Armed Forces Bill (Third sitting) Debate
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Mark Francois
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Armed Forces Bill (Third sitting)
Mark Francois Excerpts(1 day, 8 hours ago)
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The Chair
Before we continue line-by-line scrutiny of the Bill, I have a few reminders for the Committee. Please switch off or silence electronic devices. No food or drink is permitted during the sitting, other than the water provided. Hansard would be grateful if Members could email their speaking notes or pass them to the Hansard colleague in the room.
I remind Members to bob to catch my eye if they wish to speak in any debate. The selection list for today’s sitting, which is available in the room and on the Parliament website, shows how the clauses, schedules and selected amendments have been grouped for debate.
I also remind Members that amendments may be tabled during the recess. Amendments for consideration on 14 April, our first sitting after the recess, must be tabled no later than 4.30 pm on Thursday 9 April. Amendments for consideration at the sitting on 16 April must be tabled no later than the rise of the House on Monday 13 April.
Clause 3
Defence housing and other property
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.
Al Carns
I can say that we are working flat out on the absolute shambles we were left by the Conservative party. I can also say, as the Defence Secretary said in the House, that £9 billion will be allocated to the Defence Housing Service. The study has been completed. It is a very effective strategy. It has taken into account a lot of the other details that were excluded in the past. It has pulled them all together and has put in place a comprehensive strategy that will be funded.
Mr Francois
I am not saying that in 14 years we got everything right, but we never ended up in a situation in which we could not put a destroyer to sea, to a NATO exercise, with three months’ warning. It was never that bad.
I was told at a dinner last night that the Secretary of State or other Ministers have not allowed this Minister to see the defence investment plan. Surely that cannot be right: he must have seen it. For the avoidance of doubt, could he just pop up and tell us that of course he has seen it, and he has seen the detail of it?
Al Carns
My role, when it comes to defence investment, is primarily linked to uncrewed systems. I have been pushing as hard as I can to ensure that there is significant resource and consideration of not just the delivery of capability, but training, tactics and procedures, and the inculcation of drones and autonomous systems into our armed forces.
Mr Francois
We all know how this works. That was what, in “All the President’s Men”, they would have called a non-denial denial. I am afraid we have had no satisfaction, so we will press amendment 17 to a vote.
Question put, That the amendment be made.
Mr Francois
I beg to move amendment 14, in clause 3, page 7, line 26, at end insert—
“(e) improving the satisfaction of service families with the accommodation provided.”
This amendment would make improving customer satisfaction a specific objective of the Defence Housing Service.
The Chair
With this it will be convenient to discuss the following:
Amendment 3, in clause 3, page 8, line 16, at end insert—
“(6A) The standards in subsection (6) must at a minimum meet the 2006 decent homes standard.”
This amendment requires that the framework agreement governing the new Defence Housing Service must at a minimum meet the 2006 decent homes standard.
Amendment 4, in clause 3, page 9, line 12, at end insert—
“‘2006 decent homes standard’ means the document called ‘A Decent Home: Definition and guidance for implementation’ that was published by the Department for Communities and Local Government on 7 June 2006.”
This amendment defines the 2006 decent homes standard and is consequential on Amendment 3.
Mr Francois
The purpose of amendment 14 is to make improving customer satisfaction a specific objective of the Defence Housing Service. I will attempt to give credit where it is due. For context, the quality of service quarters, and in particular the maintenance of those quarters—especially maintenance of boilers and heating, dealing with mould, and suchlike—has been a constant bugbear for many service personnel and their families for decades. It is something that I went into considerable detail about in the “Stick or Twist?” report in 2020, to which I shall refer in more detail later this morning.
The previous Conservative Government entered into a new housing management contract—the future defence infrastructure services programme, or FDIS—prior to the last general election. It is probably fair to say that there were quite a number of teething problems when that contract went live. Indeed, I expressed a number of reservations about FDIS in the “Stick or Twist?” report before it came in.
However, the information I have is that after persistent pressure from Ministers—initially Conservative Ministers, especially my hon. Friend the Member for South Suffolk (James Cartlidge), and now Labour Ministers, including the Minister on the Committee, to give credit where it is due—the performance of contractors under the FDIS contract has improved. We heard as much from the families federations—from the customer side of the equation, as it were.
It can also be seen in the ratings, which are recorded annually in the armed forces continuous attitude survey, or AFCAS, which allows us to track customer satisfaction with the quality of maintenance of SFA. There is a specific question on that every year. Again I give credit where it is due for the introduction of a charter for the homes of service personnel and their families. Of course, it is the families who have to put up with the frustration of any failures, particularly if their loved ones are deployed away from base for any operational reason for any period of time. The families back home have to deal with the problems on a day-to-day basis, so if it is getting better, that is clearly to be welcomed.
Clause 3 sets out a number of objectives for the Defence Housing Service and its functions, including
“(a) improving the supply and quality of defence housing,
(b) managing land or other property used (or formerly used) for defence purposes,
(c) securing the regeneration or development of such land or other property, and
(d) supporting in other ways—
(i) the creation, regeneration or development of service communities, and
(ii) the continued wellbeing of those communities.”
I am sure that no one on the Committee will object to any of those objectives. But given the history I just outlined, the essence of amendment 14 is to introduce a fifth objective:
“improving the satisfaction of service families with the accommodation provided.”
