Armed Forces Bill (Third sitting)

Debate between Mark Francois and David Reed

Select Committee stage
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.

--- Later in debate ---

[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.

Armed Forces Bill (First sitting)

Debate between Mark Francois and David Reed

Select Committee stage
Tuesday 24th March 2026 Public Bill Committees

[Mr Francois]

No, Mr Efford, and I was just going to say why not. I tipped my hand earlier and said that I probably would not press it. I will accept the Minister’s kind offer of a meeting to discuss the issues in amendments 11 and 12. I hope I have managed to convince the Committee that I have done my homework, if nothing else. I will not press either amendment.

[David Reed]

I beg to move amendment 13, in clause 2, page 6, line 37, at end insert—

“343AZC Armed Forces Covenant Action Plans

(1) Within six months of the passage of the Armed Forces Act 2026, the Secretary of State must make regulations requiring a local authority to which the Armed Forces Covenant duty applies to prepare and publish an Armed Forces Action Plan.

(2) Regulations under subsection (1) must specify that an Armed Forces Action Plan set out—

(a) the steps the authority intends to take to fulfil its duties under the Armed Forces Covenant,

(b) how the authority will assess local need within the Armed Forces community, and

(c) how resources will be allocated to support delivery of those duties.

(3) A relevant local authority must, at least once in each reporting period, publish a report on progress made against its action plan.

(4) In preparing an action plan and report under this section, a relevant local authority must have regard to any guidance or outcomes issued by the Secretary of State.

(5) The Secretary of State may issue guidance, including indicative outcomes or measures, for the purposes of supporting consistent implementation and assessment of the Armed Forces Covenant duty.”

This amendment would require local authorities subject to the Covenant duty to prepare and publish an Action Plan setting out how they will deliver the duty.

The amendment, which stands in my name and in the name of my right hon. and hon. Friends, would place a clear and consistent obligation on local authorities to produce an armed forces covenant action plan. At present, there is no standardised mechanism for assessing how local authorities are delivering their covenant duties, nor is there a consistent framework for evaluating the effectiveness of delivery in practice. The absence of such a structure makes it difficult to form a clear picture of how the covenant is being implemented across the country. Without a defined framework, delivery is likely to vary among authorities, a point that has been raised today in relation to other amendments.

Some local authorities, particularly those with an established focus on armed forces issues, may continue to provide strong and proactive support. They may already have effective partnerships in place with local services charities, good engagement with their armed forces communities, and a clear understanding of local need. In some areas, local authorities are already producing plans or strategies, often working closely with the local armed forces network and charities. The amendment would build on that existing good practice, rather than starting from scratch.

Other authorities, facing a wide range of competing pressures, may find it more difficult to give their covenant commitments the same level of attention. That is not necessarily due to a lack of willingness; rather, it reflects the reality of limited capacity and competing priorities.

The result can be a variation in provision across different areas, whereby the consistency of available support may depend in part on where an individual lives. That sits uneasily with the intention behind the armed forces covenant, which is to provide a consistent commitment to those who serve or have served and to their families. The amendment is intended to support the duty by helping to ensure that the covenant is delivered in a more consistent and transparent way at a local level.

In practical terms, the absence of a structured approach presents some challenges. First, it can limit the ability of local authorities to assess the scale and nature of their armed forces community. Without a clear expectation that information will be gathered and analysed, there is a risk that need will not be fully identified. That may relate to housing, access to healthcare, employment support or the specific needs of service families who move frequently. It may also include the needs of veterans who are less visible and are therefore less likely to come into contact with services unless there is a proactive effort to reach them. If need is not clearly understood, it becomes more difficult to design services that respond effectively.

Secondly, without a clear planning framework, resource allocations can become less strategic. Decisions may be taken on a reactive basis, responding to immediate issues as they arise rather than being guided by a longer-term assessment of the need. Given the financial pressures facing local authorities, that is understandable. However, it increases the risk that covenant-related activity will not be prioritised consistently, particularly when it is not clearly set out alongside other statutory responsibilities. A more structured approach would allow better co-ordination of support between services, including housing, healthcare and employment support, where needs often overlap and require a joined-up response.

Thirdly, the absence of a requirement to set priorities or to publish reports on progress makes it harder to assess how covenant duties are being delivered in practice. It becomes more difficult for central Government to understand what is happening at a local level; it is also more difficult for local stakeholders, including service charities and armed forces families, to see what support is available and how it is being developed. Those issues were reflected in earlier evidence sessions, in which concerns were raised about the lack of consistent metrics and the difficulty of comparing delivery between authorities.