Future Accommodation Model

Julian Brazier Excerpts

Tuesday 18th April 2017 Westminster Hall

[Sir Julian Brazier (Canterbury) (Con)]

May I say what an honour it is to serve under your chairmanship for the first time, Mr Walker? I congratulate the hon. Member for Manchester, Withington (Jeff Smith) on securing the debate and on his thoughtful and interesting speech.

The House, and indeed the Minister, have heard me speak several times before on this subject, so I will be fairly brief. However, it is worth saying at the outset that we face some quite serious manning shortages in two of our three services. The Army is now 4.9% under strength on paper and, looking at the large rise in the number of people who are still serving but who have been medically downgraded over the past five years, the underlying trend is worse. The Air Force, on paper, actually has a slightly higher deficit than the Army, but the Navy has managed to stay within 2% or so of its target. Retention is a very big factor, but so are justice for, and the welfare of, our armed forces.

I have been a passionate believer in opportunities for home ownership for the armed forces for my whole political career. The only time I went to see Margaret Thatcher when she was Prime Minister—which shows how old I am—specifically regarded a scheme for home ownership opportunities for members of the armed forces; I did ten-minute rule Bills and the rest of it. I will try to set out now why I think the vision for home ownership in the future accommodation model is not quite right. We are essentially talking about a move towards two models—not a complete move, but a move away from service family accommodation as the main model and towards a system of allowances and owner-occupation.

The hon. Member for Manchester, Withington has already mentioned some of the complexities involved. We are not proposing to do as the Australians do, which is a very expensive scheme whereby its Department of Defence takes on houses in a community and all of the legal risks; it does the tenancy, maintenance and all the rest of it, and people move in and out as if they were in service family accommodation. The proposal that has been put forward, as originally announced, would leave people in a position whereby, at most, the Ministry of Defence might find a property, but after that the tenant would be responsible for the tenure, the length of which might not correspond with the length of their tour. If it is a rolling tenure, they can be thrown out with two months’ notice, and if it is an annual tenure, they will clearly have problems with renewals because their postings will not always tidily fit the years.

Above all, on maintenance, whatever the issues now— I pay tribute to my hon. Friend the Minister for his progress in driving up the quality of what we are getting out of the maintenance contracts from CarillionAmey—the reality is that, with the private sector, people would be on their own. Like the hon. Member for Manchester, Withington, I have had some very bad constituency cases. For soldiers on operations, such as airmen flying in Iraq, if their family’s boiler breaks down or roof leaks and the landlord does not want to know, they cannot go to their commanding officer because Defence would not have a say in it.

The hon. Gentleman mentioned the importance of morale when troops are away, not only on operations but also often on extended exercises abroad and so on. When we still had Howe Barracks in Canterbury, I remember canvassing there and meeting a little boy kicking a football with his friends. His father had just been shot the previous night by a sniper in Iraq. The fact that he was there with all his mates, whose fathers were all subject to the same risk, was an important part of the supportiveness that the military estates provide.

I am also puzzled—I hope my hon. Friend the Minister will say something about this—as to whether we really are serious about moving people out into the community. The places we seem to be moving out of, such as Canterbury, Ripon, Chester and Maidstone, have affordable accommodation in the community and good employment prospects for wives, but we are expanding places like Catterick, and keeping open places like Lossiemouth—for at least 15 years or so—where there is very little of either.

This knocks on to the armed forces covenant. I pay tribute to the work that my hon. Friend the Minister has done on the covenant. One thing to come out of that is that we have persuaded councils to remove the local requirement in the case of service families for housing, so that if a serviceman or servicewoman is serving in an area and does not have a local connection beyond the fact that they have been posted there, they will still be eligible to get on the housing list when they come out. However, as we increasingly focus on super-garrisons, I cannot see how that can continue. Are we really going to say that the council in North Yorkshire, which covers Catterick, will have to take on soldiers from that very large—and further to be increased—base, and that that is suddenly a problem just for the ratepayers in that one small area?

I do not think that a move towards an allowance is a good idea. I do not have an ideological objection to having allowances for some fringe cases, so that we can manage the housing stock more efficiently, and some people would occasionally have to wait for a short time in a hiring on the way in. However, we have debated this before, and I cannot see how a needs-based allowance will deliver this for the officer corps.

We are critically short of young majors, and captains becoming young majors. They are roughly the same group as pilots coming up to the first breakpoint. These are the most expensive people in the armed forces in many cases and the people we most need to run the system. They are the people who, in many cases, have not yet started their family; they are perhaps married but do not have children yet. They will end up with a very small allowance, rather than good-quality married quarters that are compensation for the penalties of service life, including the lack of spousal employment in many cases.