Although I have no doubt that those who came up with the proposed Defence Housing Service fully intended to do this, the aim of the amendment is to place that objective firmly on the face of the Bill and, in so doing, establish it as an additional, clearly defined objective of the Defence Housing Service. Then, with the customer charter and assuming that we continue to ask similar questions in the armed forces continuous attitude survey every year, it should be possible to use that objective as an accurate metric to establish whether or not the Defence Housing Service is actually meeting one of its declared functions.
If we amend the Bill as I am suggesting, we could use it to hold the management of the Defence Housing Service and, I dare say, Ministers to account for the performance of the new service. It seems to us that this is quite a common-sense way to proceed. Therefore, I rather hope that the Minister will be prepared to accept this amendment without my having to divide the Committee.
Mike Martin (Tunbridge Wells) (LD)
It is a pleasure to serve under your chairmanship, Mr Efford. I rise to speak to amendments 3 and 4, which my hon. Friend the Member for North Devon and I have tabled. Amendment 4 is consequential on amendment 3, so I will speak about them together.
What we are talking about here is a sensible proposal. Indeed, the Government and the Lib Dems have already had many discussions on this proposal, and the Government have already accepted it in a related area of law. I therefore hope the Minister will treat it as a tidying-up exercise on which we can all agree.
Amendments 3 and 4 seek to enshrine the decent homes standard as the minimum standard for the Defence Housing Service. The decent homes standard has been in law for about two decades, and the Government recently incorporated it into the Renters’ Rights Act 2025. Of course, that takes us to the whole point of the armed forces covenant, which is to make sure that service personnel are not prejudiced in any way by their service. If the decent homes standard is good enough for civilian renters, it follows, if we are to apply the covenant as intended, that service personnel should also be afforded the same standard.
What is the decent homes standard? Anyone who has served, as I have, has at some point in time been housed in accommodation that is just beyond belief. I spent some time in accommodation that was actually condemned, which meant that no money was being spent on it because it was going to be demolished at some unspecified point in the future, but I lived in it for the entire time I was there.
At that time, I was single, but of course it is not just those who serve who expect to live in decent homes; their families expect to, as well. In a minute, I will refer to the continuous attitude surveys and what service personnel feel about their service accommodation. However, it is often the pressure on their family—their wife or husband, and the children—that make service personnel think, “I can deal with this, but I do not want my family to have to deal with it.”
What is the decent homes standard? As originally defined, it refers to a home being in
“a reasonable state of repair”.
Obviously, if that standard were applied, it would immediately outlaw things like damp. It also says that a property should have modern “facilities and services” and provide a reasonable degree of “thermal comfort”, so we would probably expect double glazing, rather than the single glazing that I had, although it was 20 years ago.
A more recent document published by the Ministry of Housing, Communities and Local Government in January sets out the new decent homes standard. Amendment 3 seeks to enforce the original 2006 standard, because the document published in January is a White Paper and is not yet Government policy. The new decent homes standard seeks to reflect things like modern energy efficiency standards, as we would expect.
This does not seem much to ask, and the Lib Dems pushed for it during the passage of the Renters’ Rights Act. The Government originally voted against it on Report, but then they made the amendment to the legislation. I am not presenting that to the Committee in a partisan way; I merely want to say that we have already had this discussion, and the Government have accepted that it is the appropriate standard for civilian renters. Service personnel are also renting—they pay money for their accommodation, so they are renting—so the standard should be reflected in their housing.
What do service personnel say about their accommodation? I accept that it has improved, as the right hon. Member for Rayleigh and Wickford said, but there are still problems. Let me give the Committee a few statistics. One in five personnel plans to leave the armed forces, and 25% of those cited the standard of accommodation as a reason for leaving. At a time when we have a retention crisis, it seems that we should be focusing on that. I know the Government are focusing on it, and in tabling this amendment we are trying to help them to fix the problem. Of the 78% of service personnel who live in service accommodation, only half—51%—remain satisfied with the state of their housing. So there are problems, although improvements have been made.
Under the Renters’ Rights Act, which was amended to include the decent homes standard, the MOD was mandated to report to Parliament on the state of service housing. The idea was that it would gradually move defence housing stock up to the decent homes standard. Of course, the problem with how it was laid out in the Act is that no targets or timelines were set, so although the MOD reports to Parliament, there is no way for Parliament to hold the Government to account on the attainment of that standard for service personnel.
Amendments 3 and 4 seek to put that accountability in place and ensure that the MOD has to achieve the standard. When it reports to Parliament, the amendments would ensure there is a mechanism by which Parliament can hold the MOD accountable for attaining the standard for service personnel.
Mr Francois
I declare an interest: in the 1990s, I was the acting chairman of housing on what was then Basildon district council—so I was a housing specialist, but admittedly back in the last century. Incidentally, Basildon was once described as the only local authority in Britain where, at council meetings, councillors actively heckled the public gallery. From serving on the council, I can say that it is half true.
The hon. Gentleman mentioned a number of features of the decent homes standard. What in his opinion are the critical two or three parts that, if we were to support his amendment, he would have the Government and the Defence Housing Service ensure above any others? What are the key two or three bits that he would like to press the Government on this morning?
Mike Martin
The decent homes standard, as set out in legislation, is a set of principles that can be enforced by the courts, and the courts will make the judgment. When we talk about modern facilities and services, for example, we are talking about what the courts would view as being modern and reasonable. I come back to the fact that we would probably expect double glazing, not single glazing. We would expect central heating, not individual electric fires. We would expect no damp. We would expect a carpet that does not have holes in it. Those are things that the courts would accept as reasonably approaching a decent homes standard, and as reflecting a reasonable state of repair and thermal comfort.
