions, that is about a 14% return. If that is to be the basis of the evidence, we need to look closely at the questions that were and were not asked. Here we get to a key problem with the survey, and the Minister’s clarification on this point today would be helpful in reducing the sense of fait accompli that so many service families have shared with me. The survey that personnel saw on screen gave four choices; SFA remaining was not there as a fifth choice. Much later in the survey, question 24 asked:

“If SFA were available to you with the same cost as the renting package, would you want to live in SFA instead?”

That was not mandatory or part of the options offered for the FAM. As one pilot said to me,

“we were annoyed that there was no option to keep SFA, forcing us to tick another option. In a few years, when this goes ahead, they will say ‘you asked for this, look at the survey results’”.

It turns out that those who failed to get past the service ID challenge, but then nagged the team running the FAM survey, eventually received an email that asked

“which of the potential new options”

for the FAM

“do you think you would go for & why? Or would you still want to live in SFA? And why?”

If we are to give any credence to future decisions taken on a housing offer that moves away from SFA, it is vital that we are clear about who replied to which questions. A rifleman asked me whether the aim of the survey was simply to justify the dismantling of SFA, and said that to claim otherwise would be a lie, as the survey would have asked wider questions if its aim was not to justify the dismantling. Perhaps the Minister can reassure that young man and the other 196,000 personnel on that point and say that data from the survey will not be used as the basis for dismantling SFA, as so few serving personnel have been asked whether SFA is a model that they would like continued.

The Army Families Federation’s “Big Survey” report on the future of military housing highlights the critical importance of SFA in the offer; only 22% of those surveyed said that they would definitely remain in the Army if SFA was reduced and a rental allowance was offered in its place. How much has the MOD paid to Deloitte to create and manage the survey? Did Deloitte or the MOD design the impractical proposed solutions, which bear little relation to how most of the military family actually live? Will the Minister confirm whether any working group with representatives from family federations, service personnel, spouses from all ranks, SSAFA, the Defence Infrastructure Organisation and industry experts was set up? Is FAM and its four options—single living accommodation without family; renting near work; owning near work; or owning away from work, and therefore renting too—what such a broad group would have come up with?

As one naval wife said to me:

“Filling out the survey just feels like MOD justifying its forced changes and we are some part of sanctioning that. That’s why I haven’t filled it out”.

Although our Navy personnel are more likely to own their own home than those from the other services, because they are away from their families for six to nine months at a time, even the Naval Families Federation survey on FAM indicated clearly that more than 50% would prefer to live in SFA than receive a rental allowance.

An RAF wife who has moved her family seven times in 15 years highlighted just why the flexibility of SFA is so important to retention:

“Many occasions we have been posted with less than a month to move. With having to look for work, schools and everything else they want to put the pressure on me to look for a home? We don’t know the area and rely heavily on the knowledge that a quarter is in a good position with community support from other service families. The new FAM will isolate us all from that network, as well as putting strain on our family life. Seems as though the armed forces are losing the one thing that appealed to families and that was that they would look after us.”

The RAF Families Federation survey on FAM supports that family’s view, with 95% of those surveyed saying that being able to move with the serving person and live together as a family is important, and 63% highlighting the value of the accommodation being sourced and provided by their employer.

Another part of the jigsaw is the question of the footprint strategy that the MOD will publish shortly. Part of the DIO’s remit was to reduce the built footprint of MOD assets by 30% by 2020. That is 30% of all property by square footage. Although the SFA portfolio was sold off to Annington Homes back in 1996, the leaseback arrangement set in place means that the DIO keeps all the maintenance and improvement responsibility for as long as it keeps these properties on its books. The MOD negotiated with Annington Homes a 58% rent discount on all the properties, which will come to an end in 2021.

It is generally accepted that interventions should be from Members who are present for the whole speech. Is the hon. Lady happy to give way?

I asked to intervene because I am concerned that in Northern Ireland the MOD might be demolishing some of its houses in Ballykinler. The hon. Lady is being very constructive in addressing the issue; we need to see the same in Northern Ireland. Instead of demolition, there should be retention for the future.

We are looking at the issue in Northern Ireland as well.

Will the Minister give us details of any negotiations that have started with Annington Homes on a new rental framework, which would ensure that a continued level of subsidised rents could be provided to military families? My concern is that the MOD intends to hand back the bulk of the homes, and then allow Annington to rent them to service families on a private rental market arrangement, whether behind the wire or not. That would meet the 30% reduction target, but would no doubt do nothing to reduce the overall costs of subsidising housing—that is, if the MOD actually intends to price the FAM offer at a level that families find acceptable, and that allows them to choose to remain in the armed forces.

