Armed Forces Bill (Third sitting)

David Reed Excerpts

Thursday 26th March 2026 Public Bill Committees

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

I beg to move amendment 17, in clause 3, page 7, line 16, at end insert—

“(4) The Defence Housing Service will operate within a budget which must be set out in any Defence Investment Plan published by the Secretary of State.”

This amendment would ensure that Defence Housing Service’s budget is set out in any Defence Investment Plan published by the Secretary of State.

Good morning, Mr Efford. It is a pleasure to serve under your chairmanship again as we move on to clause 3, which concerns the proposed new Defence Housing Service and associated matters. I will speak to amendment 17 in my name. There are no Liberal Democrats in the room yet, but I am sure they will be joining us at some point.

We have been assisted in examining this topic by our very helpful evidence sessions with Mr David Brewer, the putative head of the new Defence Housing Service, and Ms Natalie Elphicke Ross, a former parliamentary colleague of ours on both sides of the House, who has materially assisted the Government with their review and the creation of their new plan. We acknowledge her efforts.

We also had a very informative Defence Infrastructure Organisation briefing during our visit to Portsmouth, where we visited a number of dwellings in a military patch outside the wire. That included houses representing both before and after, as it were: those that had been refurbished to an obviously good standard, and those that were still awaiting that work. I place on record our thanks to members of the DIO and to the Clerks for what was, as I hope the whole Committee will agree, an extremely informative visit.

Before we get into the meat of the debate, I will take it as read that all members of the Committee share the same objective: an improved quality of service family accommodation for our valued armed forces personnel and their families. Again, for the record, we thank them for their service. We would also like to see good-quality accommodation for senior service personnel. The debate is therefore not so much about the objective, which I think we all share, as about the best way of achieving it. That is where we may have some genuine differences of opinion this morning, but hopefully for the right reasons.

Amendment 17 focuses on the budget for the proposed new Defence Housing Service. Its essence is that the Defence Housing Service’s budget should be clearly set out in any defence investment plan published by the Secretary of State. [Interruption.] Good morning! The Liberals are now with us.

There is an obvious historical context for the amendment. I think it is fair to say that down the years, under Governments of both colours—three colours, if we include the coalition Government of 2010 to 2015—there has been a constant tension in the funding of the defence housing estate. On the one hand, there has been a desire to provide capital to upgrade it; on the other hand, there have been general pressures on the defence budget. It has not been unknown for capital expenditure to be deferred from one year to another to free up resourcing for other operational priorities that were deemed more pressing or urgent by Ministers at the time.

The aims and objectives of the new Defence Housing Service are rightly ambitious, which raises questions about how to secure the money and what safeguards there are, if any, against any future Government raiding that substantial pot of cash for other priorities should the circumstances arise. Both Mr Brewer and Ms Elphicke Ross were very clear in their evidence on the subject on 4 March: they said that after considerable discussion with the Treasury, a sum of some £9 billion had been put aside to create the Defence Housing Service and enable it to achieve its objectives laid out in the Bill.

Nevertheless, during the same evidence session, it was established after some detailed—indeed, forensic—questioning from my hon. Friend the Member for Exmouth and Exeter East that the money had not been formally signed off by His Majesty’s Treasury. That is because the sum is currently included in the defence investment plan, which itself has not been signed off by His Majesty’s Treasury.

As we all know, the defence investment plan has not been published, although Parliament was initially promised it by last autumn. I do not intend to labour—no pun intended—the point this morning, as we debated it at some length in the main Chamber on Tuesday evening. Suffice it to say that when the Government published the strategic defence review in July last year, they deferred many of the crunchy equipment and capability decisions to a subsequent defence investment plan. We were promised that it would be published in the autumn. We were then faithfully promised that it would be published by Christmas. We were then absolutely promised that it would be published fairly shortly thereafter. Here we are on 26 March, the day on which the House rises for the Easter recess, and still it has not been published.

That leads to an additional problem, including for the Defence Housing Service. Part of the DIP, presumably including service accommodation in Scotland and Wales, could be affected by the outcome of the forthcoming Scottish Parliament and Welsh Senedd elections, at least indirectly. If the DIP is not published extremely shortly, it is likely to be caught by the purdah rules on those national elections. The putative date for the King’s Speech seems to be settling on or around 13 May. That means that the DIP is unlikely to be published until the second half of May, nearly two months from now, by which time the Defence Housing Service is meant to be under way.