I will conclude now, Mr Efford. Thank you for your patience. What we are seeking to do here is a tidying-up exercise to support the Government in their aim to set service personnel and civilians on an equal level and make sure that service personnel and particularly their families are not prejudiced as a result of their service. If a decent homes standard is good enough for civilian renters, it is good enough for service renters.
Al Carns
I believe that amendment 14, moved by the right hon. Member for Rayleigh and Wickford, is unnecessary. It is clear that the Defence Housing Service will have a service ethos at its heart, and we are already way ahead on that. The Committee heard from representatives of the families federations during the evidence sessions, in which Cat Calder from the Army Families Federation said that during the course of the defence housing strategy review, it was
“very much engaged with, listened to and questioned”,
and its views “taken into consideration.” That will continue as the defence housing strategy turns to the Defence Housing Service and the implementation of changes across the entire estate.
I welcome the right hon. Member’s comments about the FDIS statistical change. When I first took over this job, I visited multiple defence housing providers and, indeed, the houses themselves. I line-by-lined the cost of everything from a plunger to the taps to make sure we were extracting the best value for money from those contractual services. The trend was already moving, and I believe it has moved in the right direction. There is always work to do, but we have our foot on that pressure point and will ensure we extract best value for money and best time when it comes to the delivery of services for our families in service housing.
Importantly, throughout the development of the defence housing strategy, families have been at the very heart of the discussion to ensure that their views are considered, along with the differences between the way of life and operational priorities of the Army, RAF and Navy. That is why we have set up a new customer service committee with representatives from all three forces’ families as members. The Defence Housing Service will have a service family representative on its independent board.
We are already making rapid improvements after many years of ebbing and flowing standards and service in military accommodation, and we have delivered our consumer charter commitments to improve our families’ experiences. That includes transforming 1,000 of the worst homes by Christmas with new kitchens, bathrooms and floors, which the Committee will know from its visits were previously in a shoddy state. Some are still in that space, but we are moving rapidly to change it.
We are modernising outdated policies, giving families greater freedom to improve their homes, and streamlining processes for those who wish to run businesses from home or simply have a pet. We are also delivering named housing officers, as it is critical to have a central point of contact to make complaints to, or to demand better services, as well as delivering photos, floor plans and a new online repair service.
Mr Francois
This might seem like a point of detail, but it is important. I will come on to “Stick or Twist?” later, but one thing that came out very clearly is that many families wanted what used to be known in old money as “patch managers”, often a retired senior NCO who lived nearby, who knew the patch and all the quarters intimately. He knew that No. 23 had always had a slightly wonky boiler or whatever. He was someone that all the families knew, and who the wives could get hold of if their spouse was away on deployment. We have named housing officers, but at what level do they operate? Do we have one per patch, per garrison or per region? How close to ground level are these named housing officers?
Al Carns
I will get back to the right hon. Member with the exact numbers of housing officers and how much patch they will oversee and manage, depending on the different service contracts. As he will be aware, the Army, Navy and Air Force approach it in different ways. Some have retired officers in a Reserve billet, looking after everything from welfare to housing. Others have specific housing officers, and some have none at all. There is a requirement to standardise that, hence the reason for housing officers coming in. I believe that housing officers work most effectively when they have either served or have an understanding of service. We are seeking to replace the single point of contact for families to go to should they have a problem with their housing or the facilities provided by the contractual arrangements.
On the promises that were made to families, it is worth noting that work is fully under way to deliver them under the consumer charter. We are also seeing results. Satisfaction in defence homes is rising: rates are now at 51%, their highest level since 2021. I would argue that that has resulted in an increase in both retention and recruitment, pulling more people into the military. We have seen a 13% increase in recruitment and an 8% reduction in outflow.
I have always been really honest that, in the short term, we are getting after this with 1,000 homes and the consumer charter, but that we will really see the benefits over the medium to longer term, with a complete rejuvenation of the estate. Satisfaction with repairs has increased steadily, from a low of 23% in January 2023 to 66% in 2025. In February 2026, we received 400 complaints, compared with a high of 4,200 complaints in November 2023, so we are making progress. We want to get that 400 figure down even further and will continue to endeavour to do so.
Amendments 3 and 4 propose to specify further in legislation the standards that accommodation should meet. I thank the hon. Member for Tunbridge Wells for his service and for his attention to ensuring that service family accommodation meets the standards that families rightly expect. The conduct and the candour of this debate have shown that we all want the same thing.
As part of the generational renewal set out in the defence housing strategy, we are already making rapid improvements, including through the new consumer charter for service family accommodation, which the Secretary of State announced last year, with the first set of those commitments delivered way ahead of Christmas. Through the wider plan set out under the defence housing strategy, we will be delivering improvements to nine in 10 defence family homes over a decade of renewal, delivering on the opportunity presented by the buy-back of the estate in January 2025.
In relation to the amendment tabled by the hon. Member for Tunbridge Wells, the MOD is already committed to meeting and publishing compliance with the standard. The defence housing strategy specifically addresses the issue and sets out that the housing standard should keep pace not only with the decent homes standard, but with wider housing safety requirements such as Awaab’s law.
Al Carns
If the hon. Member will let me, I will come back to him with a specific timeline for the process.
In reply to an earlier question, there are 122 housing officers in total, and the figure will increase over time. Each housing officer is responsible for 300 to 400 homes. Although the housing officer will be a specific individual in place, a lot of armed forces also have other welfare officers and facilities. However, this is a step in the right direction to providing a single point of contact.
