Future Accommodation Model

Jeff Smith Excerpts

Tuesday 18th April 2017 Westminster Hall

[Jeff Smith (Manchester, Withington) (Lab)]

I beg to move,

That this House has considered the Future Accommodation Model.

It is a pleasure to serve with you in the Chair, Mr Walker. I hope that you and other Members had a good Easter recess and are looking forward to an exciting few weeks ahead.

I brought forward this debate because of widespread concern about the way in which the Government are progressing the future accommodation model, the consultation process and the impact that the FAM may have on recruitment and retention by our armed forces. The Ministry of Defence seems to lack a convincing case, other than simply wanting to get personnel out of service family accommodation and into either their own homes or the private rented sector. The worry is that that threatens the practical availability of affordable quality accommodation for service personnel. I hope that the Minister can reassure us about some of the concerns and perhaps give clearer answers about what the FAM will look like.

I thank hon. and hon. and gallant Members for attending today’s debate. I do not intend my opening remarks to be very lengthy, as other Members in the Chamber have much more experience of and knowledge about this issue than I do and I am looking forward to hearing from them. I thought that there might be one or two more Members here, actually, but today’s events have perhaps focused minds elsewhere. The House discussed this issue a few months ago in a half-hour Westminster Hall debate, and I hope that this longer debate gives Members a greater opportunity to express views and the Minister an opportunity to give us some assurances.

During the recent debate on the armed forces covenant, the Minister said that the future accommodation model

“is a complex model, and it is a controversial matter. Much of the problem is that we have not had the opportunity to communicate what the options will be in the future, and I am determined to address that.”—[Official Report, 2 February 2017; Vol. 620, c. 1291.]

I hope that this debate gives him the opportunity to do that in rather more detail than we have had so far.

The context of the debate is a long period of dissatisfaction with military housing and what the hon. Member for Berwick-upon-Tweed (Mrs Trevelyan), who I am pleased to see here today, described as a “crisis” in military housing. The Public Accounts Committee found that service families

“have been badly let down for many years and are not getting the accommodation service that they have a right to expect”

and added that the

“current model for providing accommodation for families is not flexible enough to meet the reasonable needs of service families in the 21st century.”

There is a clear need for change, and the Opposition understand that need. We welcome the principle of broadening choice for service personnel and families, but that must include an important role for service family accommodation. Military accommodation is not just about bricks and mortar; the support networks and communities in a patch are absolutely crucial, too.

The future accommodation model is the Government’s response to their commitment to make a new accommodation offer to service personnel. The Government committed in the 2015 strategic defence and security review to

“help more Service personnel live in private accommodation and meet their aspirations for home ownership.”

They say that the future accommodation model will be based on need, be more flexible and reflect modern demands, which will provide personnel with more choice about the type of accommodation they live in and its location, and help if they wish to buy their own property or rent privately. I hope that we will get some assurance from the Government today that the FAM can deliver those aspirations—we are not yet convinced about that—and, most importantly, that they are taking fully into account the views of service personnel and families. There is concern that the proposals that come forward may be rushed through without full understanding of the long-term repercussions in terms of cost and impact on retention.

I want to raise a concern about the potential increased use of the private rented sector. Many of us will know from our constituency casework—I certainly know from mine—that that sector causes the greatest problems in terms of affordability, quality and security of tenure. There is real worry about the suitability and affordability of the private rented sector in some of the areas in which it might be needed. Although we understand the need for change, change is sometimes difficult, and we are worried that the future accommodation model is causing significant concern for both personnel and the families federations. There is real concern that the consultation was not carried out satisfactorily—let me put it that way at this stage.

The Armed Forces Pay Review Body’s 46th report highlights the need to maintain a clear line of communication with forces families about the FAM. It states that service families federations

“said that honest and clear communication around the implementation of the People Programme strands, especially the Future Accommodation Model, will be essential as housing is seen as a key element of the overall military offer, particularly for the Army.”

Hon. Members will be aware that the Department conducted a survey on the future accommodation model. The sample size was 137,000 and there were 24,302 valid returns, which represents a response rate of just 18%. Of those respondents, 42% had not previously heard of the FAM and a further 19% had heard about it but did not know anything about it. The Government surely cannot claim that a one-off survey to which fewer than a fifth of eligible respondents replied wholly represents the views of the armed forces, and they should not base significant policy changes on it.

I have a few questions. Given that the response rate for the FAM survey was so low, would it not make sense to re-run the survey with more detailed options and try to raise awareness of the future accommodation model ahead of that survey? Can the Minister tell us whether there are plans to run another survey at a later date when there are more details about the model? What is he doing to ensure that he takes into account a more representative cross-section of views? If there is concern about the cost of another survey, could it be run as an additional part of the armed forces continuous attitude survey or the families continuous attitude survey, which both had higher response rates last year than the FAM survey?

