Lord Docherty of Milngavie

The Defence Housing Strategy review team assessed a range of organisational and delivery models to identify the approach best able to improve outcomes for Service Personnel and their families, deliver value for money, and support the long-term renewal of the Defence housing estate.

The assessment, which is summarised in the published Defence Housing Strategy, found that transferring Defence housing to a housing association would be most likely to delay improvements, increase costs, reduce operational effectiveness and undermine Crown tenancy arrangements. Additionally, expert financial advice indicated that borrowing through the private sector, outside the public sector borrowing limits, was not a feasible funding route.

The Defence Housing Strategy recommended establishing the Defence Housing Service as a professional, arms-length organisation focused on the specific needs of Service Personnel and their families and that the direct partnership with the military to support this can only be achieved within a public body. The Government supported this recommendation and is progressing legislation to create the Defence Housing Service through the Armed Forces Bill.

The Ministry of Defence will publish its delivery timeline for the £9.2 billion Defence Housing Strategy over the next 12 months, in direct alignment with the National Audit Office recommendations. The revenue and capital budget allocation will be further refined to meet our commitments for the Defence Housing Strategy.

The total cost of the 2024 repurchase of 36,347 Service Family Accommodation properties from Annington Property Ltd, was £5.99 billion with additional transaction, advisory and legal costs of £ 6.6 million. The accounting for Annington Deal was completed in financial year 2024-25 in Ministry of Defence (MOD) accounts. How it was accounted for in national accounts is a matter for His Majesty’s Treasury.

Eliminating the liabilities associated with the leases created budgetary headroom to partially fund the purchase, meaning that the public expenditure impact of the measure, and the impact on public sector net debt, was confined to £1.7 billion. There is no debt in the MOD and therefore no debt to transfer to the Defence Housing Service.