Mr Francois
I am grateful for that detail. I agree that it is a step in the right direction, so it would be churlish not to welcome it. To give credit where it is due, when my hon. Friend the Member for South Suffolk was a Minister in the Department, he invested several hundred million pounds in what was known as the mould action plan. Its aim was to get after the problem not just with temporary fixes, but with long-term work on properties with a persistent mould problem. As I have tried to be fair to the Government this morning, I hope the Minister will acknowledge that my hon. Friend put quite a lot of effort into that issue in defence housing. There has subsequently been some success, has there not?
Al Carns
I agree. The mould action plan got after a large chunk of the problem. I know there was work that went on previously, including “Stick or Twist?” and other reviews, but now that we have got rid of the Annington deal and got control of our estate, we can take a far more strategic outlook. That is what the defence housing strategy is all about, so that we ensure that we get best value for money over a longer period and do not have to spend huge amounts in a short time, which unfortunately can result in poor contractual agreements and not the best value for money.
The mechanism for embedding the standards, as well as Awaab’s law, including any changes over time, has already been included in the Bill. It has been deliberately drafted in that way to provide a mechanism for capturing future changes to policy without requiring legislative change. As a case in point, the hon. Member for Tunbridge Wells specified the 2006 decent homes standard in amendment 3, but he will be aware that the Ministry of Housing, Communities and Local Government is already in the process of introducing a revised decent homes standard. The amendment, although absolutely well intentioned, is too specific. It would set in stone a policy position that would rapidly become redundant. Further mechanisms will ensure that we keep in line with the decent homes standard, such as providing a report into the system on, I think, a yearly basis—I will clarify that point in due course.
I reassure the hon. Member that in practice the Ministry of Defence already uses the 2006 decent homes standard as a benchmark for service family accommodation and will work to meet the new decent homes standard as it is introduced. The same applies to Awaab’s law, which is being taken forward through the consumer charter. As the generational renewal set out in the defence housing strategy progresses, we will aim not just to meet minimum standards, but to provide homes that any of us would be proud to live in.
The scale of the problem should not be underestimated. The defence housing estate was built at any time from the 1960s all the way up to the early 2000s, with single-skin walls and a plethora of issues. It will take a medium to long-term strategy to deliver real, meaningful change over time. The messaging to the armed forces and their families is that we are on this: we have assured the money and we will head in the right direction to improve defence housing over the medium to longer term.
I hope that the points that I have set out provide the necessary reassurance as to why amendments 14, 3 and 4 are not necessary and can be withdrawn.
Mr Francois
I appreciate everything that the Minister has said. None the less, we feel strongly about amendment 14, so we will press it to a vote.
Question put, That the amendment be made.
Mr Francois
I beg to move amendment 15, in clause 3, page 7, line 26, at end insert—
“(e) provide earmarked accommodation to facilitate “contact visits” for children of service personnel, who do not live with them (in accordance with any relevant court order).”
This amendment would make the Defence Housing Service responsible for providing accommodation to facilitate “contact visits” for children of service personnel who have separated, in accordance with any relevant court order regarding access.
My hon. Friends and I tabled this very specific amendment for two reasons. I remember that during my time as a Minister, which was more than a decade ago, when I visited Army garrisons, Navy facilities or RAF airbases and discussed service family accommodation, the issue often cropped up of providing accommodation for contact visits. In practice, that usually means providing SFA quarters that are ringfenced specifically to allow serving personnel to hire them temporarily, for example so that children who do not ordinarily live with them can stay with them on camp during a contact visit.
This is obviously still an issue. I recall it cropping up in conversation when the Committee visited Portsmouth. When we visited the patch, we were shown some houses that, from memory, still had diggers outside because they were about to be refurbished for exactly that purpose. That tells me that this is still a bit of a challenge even now. Incidentally, that example bears out the value of the Committee visiting to see and learn these things for ourselves. As the Minister reminded me, it was Napoleon who said that time spent in reconnaissance is seldom wasted. Our visit was a very good example of that maxim in practice.
Al Carns
I thank the right hon. Member for Rayleigh and Wickford for tabling the amendment. I absolutely recognise the importance of facilitating contact visits between service personnel and their families; there are people here with experience of that.
The reality is that as we have come into government, we have the wrong houses in the wrong place in the wrong amount. That requires a whole restructuring of our defence housing estate to ensure that it matches and moulds itself to varying requirements across the population.
I was a base commander, and we had several welfare houses. There is a joint service publication in MOD policy, JSP 770, that designates service family accommodation as welfare support accommodation. This is a joint process with local military commands and welfare services to provide housing for welfare requirements. It cannot simply be met with the responsibilities that the amendment seeks to set for the Defence Housing Service.
Moreover, there has to be flexibility in the use of welfare support accommodation to ensure that it can respond to local needs and local requirements, including other important welfare uses such as those relating to domestic abuse and safeguarding. It would be far too inflexible for it to be earmarked as accommodation solely for contact visits, as the amendment sets out. That would limit our ability to respond to urgent needs of other kinds.
More generally, the issue that hon. Members have highlighted is only one part of a much bigger issue that the Defence Housing Service is being set up to address, which is that the defence estate is wrongly configured as a result of the legacy of Annington and years of under-investment, with not enough homes in the right places to meet the requirements of service personnel.
The focus of the Defence Housing Service is to improve existing homes and create thousands more, including by delivering widened access to accommodation for modern families. Its progress against that will be set out for Parliament to scrutinise through the annual reporting process. The defence housing strategy team looked at the issue as part of its review. An important conclusion of the review was a recognition of the important role that local welfare-based discretion plays in managing service personnel’s housing needs, which cannot always be planned from the centre.