The Department has said that the FAM is not a one-size-fits-all policy, but as it has been presented so far it treats the three services exactly the same. We know that when it comes to housing, what works for one service may not work for the others. There is a big difference, in particular, between the situation for members of the Navy and that for members of the Army and the Royal Air Force. Army personnel are less likely to own a home—28% are homeowners—than Royal Navy or Royal Marine personnel, of whom 42% are homeowners. Being an owner-occupier makes a lot more sense for Navy personnel, because their jobs are more geographically concentrated and because of the particular housing markets in the areas where they tend to serve. Does the Minister think that a review of accommodation might present an opportunity to allow the individual services greater autonomy to deliver the housing that works for their personnel? Can he tell us whether the Department will let the services make the case for what will work for them, not just apply the new model across the board?

There are real concerns about the consultation, but I am also keen to hear what the Department is doing to examine the potential impact of the options on both cost and retention. On cost, the MOD told the Armed Forces Pay Review Body that

“whilst maintaining the total subsidy that Service personnel receive, FAM would deliver around £500 million savings over ten years…this will be delivered primarily through reduced running costs, capital receipts and savings.”

I am interested to know how the Department got to that figure when so few details about how the FAM will work seem to have been finalised. The Department said that

“the Future Accommodation Model will not reduce the total pot of money currently used to subsidise housing”

and

“the rental allowance would be adjusted so that no one loses out if they are required to work in more expensive areas”.

If the total pot is not reduced, there will clearly have to be some redistribution of funding away from some types of accommodation and towards others, particularly if some options are considerably more popular than others. What analysis has the Department done of the likely take-up of different options?

Furthermore, if servicemen and women increasingly move into the private rented sector, there is a strong likelihood of costs going up for either the Department, service personnel or both. The private rented sector is getting more and more expensive, with Savills estimating that rents are set to rise by 19% by 2021. Would a rental allowance rise with rental inflation? Most military personnel spend about 10% of their monthly salary on accommodation compared with civilians, who spend 30% to 40%. Will families see their costs go up, or will the Department make up the shortfall? A significant feature of the future accommodation model is increasing home ownership among service personnel. Of the FAM’s potential options, “Owning away from work” and “Owning near work” both mention the Forces Help to Buy scheme. Will the Minister confirm that that scheme will be extended beyond 2018?

The Army Families Federation’s “Big Survey” 2016 found that, when asked what they like most about service family accommodation, 74% of Army families said that they like living close to other service families and being part of a community, and 66% said that they like having access to service community support facilities such as the Army welfare service and unit welfare staff. We know that living in military communities can be really important for military families, particularly when partners or parents are away.

Similarly, the Army Families Federation asked families about their experience of living off the patch in substitute service family accommodation, and

“many commented on the impact of not living in a military community, leaving them feeling isolated and unsecure, sometimes living in a civilian community that did not understand the issues and challenges of military life.”

My worry is that families would face a similar issue in the private rented sector. They would not have the support network that they have on the patch, and the potential impact of that on morale cannot be underestimated; Opposition Members would have real concerns about a move towards greater use of the private rented sector. Those families would also not have the security that comes with service family accommodation. With no guarantees of tenure, landlords can put a property on the market with no warning, and 86% of respondents to the Army Families Federation’s “Big Survey” raised that lack of guaranteed tenure as a negative aspect of renting privately.

Military families with disabled members would have to look for properties that were already adapted or which had landlords willing to make adaptations, whereas SFA properties can be more easily and quickly modified. Perhaps most importantly, given that the Government’s Housing and Planning Act 2016 does not set a standard that all rental properties are required to meet, what are the safeguards against military families ending up in substandard properties?

We know that affordable, accessible housing is a vital component of the offer made to military families. The Army Families Federation’s “Big Survey” 2016 found that, if service family accommodation was reduced in favour of a rental allowance, 30% of those surveyed would definitely leave the Army, and a further 46% would consider leaving. Both the Armed Forces Pay Review Body and the Centre for Social Justice, in a report written by the hon. Member for Canterbury (Sir Julian Brazier), acknowledge that the future accommodation model will necessarily reduce the level of benefits that military families receive now, and are concerned about the consequences for retention and recruitment. Any future accommodation model must balance not just costs but the need to ensure that personnel feel valued and continue to see the armed forces as an attractive career option.

I will try to finish, Mr Walker. I am concerned that the Government are attempting to rush through what could look like short-term savings without considering the longer-term repercussions on the families of service personnel or the future ability of our military to recruit and retain staff. I would like to see improved consultation with individual services on their accommodation needs, greater scrutiny on the costs of the roll-out of FAM and improved safeguards to ensure that no military families feel isolated or lose out financially as a result of these changes. I look forward to hearing from other hon. Members on this important issue.

--- Later in debate ---

[Jeff Smith]

I thank the Minister for his comments and welcome the fact that he said that this is an ongoing debate and that he is prepared to listen to the concerns. This is an opportunity to influence. I urge him to reflect on the fact that the concerns have come from across the House. They are shared concerns, and I hope he will take that on board.

There are a number of questions that, understandably, have not been answered, and I look forward to receiving some written responses. I thank hon. Members for their contributions and for bringing their experience and knowledge to this important debate. As the Minister said, the debate will continue as we attempt, I hope with some consensus and collectively, to provide a solution that will work for our armed services personnel and of which we can all be proud, just as we are proud of their service to our country.

Question put and agreed to.

Resolved,

That this House has considered the Future Accommodation Model.