As I said at the beginning, I am a passionate believer in home ownership. I certainly do not believe it is fair at the moment to have a situation where the Army, and to some extent the Air Force, are so gravely disadvantaged. I urge my hon. Friend the Minister to consider that promoting owner-occupation is not the solution for the Army and the Air Force. It means that if someone is posted in an area where there is no affordable local housing or housing on a scale where large numbers of people could buy it without driving the house prices up, they are then outside it.

If we start to reduce the subsidy for married quarters—as we increasingly did in the last review, when 81% of rents went up—but provide extra allowances for people who are owner-occupiers, the people in service life who suffer least from it are the very ones who will then get the most benefit out of it; one could mention a couple of examples. For example, if someone is living in RAF Waddington, which is one of a very small number of airbases on the edge of a big city—in that case, Lincoln—where there is plenty of spousal employment and plenty of affordable housing, they will be able to do very well out of it. If someone is living in Colchester, they will be able to do very well out of it; that is one of the few Army bases where that applies.

However, the people who are paying the extra rents and losing are those who are living in the Cattericks of the world or in Aldershot, where there is lots of housing but it is too expensive for them. It is the people living in remote places such as Lossiemouth or the instructors at RAF Valley and the infantry training school at Brecon. Those are crucial people who do not have affordable housing there, and who in many cases have very little opportunity for spousal employment. They cannot go down an owner-occupier route.

If we want to provide a fair route to getting a foot on the housing ladder, it must not be tied to owner-occupation. It has to be available for a mixture of different tenures, so that if someone happens to be living near a house and at one point in their career lives in it, they can let it the rest of the time. Unfortunately, if someone does that at present, they will be hit by the Chancellor’s new landlord tax when they let it.

I know that the Minister is starting to free it up a little, but the rules are still pretty dour at the moment. If someone has taken out a forces help to buy loan, they have to apply for permission to let the house to anybody. Looking at the small print, that is not a commercial risk I would want to take on. So yes to home ownership for getting a foot on the property ladder, but no to tying it to owner-occupation.

I want to reinforce what the hon. Member for Manchester, Withington said and what my hon. Friend the Member for Berwick-upon-Tweed (Mrs Trevelyan)—I am glad that she will be speaking shortly—has been saying for a very long time about the survey carried out on the future accommodation model. For my sins, I am a graduate mathematician, and I worked as a professional statistician. It cannot be said too often that a self-selected sample is not a sample. The problem is not that one fifth is not enough. It is easily big enough if it is a sample, but this is not a sample; it is a self-selected sample, which is very different. If only one fifth choose to fill in a survey, they are not representative. Any polling organisation —I know that one was involved in this survey—should advise that.

I have a print-out here of the first page of the survey website. After the note on privacy at the beginning, the very first words read:

“Service personnel are dissatisfied with the current accommodation system and it is becoming unaffordable, so the MOD is thinking about accommodation options for the future—the Future Accommodation Model.”

From the word go, the scene has been set to encourage people to support change. The current option is not actually given as an option anywhere. There may be more, but on flicking through quickly I found no less than 10 references to opportunity for home ownership. However, nobody says that the number of postings that are near affordable housing will be reduced; that is not mentioned. Nor does it tell people that there will be an extra tax if they buy a property and let it.

Group after group have hints that they will get extra allowances out of this. We are told that it will be extended to the unmarried. There is a very strong case for that, but will it include children from a previous relationship? It will become very expensive if it does. That is not made clear, but that is one group of people to whom it could apply. There is a hint that people might get more help with their mortgages. As we go through, it is suggested that more money may be available for area after area. It does not actually spell out that if the thing is to remain affordable, we will end up potentially with higher rents and other issues for those who are still in married quarters, unless money can be found elsewhere. There is just one comment at the very beginning about this being within a fixed budget. As we go on, we can see why more and more people thought this was nirvana coming.

I will end by saying that I have the highest respect and regard for my hon. and gallant Friend the Minister. We worked together, which I very much enjoyed. I know he is deeply committed to the armed forces. Indeed, he has served for nearly 30 years in what was the Territorial Army. I share his vision that we need to find routes to home ownership for people in all three services; there is a perfectly good one for the Navy at the moment. However, I urge him to think again about whether owner-occupation is the right way for the Army and Air Force and to ask himself whether moving towards a needs-based allowance and away, in many areas, from SFA will maintain a happy and effective Army and Air Force.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Defence (Mark Lancaster)]

Mr Walker, it is a pleasure to serve under your chairmanship for what I sense will be the last time this Parliament, although we shall see.

I start, of course, by congratulating the hon. Member for Manchester, Withington (Jeff Smith) on securing this debate, which provides us with another vital opportunity to discuss the future accommodation model. It is vital because the welfare of our service personnel is the basis on which we build a world-class armed forces, able and willing to take on the threats and challenges of these volatile times. Getting this matter right is absolutely in all our interests. Let us be honest—we have not always done that.