In essence, we are debating a plan based on a long-term budget that has not yet been agreed by the Treasury because, bluntly, the Ministry of Defence is at war with it. That is why the DIP has not been published. It is conceivable—although, for the record, I hope that this will not be the case—that whenever final negotiations are eventually concluded, the Treasury may insist on further reductions in the DIP, which in turn could lead to further reductions to the £9 billion currently allocated for the programme. That is why we tabled amendment 17, which states that the budget for the Defence Housing Service must be very clearly set out in the defence investment plan, whenever it is published, not least so that in subsequent iterations of the plan we can see whether the funding allocation is being reduced or increased.

Will the Minister guarantee to the Committee that, as of 26 March 2026, the £9 billion in the forward programme has been formally signed off by His Majesty’s Treasury? In other words, can he guarantee that it is ringfenced in the DIP? If he cannot, can he at least tell us when the DIP will finally be published? A fortnight ago, I said privately to a Labour peer that waiting for the DIP was like waiting for Godot. He replied, “Yes, Mark, but at least Godot finally turned up.” Will the Minister answer those questions so that the Committee can take a view on the surety of the funding on which this admittedly very ambitious plan undoubtedly rests?

[David Reed (Exmouth and Exeter East) (Con)]

It is a pleasure to serve under your chairship, Mr Efford. I wish to add some points to bolster the argument of my right hon. Friend the Member for Rayleigh and Wickford.

We were promised the DIP before Christmas, but right hon. and hon. Members do not need me to tell them that it is now the end of March and we still do not have it. It is all well and good talking about a 25% reduction in delivery costs and about improved military housing, but until those promises are reflected in a clear, costed defence investment plan, they will remain words, not guarantees.

That is precisely why my right hon. Friend’s amendment 17 is so important. It states that if the Government are serious about defence housing, the Defence Housing Service’s budget must be set out in the DIP. It would tie the rhetoric on forces housing, new helicopters and new military hardware to an actual budget line. If Ministers truly intend to deliver what they have promised, they should have no difficulty in writing it into a plan.

Let us be clear with our service personnel and their families. We welcome investment when it is real, but we will not pretend that an uncosted statement is the same as a funded commitment. Until the Government publish the defence investment plan and the DHS budget is there in black and white, this House is being asked to take it on trust. That is not good enough.

[The Minister for the Armed Forces (Al Carns)]

It is a pleasure to speak under your chairmanship, Mr Efford. I put on record my thanks to the DIO team, Natalie Elphicke Ross and the collective armed forces for helping us to design this well-thought-through and very effective defence housing strategy. I thank the right hon. Member for Rayleigh and Wickford for his amendment concerning the Defence Housing Service budget, and for his interest, as always, in the defence investment plan.

The defence housing strategy will be backed by £9 billion of funding to deliver a decade of renewal for defence family housing. Previously, military housing was subject to insufficient, stop-start funding that did not deliver value for money for the taxpayer or the improvements that service families deserve. I have lived in service family accommodation, as I am sure other hon. Members have. We have seen the oscillating budgets. We have seen, in some cases, the lack of value for money.

When this Government came in, one thing we said we would absolutely do was ensure that people can have safe, secure, dry homes to live in if their loved ones go overseas to protect the freedoms we enjoy. That is why we set out the defence housing strategy. We liaised with a plethora of individuals, from the families federations to housing associations, to ensure that we came up with a well-thought-through plan that is funded and looks at the medium and long term as well as the short term.

The Defence Housing Service budget will be clearly set out. It will account for its spending to Parliament via an annual report, so there will be accountability. As the Committee heard during the evidence sessions, there is nothing in the defence investment plan process that is stopping the Department getting work under way now. The Defence Housing Service can be up and running from April 2027, and the work of renewing the estate can continue.

[David Reed]

We have heard these arguments in Committee, we have had experts come in and we have visited defence housing. We need to get to the nub of this. The wording being used today is that there will be £9 billion in the budget and that we know it will be in the defence investment plan. As it is reported that the defence investment plan is sat on the Prime Minister’s desk at the moment, and I am sure the Minister will have seen the defence investment plan, can he confirm today that he has seen that £9 billion in the defence investment plan, and that it will be signed off with that £9 billion for housing?

[Al Carns]

I can confirm that £9 billion will be secured to ensure that we get the defence housing strategy and the Defence Housing Service up and running. We have said that in Parliament previously, and I reiterate it here.

It is worth noting the need for a Defence Housing Service and the professionalisation of our service as a whole, because some of the stats and facts from the time we came into Government were, I can only say, nothing short of shocking. In November 2023, there was a high of 4,200 complaints. Where is it in 2026? It is 400. We have already made improvements, we are heading in the right direction and we will continue to deliver in due course. We are getting on with the job of making improvements now for service families and preparing for the launch of the new Defence Housing Service so that we can go even further and faster to fix defence homes.