The reality is that welfare houses provide a capability for a plethora of needs, from supporting individuals who have been subject to abuse all the way through to providing a comforting environment for families who have broken up or separated and need a place to live and thrive with their children. To narrow them down to one use may not meet the local requirement, but I absolutely support the premise and the positivity behind the amendment. Given the clear and comprehensive arrangements that are already in place, I see the amendment as unnecessary.
Mr Francois
I appreciate the spirit in which the Minister is replying. I have learned to take his word. Just so he does not think that we have a blanket policy of voting on everything this morning, if he gives me his word that he will take the issue back to the Department and the people setting up the DHS and look very seriously at how we might do a bit better, in return I shall not press the amendment. Can he give me that comfort now?
Al Carns
It is absolutely right and proper that we do that. I would like to go a step further: we could probably organise a sit-down with Natalie Elphicke Ross and the team at the Defence Housing Service. It has already been thought through, but they can explain it. If the right hon. Gentleman has any insight into how he would improve it, or indeed any reflections from his own experience of the defence estate, we will take that forward. I therefore ask him to withdraw the amendment.
Mr Francois
I will not look a gift horse in the mouth. I thank the Minister for his kind offer, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mike Martin
I beg to move amendment 2, in clause 3, page 8, line 13, leave out “service family accommodation” and insert “defence housing”.
This amendment requires that the framework agreement governing the new Defence Housing Service pertains to all defence housing.
Al Carns
The requirements are different for SLA and family accommodation, but we both want the same thing: the best accommodation, whether for a family or a single person living on base, either separated from their family or single. What I can offer the hon. Member is to engage and talk him through the single living accommodation strategy as it builds, so he can ensure his points are included and we either fill the knowledge gap or make the strategy reflect the intent of providing the best accommodation for single individuals outside the family setting.
Mr Francois
It may assist the Committee to know that when I looked at this in “Stick or Twist?”, we realised that we were talking about two slightly different propositions, and that some of the challenges in single living accommodation are a bit different from those in SFA. For the record, in “Stick or Twist?” we said we would start with SFA—we were talking about a housing association—and learn lessons from that and then go on to SLA. We realised there is a bit of an air gap between the two, so our work was concentrated on one and then maybe moved on to the other. That is, in some ways, similar to the spirit of what the hon. Member for Tunbridge Wells is saying, if the Minister will accept that.
Al Carns
I completely accept that. There are just nuances and differences in the requirements, and that will be reflected in the outcomes of both reviews. Again, I offer that engagement—if the hon. Member for Tunbridge Wells would like to get involved and ensure that his points are made as the strategy is built, he can affect the output as required.
The Government believe that a dedicated focus on the Defence Housing Service and family accommodation is the best way to achieve the step change needed for defence, specifically on family homes. We will continue simultaneously to drive up the standard of single living accommodation, and further detail will be set out in the next steps following the ongoing SLA review. If it is any consolation, I lived in single living accommodation for a large chunk of my life and have seen the good, the bad and the ugly, so I will personally be behind that work to ensure we get the best standards.
New clause 1 is designed to include single living accommodation within section 101 of the Renters’ Rights Act. It would require the Ministry of Defence to report annually to Parliament on the extent to which such accommodation meets the decent homes standard. As someone who has lived in single living accommodation for a huge chunk of my life, I appreciate the sentiment behind the new clause, but the Government do not believe it is the right way to drive up standards in single living accommodation.
As Members may recall, this matter was debated during the passage of the Renters’ Rights Act, and Ministers at the Ministry of Housing, Communities and Local Government set out why the decent homes standard cannot sensibly be applied to single living accommodation. Such accommodation exists to support operational readiness and cannot be treated in the same way as social housing or other forms of civilian housing.
Single living accommodation spans a huge range of types, many with shared facilities, and therefore, by definition, some parts of the decent homes standard would be difficult to meet. For example, the standard requires each unit to have adequate kitchen facilities, but single living accommodation units do not necessarily all have their own kitchens, because full professional subsidised catering is provided on defence bases or sites. For that very reason, civilian housing with shared facilities, such as purpose-built student accommodation, is typically not covered by the 2006 decent homes standard.
Mr Francois
I beg to move amendment 16, in clause 3, page 9, line 27, at end insert—
“(4) The Chief Executive of the Defence Housing Service must report directly to the Minister of State for the Armed Forces regarding the performance of the Defence Housing Service.”
This amendment requires the Chief Executive of the Defence Housing Service to report directly to the Minister of State for the Armed Forces regarding the performance of the Defence Housing Service.
The amendment relates to the reporting chain of the proposed new Defence Housing Service. In essence, it means that once the Defence Housing Service is established, it should report directly to the Minister for the Armed Forces regarding the performance of that service.
The genesis of the amendment is that when we were taking further evidence on the proposals for the DHS a little over a week ago, there appeared to be some ambiguity about how exactly it will report to Ministers. As I recall, we were told that it will have a partial reporting line, or the equivalent, into DIO headquarters—to keep it in the loop, I think—but that it will also report to Ministers via the National Armaments Director. At first hearing, that is somewhat surprising.
As a person who is primarily appointed to sort out the procurement challenges facing the Ministry of Defence, of which we all know there are many and about which I have railed for years, not least on the Defence Committee—it is all on the record—the NAD is not the most obvious choice to oversee an organisation designed to provide high-quality housing for service personnel and their families. It seems odd. In short, the NAD will have enough problems sorting out issues like Ajax— I refer the Minister to the answer I gave some moments ago about Ajax—and the propulsion systems of the Type 45 destroyer and so on, without having to worry about the challenges of defence housing as well.