As I have said previously, nobody is under any illusions that successive Governments’ records on service family accommodation in recent years have been an unqualified success. Indeed, issues with CarillionAmey, which several hon. Members raised today, have been well-documented. Nevertheless, I am grateful for the comments made by my hon. Friends the Members for Canterbury (Sir Julian Brazier) and for Berwick-upon-Tweed (Mrs Trevelyan), and others, which show that there is at least an acknowledgement that we have made progress in recent months. There has definitely been an improvement, but I am not remotely complacent. Much more needs to be done and I reaffirm my previous statement that if CarillionAmey does not perform on its contract, it will be replaced.

Equally, a number of detailed questions were put to me today and I will do my best in the time I have available to answer many of them. As ever, with some of the more technical questions, I will endeavour to write to hon. Members in the shortened timeframe we now have before this Parliament dissolves; I am sure that my officials will work especially hard to try to get those answers for me as soon as they can.

However, I will start by gently making just one point. The hon. Member for Manchester, Withington basically said that he felt this process was being rushed; I would argue that it is anything but. Absolutely no firm decisions have yet been made, and this debate is yet another valuable opportunity for colleagues from all parties to contribute to this process and influence it. We do not anticipate coming to any firm conclusions, or rather that the next Government will not come to any firm conclusions, until probably the end of the year, with a trial not starting until the end of 2018, and a move to a new model will probably not be completed for perhaps 10 or even 12 years. With respect, that is hardly a rush.

The focus of today’s debate is not the past but the future, and in particular our intent to ensure that, when it comes to service family accommodation, we move with the times in a way that is logical and beneficial for all. As our troops return from Germany and we look to rationalise our estate, there is an unprecedented opportunity for us to do just that, by taking the opportunity to modernise the way we provide housing for our people, making it fair, flexible, and affordable.

Our future accommodation model is the mechanism for achieving that goal. Its benefits are not well understood —I accept that—and there are many myths and misconceptions shrouding it. However, before I hopefully go on to debunk the most prominent of those, I should start by explaining why the FAM will be a vast improvement on what has gone before.

Equally, however, in response to the comments from the hon. Member for Strangford (Jim Shannon), I must say that I believe that across the House there is a will to provide a workable, practical and sensible solution for our armed forces personnel. Indeed, this may well be one of the last points of unity that we find over the next seven weeks as we head towards the excitement of the general election in 51 days’ time. As I say, there is a will to try to get this matter right and although, judging by his comments, my hon. Friend the Member for Canterbury may feel that we are on different sides of this argument, I am not sure that we are. This is all about delivering choice rather than prescribing to our service personnel what they will take. Also, let us not forget that some 20% of our service personnel opt out of the system and get absolutely nothing, which cannot be right.

First, I want to see a system that will be fairer, reflecting the societal norms of the 21st century rather than those of some bygone era. Let me give just one example. Currently, a married senior officer will be assigned a four-bedroom home, even if he or she has 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. How can that be right? If that service person moves out into the private sector to live with their family, it could cost them well over £1,000 every month.

The absurdity of this state of affairs becomes all the more apparent when one reads the testaments of the men and women whom it affects, such as the Royal Navy sailor who wrote to tell me how he cannot live with his girlfriend, even though they have been in a relationship for several years and have children together, or the couple forced to live apart because they are not married, or the father forced to live as a visitor with his own family. We cannot turn a blind eye to these situations any more. So, under the new model, we are committed to ensuring that provision is based on need.

However, FAM will not only seek to redress inequity but to be far more flexible than the current model, and flexibility is the key. The current model is failing to keep pace with modern life. What our service personnel want today—indeed, what they need—is choice and stability. They want to be given the choice of how to live, where to live, and with whom they want to live, and to be near the schools of their choice, to own their home and to provide their partners with stability and employment opportunities. Currently, however, our personnel must like what is on offer or lump it and, if they choose to go it alone, we cut the purse strings and they get nothing—no assistance, financial or otherwise, from the Ministry of Defence. That does not make sense and it needs to change.

We have made a start, through our forces Help to Buy scheme, which has so far helped more than 10,000 service personnel, but we have to go further. Under the proposals being considered as part of the future accommodation model, service personnel will be better supported to make their own decisions, and will receive our support regardless of where they choose to live.

The final point in this section of my speech is that the future accommodation model will be affordable. The current offer is inefficient and increasingly unaffordable. At present, we spend more than £800 million a year on accommodation, and that is set to rise, but a fifth of the personnel do not benefit from it. FAM will make savings by reducing management overheads, reducing further spending and stamping out inefficiencies. Let me make it clear—in case hon. Members are in any doubt—that savings will not be made through reducing the effective subsidy that personnel receive. This is about doing away with inefficiencies, such as the 10,000 or so MOD properties that currently sit empty. How can it be right for the taxpayer that we have those properties, all of which take money to maintain and currently serve no purpose because they are empty? We now try to rent them out when we can, getting an income that is reinvested, but we must keep a number of them empty, and rightly so, to try to always have ready what we say a service family should live in.