I hope that the Minister can persuade me that I am wrong, but my deep concern is that the DIO was set a financial rationalisation target without any reference to the retention risk to our human capital, and that no one in the MOD is balancing out the potential financial savings of bringing in FAM with losing the security and support of SFA. In my opinion, and that of many of our leading military leaders, our armed forces personnel are working at unsustainable levels of undermanning. If we reduce SFA—with its security, safety and community for families, and with the practicalities it offers, despite the shortcomings of the present maintenance contracts for short notice postings and so on—we risk losing many experienced personnel to the private sector, and we open up a long-term retention problem, thereby reducing the effectiveness, flexibility and world-renowned reputation of the British military.

I will not, as I do not have time.

If what I just described were to happen, it would have financial and military implications for a generation. The British people would never want to hear that the MOD had put cost saving over operational effectiveness, most especially for our human capital: the men and women who put their lives on the line for us.

The MOD’s strategic defence and security review 2015 states that Joint Force 2025 and Britain’s defence will continue to depend on the commitment, professionalism and skills of our people. Recruiting, retaining and developing the right people is therefore a top priority for the MOD. The SDSR talks about a new accommodation offer to help more service personnel to live in private accommodation or own their own homes. Perhaps the Minister can answer the question that goes to the heart of whether the Government believe in the armed forces covenant commitment, which is summed up by a highly qualified and valued member of our armed forces— I have the greatest honour of being his voice today:

“Is the implementation of FAM a deliberate attempt to destroy and de-professionalise our armed forces? Given that housing is a tiny proportion of the MOD budget, why get rid of the SFA, which means so much to so many?”

It is a pleasure to serve under your chairmanship, Mrs Moon.

I congratulate my hon. Friend the Member for Berwick-upon-Tweed (Mrs Trevelyan) on securing this debate. I know that she, like me, cares deeply about the wellbeing of our personnel. Her constructive contribution to the Public Accounts Committee report will help significantly to improve service accommodation. She asked an awful lot of very detailed questions. I can assure her that I will not be able to cover them all in the 12 and a half minutes remaining. I shall therefore start, if I may, with an apology, and an assurance that for any detailed questions I cannot cover—there will be many—I will write to her. I appeal to my hon. Friends present that, if they can limit their interventions, I may be able to attempt to respond to the debate.

I am not going to pretend that the Government record on accommodation has been an unqualified success in recent years. It has not. Issues with CarillionAmey have been well documented, not least by the PAC. Things are improving, but there remains much to do. Like my hon. Friend, I am absolutely determined to see this through and to ensure that improvements to our service family accommodation are carried through.

Nevertheless, the focus of the debate is not on the past but on the future. As our troops return from Germany and we look to rationalise our estate, we have realised that there is an unprecedented opportunity to do more for our people—an opportunity to give them greater stability, so that they do not feel they are being asked to up sticks at a moment’s notice.

Sitting suspended for a Division in the House.

On resuming

Our future accommodation model is part of the mechanism for achieving this goal of greater stability. Its benefits are not well understood, so I would like to use today’s debate to explain why I believe it will be a vast improvement on what has gone before.

First, it will be fairer. As the Public Accounts Committee acknowledged, the current model has failed to move with the times. Let me give just one example. A married senior officer will be assigned a four-bedroom home even if they have no children or other dependents, and will usually pay just £350 to £450 a month for it. By contrast, an unmarried member of the junior ranks, with a partner of 10 years and two children, is entitled to nothing more than a single bedroom in a block. If they move out to the private sector to live with their family, it could cost them well over £1,000 a month. I am determined to make the model based on need, not rank, and I am determined that it should reflect modern society.

Secondly, the model will be more flexible. Times have changed. The sort of arrangements people were happy with when I joined the Army in 1988 are no longer applicable today. Some want to live closer to their spouse’s workplace. Some want to live among the civilian community. Some want to own their own home. Some, who are single, want to share with a friend or get on the housing ladder. Currently, however, our personnel have to like it or lump it. If they choose to go it alone, we cut the purse strings and they get nothing—they get no assistance, whether financial or otherwise, from the MOD. That simply is not fair and does not make business sense to a Department looking to release parts of its estate and expand in other areas. Why spend on new accommodation if it is not even wanted in some parts?