The new system in the MOD is part of what one might call the quadripartite arrangement in the post-Levene model of defence reform, and by that I mean the process not the party—in passing, of course, Reform Members are not on this Committee, but they hardly ever turn up during defence debates in the Commons anyway, so it is not much of a loss. We now have effectively four main pillars within the Ministry below ministerial level. We have the permanent secretary, with responsibility for MOD centre and administrative matters; the Chief of the Defence Staff, unsurprisingly responsible for specifically military matters; the National Armaments Director for matters relating to procurement and—dare I mention it—the defence equipment plan, which is part of the defence investment plan; and, lastly, the Chief of Defence Nuclear, for all aspects of the nuclear deterrent and the associated shore-based infrastructure, which is now, as the Minister will know, a very challenging area for the Department.
Mike Martin
The right hon. Gentleman is making a very good speech. Does he think that the metrics by which that bonus is judged should be made public?
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.
Al Carns
Amendment 16 would require that the chief executive of the Defence Housing Service reports directly to the Minister for the Armed Forces, which is my current role. In the way it is written, it would confuse accountability in the Defence Housing Service, undermine the role of the board in particular, including the role of the family representatives, and risk duplicating lines of ministerial accountability that are already set out in the Bill.
From my perspective, when we have an issue, in defence or in any organisation, it is down to either a lack of understanding, command or control or a lack of accountability. I want to ensure, and reassure, that when the board reports on the Defence Housing Service and its deliverables, it is unfiltered and untainted as it hits ministerial offices. The governance of the Defence Housing Service has been carefully set out to provide the right balance between independence, accountability and ministerial oversight.
For the organisation to deliver its objectives, it must operate alongside strategic oversight by the Department, including accountability to Ministers and Parliament as a whole. Under established arrangements for arm’s length bodies, arrangements that operate across Government, responsibility for overseeing performance sits with the body’s board, with the chair acting as the principal interface with Ministers. It is critical that the chair is the principal interface with Ministers, reducing the ability of anyone to filter or taint any reports as they come up and through.
The Defence Housing Service will remain accountable to Ministers through that board and via departmental sponsorship and arrangements, alongside increased reporting to Parliament on its performance, as set out in the Bill. The DHS will continue to work closely with departmental teams, which will be covered in the MOD framework document in the usual way. It will be operationally independent, within the scope of the framework document and the legal powers in the Bill.
Critically, for its day-to-day activities, the organisation will be accountable to an expert, independent board, which will be appointed by the Secretary of State. The board will include a family representative, alongside the service family involvement in the wider governance, to ensure that the Defence Housing Service is held to account by not only those with appropriate expertise but the families that it has been set up to serve. Given its importance, it is right that ministerial reporting be held at Secretary of State level, rather than with the Minister for the Armed Forces. I was responsible for the delivery of the strategy, but housing is not necessarily within my portfolio.
Given the clear and comprehensive arrangements I have outlined, the amendment is unnecessary and I urge the right hon. Member to withdraw it.
Mr Francois
I am so sorry; I have done it again. Mr Efford, I was not planning to press the amendment to a Division, but now I will—before I “retire”.
Question put, That the amendment be made.
Al Carns
Clause 3, together with schedule 1, creates the Defence Housing Service, a new public body dedicated to improving the supply and quality of defence housing and spearheading the regeneration of defence communities. Our Defence Housing Service sets out a vision for the future transformation of military homes, 90% of which will be upgraded, renewed or rebuilt through a record £9 billion investment over a decade. The Defence Housing Service is the vehicle to drive that transformation.
The clause confers on the Defence Housing Service the functions of
“improving the supply and quality of defence housing,”
the management, regeneration or development of land used for defence purposes and
“supporting in other ways—
(i) the creation, regeneration or development of service communities, and
(ii) the continued wellbeing of those communities.”
To fulfil those functions, the Defence Housing Service will be empowered to generate income from property and to manage land on behalf of the Secretary of State and others. It may enter into contracts, buy and sell property, borrow money with Treasury approval, provide financial assistance and form partnerships or joint ventures. It will also have compulsory purchase powers to acquire land for any purpose connected with its functions. The Defence Housing Service will be accountable to Ministers. It must have regard to guidance issued by the Secretary of State and comply with the terms of the framework agreement entered into with the Secretary of State.
Forces families have previously been let down by homes that are not fit for purpose; we are determined and focused on delivering that. A new set of military housing standards that are fit for service family life will be established, including the decent homes standard, which the Defence Housing Service will be required to meet, under the terms of the framework agreement. The Defence Housing Service will lead the renewal and development of military homes across the United Kingdom, while unlocking the potential to deliver 100,000 homes of all types on developed MOD land.
Mr Francois
I note that the Minister never answered my previous inquiry about the bonus arrangements for the NAD. He is speaking to the clause standing part of the Bill, so perhaps he can tell me now—though he may need to seek inspiration. What are the bonus arrangements for the NAD relating to the DHS? What metrics will be applied?
Al Carns
The board of the Defence Housing Service will be accountable to the Secretary of State. I will not go into the detail of the NAD’s bonuses and how they are credited in the Bill, because they are not related.
That renewal will not only benefit the country as a whole in delivering against wider Government housing and economic growth targets but follow a “forces first” principle, prioritising current and former military personnel wherever possible. The Defence Housing Service will transform military housing, improve quality of life for service families and ensure that Defence housing is finally properly managed in a professional and efficient manner.