The intent is clear: we want a model that is fair, flexible, affordable and fit for the 21st century. That is our steadfast intention, but exactly how we get there is still being carefully considered and debates like today’s are feeding positively into that. To give just one example, the point has been raised with me before that even though we are moving to a system based on need there should be certain appointments that absolutely maintain a property: a commanding officer probably should have a property that goes with the appointment because of the wider needs of his role. We are looking at the various options to ensure that that is possible but, as I have said, at this stage no final decisions have been made. Nothing is set in stone. Ideas and plans will continue to evolve as we assess policy options over the coming months. Towards the end of the year we should be able to give more certainty about what the future policy will look like, but it will be important to continue engaging with service families to get the detail right, and we will eventually test policy in the real world with several pilots towards the end of 2018. I cannot at this stage give the exact details of what shape those pilots will take, but hope to do so shortly.

Crucially, our people will remain at the core of the decision-making process. We are listening, and will continue to listen, to service personnel, their families, family federations and other organisations. For instance, since we last debated FAM in Westminster Hall in October 2016, the FAM survey results have been published, with more than 24,000 servicemen and women responding and giving us their views on the model, indicating their housing preferences and needs. Hon. Members made some criticism of the survey in their contributions, and I shall attempt to address that, but it is interesting that this did not include cases in which the survey produced information that supported their points. None the less, I agree that it was a self-selecting survey and will be subject to response bias, but that has been recognised in our use of the results, which we have combined with many different sources of evidence. It is, after all, only one source of evidence. We tried to find a balance between giving enough information to inform a response and not putting in so much that we made it too complex. Crucially, I can say, as a statistician, that because of the number of responses, the survey gives a 99% degree of confidence that broadly—[Interruption.] I can see that my hon. Friend the Member for Canterbury is itching to intervene. I have provoked him.

[Sir Julian Brazier]

A sample of 24,000 would give an exceptionally high level of confidence but, as I stressed earlier, this is not a sample—it is a self-selected group. I am sorry, but the claim of 99% just does not stand up.

[Mark Lancaster]

My hon. Friend has made that point twice and I take it firmly on board. I will respond only by saying that the survey is one of several sources of evidence we are using.

It is because of the views of service personnel and suggestions made in this Chamber last October that we have looked in more detail at how personnel should be supported in the private market, at how service families accommodation might be a bigger part of the future model and at how we assess the potential impact on retention and operational effectiveness—matters raised by several hon. Members. Later this year, we will visit garrisons, air stations and naval bases to talk to service personnel about the model, to ensure that they understand what it could mean for them, to inform them of the opportunities that lie ahead and to listen to their feedback.

Much remains fluid as we continue to seek the most expedient solution for all involved but, despite our best intentions, that fluidity has resulted in speculation, concerns and incorrect assumptions that must be quashed, and I turn briefly to those now. First, we are not getting rid of all service family accommodation and single living accommodation. That could not be further from the truth. Single living accommodation enables rapid mobility of personnel, offers good value for money and delivers a unique service not seen anywhere else on the private market, so we will be keeping it. Likewise, we recognise and value the additional support to service personnel that service family accommodation provides. Decisions on the quantity of retained service family accommodation will be based on the local private market, demand, value for money and operational needs. Those factors will be at the forefront of our minds during the decision-making process. I encourage all hon. Members to go and look at the nearly 1,000 homes we are building around the Larkhill area if they want to see for themselves our commitment to service family accommodation.

Secondly—I said this earlier, but it is a point worth repeating—the £400 million effective subsidy that service personnel as a whole receive will not be cut. Thirdly, just as we do now, the MOD will shield our people from variations in rent across the country. From north to south, be it in Catterick, Northolt, or Andover, service personnel will have access to subsidised accommodation, and will make the same contribution for the property regardless of the geographic location and of whether it is service family accommodation or a private rent. In practice, that means that a service person in Yorkshire will contribute the same as one in Wiltshire, with the difference being covered by their allowance. What is changing is that we will move to a model that, for the first time, provides support to service personnel both in and outside of the wire.

We have had a well-informed and useful debate. Whatever our opinions on the finer points at stake, we should not lose sight of the overriding fact that we all share the same fundamental desire to ensure that those who serve us are well provided for. I reassure hon. Members that their views, and those of their constituents, will continue to shape our plans. Working together, I have no doubt that we will engineer a future accommodation model that will provide our people with the greater choice and stability they expect, deserve and need; as I said earlier, something that it is in everyone’s interests to get right.