Setting a requirement in legislation, in the way that the right hon. Member for Rayleigh and Wickford suggests, is not only unnecessary but risks frustrating the vital work of the Defence Housing Service. His amendment 17, which specifies that the Defence Housing Service must operate within a budget set out in the DIP, risks constraining the service in the scenario in which investment is set in the defence investment plan but then has to rise thereafter. That could happen, for example, in the case of additional increases in personnel, or a change in the international situation that could require additional housing. Any additional spending would risk being in breach of the requirement unless and until a new defence investment plan is published. That would undoubtedly constrain the service’s ability to respond swiftly and appropriately to changing requirements. I hope that provides the necessary reassurance to the right hon. Member.

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[David Reed]

I am sure that many Members will recognise the unique situation that many armed forces personnel and their families face. Family life in service is often marked by prolonged periods of separation, frequent relocations and the operational demands that come with serving one’s country—I know many members of the Committee have experienced that life. Those pressures can place significant strain on relationships, particularly where families are no longer living together.

In those circumstances, maintaining meaningful contact between parents and their children can be especially challenging. I think we can all agree that, where it is safe and appropriate, children benefit greatly from having a consistent and positive relationship with both parents, regardless of whether one or both are serving. My right hon. Friend the Member for Rayleigh and Wickford has laid out expertly how his amendment would not cut across what the courts have said. It seeks only to bolster the relationship between parents and children.

Amendment 15 would address a practical but important barrier to contact. By requiring service accommodation policies to make explicit provision for contact visits, it would recognise that the current system does not always adequately support separated families. Too often, there is no suitable space or arrangement in which a serving parent can spend proper quality time with their child, particularly where accommodation is limited, shared or not designed with family visits in mind, as we saw on our recent visit to Portsmouth.

Earmarking accommodation for this purpose would provide a clear and structured way to support those relationships. It would ensure that when a serviceperson seeks to maintain contact with their child, they are not prevented from doing so by logistical constraints or by a lack of appropriate facilities. It is a modest and proportionate step, but one that could make a meaningful difference to the wellbeing of service families.

Importantly, this is not about creating new entitlements without limits. It is about recognising a specific and foreseeable need, and ensuring that the system is equipped to meet it in a fair and practical way. It reflects our broader duty to support those who serve, not only in their professional capacity but in their family life.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Having had years of personal experience, I think it is a shame that the modernised accommodation offer did not go through, because that would have dealt with these situations. We are back to square one. The Minister will be aware that specific contact orders will have to be maintained, but we will have to build from a standing start after the disaster of the modernised accommodation offer.

[David Reed]

I recognise the hon. Member’s point. The service that she explains is not equitable across the whole system. I know that she speaks with experience. Having served myself, I have had friends in similar situations who have not received the type of support that she would have expected. I hope that progress can be made under the Bill. The amendment moved by my right hon. Friend the Member for Rayleigh and Wickford would push that agenda and make life, and having a relationship with their children, a lot easier for those who serve.

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[Mr Francois]

I thank the hon. Gentleman for his kind comment—every dog has its day. Yes, I think it should, and that is partly the purpose for tabling the amendment.

For the avoidance of doubt, I accept in principle that, given the very large amounts of money we spend on equipment procurement—potentially more than £0.25 trillion over the next decade—paying someone quite a lot of money to get it to work is inherently not an unreasonable thing to do. Nevertheless, the appointment did raise eyebrows across the civil service.

To be fair, as I understand it, the chief executive of BAE Systems earns about £10 million a year—although if we look at what he has done to its share price, a shareholder might argue that it is a pretty good investment. Charles Woodburn is widely regarded in the industry as knowing what he is about, and is a highly professional leader of that company.

None the less, I have sympathy with the question posed by the hon. Member for Tunbridge Wells. If this is part of the bonus arrangements, what are the metrics? If he were to get a bonus for the performance of Defence Housing Service, how do we know how much he will get? And how would we judge whether it is value for money, not just for the taxpayer but for the rent payers—the customers—of the Defence Housing Service? I hope the Committee will understand there is a genuine point at issue here.

We would be very interested to know what element, if any, of the NAD’s salary, and specifically the bonus payment, is related to the performance of the Defence Housing Service. By the same token—I hope the hon. Member for Tunbridge Wells is with me here—if the Defence Housing Service were to underperform, what would happen to the NAD’s base salary? Would it be docked? It is a really serious question.

To summarise, could the Minister explain why the Department decided to manage it in this way? There must be a rationale, and the Committee would like to know what it is. Could he also explain how these bonus arrangements will work and how transparent all of it will be?