Mr Francois
The essence of new clause 7 is that the Government should prepare a feasibility study of the relative merits of introducing a forces housing association, as recommended in the “Stick or Twist?” report, versus continuing with the Defence Housing Service. I apologise to you, Mr Efford, and to members of the Committee: as the new clause relates specifically to that document, I should as a courtesy have sent a copy—or at least a link—to all members of the Committee before this sitting. No disrespect was intended, but perhaps I can atone for that by leaving a copy with the Clerk. If anybody wants to refer to it afterwards, they can go to him.
I will explain the background to the report and why I believe its recommendations are powerful. After I left government in 2016, when Theresa May became the new Prime Minister and I somehow did not end up in her Administration, I was commissioned by her as a former Minister—the Minister here today may one day, after he has retired, be commissioned to do something similar—to write a report about military recruitment. It was called “Filling the Ranks” and it took about a year to write; I submitted it in 2017. It covered a range of stuff, including trying to see past very minor medical ailments that were preventing people who desperately wanted to join the forces from doing so. All of the recommendations, bar one, were adopted by the Department and I think they have been worked on over the years, some of them more speedily than others.
For the record, the recommendation the Department did not adopt was that I pleaded with it to sack Capita— I nearly called it something else—as the contractor in charge of recruitment. I said in 2017, “Give them a year to fix it and if they don’t, they should go.” Capita did not fix it, and it stayed on. I understand that it was unsuccessful in bidding for the new trial service contract, so maybe it got its come-uppance after all.
Some people thought that “Filling the Ranks” was not completely useless, so I was subsequently commissioned to do a report on retention. The reason for that was partly that as soon as we started talking about recruitment, we ended up having a discussion about retention within 15 minutes anyway. As I am sure the Minister, with his experience, will know, there is no point widening the aperture of the recruitment tap, as it were, unless you can put a retention plug in the sink. If they are leaving faster than they are joining, we have a real problem.
I had a very good team for the retention report. I place on record my thanks to Brigadier Simon Goldstein, a distinguished reservist who retired from the Army after many years as a brigadier, including in one or two regiments the Minister will be familiar with, and my then researcher, an extremely bright chap called Rory Boden who has now gone to the dark side and works in public affairs. The three of us, I hope, put together a credible document. We called it “Stick or Twist?” because that encapsulates the dilemma that service personnel often face at a particular junction in their career. Do they stick with their military service, or twist and go and do something else?
We submitted that report in February 2020. It was commissioned by Theresa May, but by then Boris Johnson was the Prime Minister. We submitted it a month before the country went into lockdown, so it was written in a pre-covid context. The methodology was to make about a dozen visits to military establishments around the country, including Portsmouth for the Royal Navy, Catterick garrison for the Army and Brize Norton for the Royal Air Force. While we were there, we conducted a series of panels—I suppose one might call them focus groups—with warrant officers, senior non-commissioned officers, junior ranks and partners thereof. We tried to get four different perspectives on the challenges facing retention in the armed forces. It was very interesting to see how different ranks sometimes saw issues differently.
One quote struck us so much that we stuck it on the cover. This was under a Conservative Government—I have been called many things down the years, but never a toady. The quote relates to accommodation and came from an interview at Brize Norton with a Royal Air Force corporal:
“We had an Air Vice Marshal visit us a few months ago to give us all a pep talk about how what we were doing was extremely important to Defence and how the nation greatly valued our contribution to National Security. While I was standing at the back, I couldn’t help thinking, well Sir, if that’s true, why are my kids showering in cold water—yet again?”
We put that on the front page of the report—on its face, as it were—because we thought it encapsulated the problem. I encourage hon. Members at least to have a glance at the report if they have a spare minute, but I realise they all live very busy lives.
One thing that came out of the report was that when people leave the armed forces—when they decide to twist—it is often for a combination of reasons. We gave the example of an Army corporal having a kitchen table conversation with his wife when their kids have gone to bed. He has been offered promotion, and he says, “Should I stick or twist?” They go through factor by factor: his likelihood for promotion, her likelihood of promotion in a civilian career, the education of their children—in this scenario, they have an education, health and care plan, so if they move, they might lose that—care for an elderly relative and availability of medical support. In the end, they come to an amalgamated decision about whether to carry on. We learned from the focus groups that this sort of stuff goes on all the time. We were trying to reflect what the Minister would call ground truth.
Sometimes there was just one thing—the straw that breaks the camel’s back. In some cases, it was that the partner in the services had been away on an unaccompanied tour and there had been failures with housing provision, and that did it. To give a completely contrary example, a captain in an armoured unit down on Salisbury plain said that he left because he had been looking forward for months to being the best man at his old university friend’s wedding, but he was picked up on a trawl and told that he had to be a watchkeeper in the British Army Training Unit Suffield. He pleaded with his CO. He wrote a letter to the brigadier, but the brigadier was unsympathetic. The captain missed his best mate’s wedding. He said, “I was sat there with a laptop at 2 o’clock in the morning in the middle of BATUS”—this was some years ago, remember—“reading a cheap novel, when I could have been at my friend’s wedding.” So he came back from Canada and told the Army to stuff it. To my mind, such brainless decisions can bring very promising military careers to an end.
When my team and I looked at the housing issue, I looked at the history of the Defence Infrastructure Organisation, which at that time, it has to be said, was not coming in for a lot of praise. In fairness to the DIO—I want to put this on record—it was created in 2010 in something of a shotgun marriage between up to 24 different entities. The old Defence Estates and lots of attachments and detachments, to use military language, were thrown together to create the DIO.