In future, we are going to give service personnel the choice of who they live with, where they live and what sort of home they live in. No longer will it be a one-size-fits-all model. We will now support servicemen and women who want to live in the private sector by subsidising rent, taking account of the geographic differences in rent when they are required to move. Alternatively, we will help them to buy a home. We have already made a start on that through our forces Help to Buy scheme, which the Government have extended to 2018.

My last point is that our future model will be affordable. I do not mean that it is an exercise in indiscriminate cost cutting, but the current regime is characterised by chronic wastefulness. To answer the question of my hon. Friend the Member for Berwick-upon-Tweed directly, we spend about £1 billion on our accommodation and get about £200 million back in charges.

One in five service homes is empty at any one time to ensure, as I have described, that the right home is always available to the right rank. We spend £2 for every £1 of subsidy our personnel receive. We spend about £1 billion in total on accommodation, but nearly a quarter of personnel do not benefit from that. With the majority of our accommodation already owned by third parties and the cost to the MOD linked to market rents, costs are set to rise, but we can do better, not least because the money can be recycled back into the defence budget.

On the subject of affordability and efficiency, some are concerned that any savings we make could be undermined by a lower rate of retention—my hon. Friend made that point—and by dissatisfied personnel choosing to leave the armed forces earlier. In response to that, I would say that this programme is about finding the best way to make things better for our men and women. It is not about weighing up any savings we might make in accommodation against the cost to retention. We hope that our changes would diminish that risk, rather than exacerbate it. We are planning to begin piloting the future accommodation model towards the end of 2018.

Let me make three things clear. First, we are not getting rid of all service family accommodation. We know that there are benefits to the existing system—not least the sense of community it generates. In some areas, the absence of a significant rental market would make the system’s removal unworkable. In other areas I have visited, such as Ludgershall on Salisbury plain, we will be building new service family accommodation due to an increased demand as a result of the Army coming back from Germany. If we plan to scrap all service family accommodation, why are we building new service family accommodation? These are the sorts of myths that we have to try to tackle. I recognise that part of the problem has been the communication piece, and I hope that this debate will begin to address that.

What is clear is that the solution needs to be tailored to each location. What might work in London will not work in Benbecula. The amount of service family accommodation retained will differ from location to location, based on demand, operational constraints and achieving the best value for money, but reducing service family accommodation will give us more flexibility and allow us to support more personnel to live how they want to live. We are looking at options that would not guarantee service family accommodation for everyone who wants it, but that is exactly the case today. I cannot guarantee service family accommodation for everyone who wants it, which is why we have other ways of providing accommodation. I can guarantee that we would support those personnel to find and live in a home.

Secondly, we cannot take these decisions without listening to what our people want. That is why we have been consulting extensively with service personnel, taking on board the findings of the Public Accounts Committee report and the Families Federation accommodation surveys, which also include our own survey. My hon. Friend mentioned that, and I will come back to her in detail on some of the questions she asked about the survey. Personally, I do not think that 28,000 responses is a particularly poor response rate. If Members spoke to Ipsos MORI, it would say that the surveys are based on the percentage of people who reply. The statistical analysis can then be used to form the opinion, in the same way that we have opinion polls for general elections, although they were not particularly successful.

To expand on the subject of our survey, some people have suggested that it was written in a leading way, to draw people down a specific path. I would like to put that notion to rest by saying that that was unequivocally not the case. It was in fact written in consultation with Ipsos MORI and Defence Statistics with the aim of producing an unbiased set of questions, as all surveys worth the paper they are written on should be. Clearly my hon. Friend does not think the survey was unbiased, and I take that on board, but that was definitely the objective. The survey’s purpose was to understand people’s choices when presented with future accommodation model options. It also included a question asking whether respondents would prefer to remain in service family accommodation, but the programme is not about the future accommodation model versus service family accommodation; it is about coming up with a more flexible model that suits the varied needs of all.

Thirdly, at this point I should be clear that no final decisions have been made. Nothing is set in stone. The whole purpose of the consultation at this point is to offer a series of options, to listen to our service personnel and to try to find a model that suits them. It is all about putting our people first.

We have had a well-informed and valuable debate today. We all share the same fundamental desire to ensure that those who serve us are well provided for. The views of my hon. Friends—several have contributed—and those of our constituents will continue to shape our plans, but I have no doubt that the future accommodation model will provide our people with greater choice and greater stability. The old system is outdated. We are updating it so that it is fit to meet the needs and expectations of modern families in the 21st century. I am absolutely determined to deliver a system of accommodation for our service personnel that is fit for the 21st century and, crucially, for them.

Question put and agreed to.


That this House has considered the Ministry of Defence’s future accommodation model.