[David Reed]

My right hon. Friend has just laid out a very strong case for why amendment 16 needs to be incorporated into the Bill, and I hope the Minister has taken those points on board—I look forward to hearing his wind-up. This is a straightforward but important amendment that seeks to bring clarity, accountability and proper ministerial oversight to the way in which the Defence Housing Service reports on its performance.

At present, the reporting structure is, frankly, overly complex. Responsibility is diffused across multiple layers, making it difficult to establish who is ultimately answerable when and if standards fall short. That lack of clarity does not serve service personnel or their families, who depend on the system working effectively. We know from our visits and from Members’ own experience that there is an overly complex and convoluted reporting chain where nothing really gets sorted and things are passed up but never actually worked on. We now have the opportunity to improve that structure.

I do not think the current structure assists the House in carrying out its proper scrutiny of how public money is spent and how vital services are delivered. The amendment would put that right by establishing a clear and direct line of accountability, and it would require the chief executive of the Defence Housing Service to report directly to the Minister for the Armed Forces.

Going back to the point that my right hon. Friend just raised, incorporating the National Armaments Director and having that person accountable in this long chain does not breed the view that Parliament needs to be able to scrutinise what is going on. Given how much the Minister cares about this, and the fact that he is an elected representative, I know he would want to have that view unfiltered from the Defence Housing Service itself.

This is a sensible and proportionate step that ensures that responsibility sits at the appropriate level and that there is a named Minister who can be held to account by this House. More importantly, the public will ultimately hold the Minister to account anyway. If I were in his shoes, I would want that unfiltered view coming straight up to me. If we are talking about performance bonuses—and I have no reason to believe that that is the case with the National Armaments Director, but if it were to be the case—I would not want anything to be tarnished or moved around that was linked to performance bonuses. I would not want there to be any incentives like that.

There is also a practical benefit. A direct reporting relationship will help to ensure that the issues are escalated more quickly, decisions are taken more efficiently and there is greater transparency around performance, which is something we all want to see. It should also lead to better oversight, sharper focus on delivery and, ultimately, improved outcomes for those living in service accommodation.

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[David Reed]

Referring back to the intervention of my right hon. Friend the Member for Rayleigh and Wickford, the bonuses are an important part of the Bill. If accountability for housing is now going through the National Armaments Director, and we are seeking to increase visibility so that we can scrutinise what is happening in the Defence Housing Service, that bonus part is important. Maybe this is an area for the Committee of the whole House, but we have to dig into it.

[Al Carns]

On the question of accountability, the board will report directly to the Secretary of State. There will be no filtering and no taint on any information coming up. Therefore, I do not necessarily agree with the premise of the hon. Gentleman’s intervention.

I will address new clause 7 in my closing remarks.

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[Al Carns]

Perhaps that is why we are not taking it forward now.

Furthermore, the Ministry of Defence heavily subsidises rents. There have been suggestions that the Defence Housing Service could borrow private finance off the balance sheet if it was a housing association rather than a public body. However, expert advice from the Treasury, the Cabinet Office and others confirms that is not the case. The exclusivity of the defence housing purpose and the scale of MOD payments mean that such financial arrangements are not feasible.

Equally important, and close to my heart, is the welfare of service personnel and their families. Evidence presented to the defence housing strategy review team revealed that local commands exercised significant discretion to support personnel in a plethora of difficult circumstances, such as bereavement. That welfare-based discretion is a cornerstone of armed forces culture, and moving housing management to a third-party provider could put it at risk, undermining this vital welfare function. Finally, the planned housing renewal programme demands very close working relationships with military commands to ensure that it supports operational effectiveness rather than undermining it. Such close collaboration is not realistically achievable through a private or third sector body.

[David Reed]

I refer the Minister back to amendment 16 on the line of accountability. He makes the point about adding an extra layer and removing accountability from the Minister for the Armed Forces. Does he not see that that is the point that we are trying to make? Making the CEO for DHS report directly to the Minister for the Armed Forces would give him an unfiltered view, so that he can do this work on bereavement or the state of housing. This direct line of accountability would give him that power.

[Al Carns]

There is some confusion here. The Minister for the Armed Forces does not deal with the housing, the people or the welfare; he deals with the operation and policy output. There is a clear understanding of that. Amendment 16 refers to

“ the Minister of State for the Armed Forces”.

That is the wrong role, so the amendment is wrong.

Let us just stick to the point. The board itself will be accountable to the Secretary of State. That is the cleanest way to provide a sharp and crisp command and control model, and to allow the Secretary of State to make sure that the board, which has family members on it, provides the best service. Let us not misunderstand some of the ranks, roles and responsibilities within defence.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Christian Wakeford.)