In 2012, when I came in and asked to visit the DIO’s headquarters, I was asked, “Which one do you want to visit, Minister?” I said, “What do you mean? There can be only one.” “No, sir. There are six.” We eventually decided that the principal headquarters was in Sutton Coldfield, but that gives some idea of how long it took that organisation to settle down. It was not given an abundance of resources with which to complete its task. In fairness to the DIO, which has come in for a lot of stick down the years, not least from me, it was set up in challenging circumstances and has had a difficult job to do for many years. If anyone from the DIO is listening, I hope they can appreciate the spirit of what I am trying to say.
We found very clear themes from the focus groups. The partners definitely wanted the patch managers back—I have gone on about it because that is what they kept telling us everywhere we went. Some of the junior ranks in single living accommodation wanted to have slightly better conditions, but some of them at least accepted that, while their conditions may not have been great, they paid virtually no rent for them. Bluntly, at the age of 19, they were slightly more concerned about having a bit of spare cash for Friday and Saturday night than they were about their rent, but that does not mean they do not deserve to live in good accommodation. So we got a variety of feedback.
Based on the DIO at the time, we came up with an alternative solution that we called a forces housing association. The rationale for it was to create a specific bespoke entity with the sole purpose—as established in its articles of association—to provide high-quality housing for armed forces personnel and their families while providing value for money, both for those families and for the taxpayer. The Minister will know that such an entity could be a retention aid because people often pay well below the market rate for a property that would cost them a lot more to rent in the civilian world. In some cases, service personnel value that, and in some cases it is one of the reasons they stick rather than twist, so it can work two ways.
The idea is to create a bespoke housing association, chaired by a Minister and bringing in external expertise from the social rented sector.
Mr Francois
I will finish this point, then of course I will give way. Some housing associations have been looking after public sector housing, which is effectively what forces housing is, for decades. In my experience as a constituency MP, such housing associations vary in quality. There are some poor ones and some very good ones. The main one operating in my constituency is Sanctuary. A few years ago it was pretty poor but it is now under new leadership, with a very good chief executive called Craig Moule. Five years ago he told me that he was going to turn around the supertanker; she is still turning, but she is now pretty much going in the opposite direction, so I have seen what good looks like.
The idea was to bring in the expertise of people who had been managing public sector housing for decades, get a chief executive from that background and then create a board chaired by a Minister, so that Ministers would have real accountability, with representatives from forces families associations sitting as non-executive directors on the board, thus ensuring direct involvement from the customers themselves.
There is more I could say on that, but I do not want to try the patience of the Committee. That was the rationale: bringing in external housing sector professionals and getting them to run a ringfenced entity. That is what we were advocating for in “Stick or Twist?” and it was the genesis of the policy we announced several months ago, I am pleased to say. Having given the context, and having hopefully told the Committee where my heart lies on this matter, I will gladly give way to the hon. Member for South Ribble.
Mr Foster
The independent defence housing strategy team looked at the issue of a defence housing association, and said that
“transfer outside the public sector to a housing association or other private sector structure is not appropriate. It would be most likely to set back the renewal of the estate, increase costs of delivery and hamper operational effectiveness of the Armed Forces.”
Was the right hon. Member aware of that?
Mr Francois
Yes, and in the immortal words of Mandy Rice-Davies, they would say that, wouldn’t they? We were proposing a slightly more market-oriented solution. Registered social landlords are somewhere between the public and private sector. They are not entirely private entities or entities of the state, but are, practically, somewhere in the middle. As I have already said from experience, they vary in quality, but to be fair, I have seen what good looks like. I appreciate the knowledge of the hon. Gentleman. He has a proud background of service in the Royal Engineers. He qualified as a clerk of works, which is no mean feat, so I appreciate that he knows his onions. None the less, the point he puts across came from the other side of the fence—no pun intended. Of course they would argue that.
The purpose of tabling new clause 7 was so we could debate the relative merits of the two systems. If we think of this as a spectrum, the old DIO was at the most statist end, the Defence Housing Service as proposed is one notch further along to something more market-oriented, and we are proposing something another notch further along the spectrum. The Minister is listening intently; hopefully he understands the analogy.
As I said at the beginning, I do not believe there is any violent disagreement, or indeed any disagreement at all, about what the Committee is trying to achieve. We all want service family accommodation of the best possible quality for our personnel and their families; the debate is about how we best get to that objective. We were asking the Government to conduct a feasibility study, perhaps slightly more independently than the response that the hon. Member for South Ribble just cited, and to come back a year later, before the Defence Housing Service is fully up and running, to see whether there might be a better way of doing it or whether it could be tweaked. We might return to this on Report, but that is the background, the genesis and the stimuli of our proposal.
When we did the visits—it was a former Minister, a politician in a suit, coming down to a military establishment—we sat 20 people down in a room and gave them the scenario of the corporal’s conversation at the kitchen table as a bit of an icebreaker. To begin with, everyone looked at everyone else, and they were all a bit nervous about saying something. One person then said something, and the dam broke: everybody wanted to pitch in, and everybody had a contribution to make. That taught me how powerful all of this is. We had a number of specific examples when people of varying ranks told us, “We are going to leave the service of the Crown, because of our concerns about housing.”
I know from experience that this really matters to service personnel and their families. I apologise for trying the patience of the Committee this morning, Mr Efford—in all seriousness, you have everything in Greenwich, including your own barracks, so you will be very familiar with these matters yourself. I hope Members understand the spirit of what we are trying to do with new clause 7.
On clause 3, I think we have had a good debate this morning, and we have tested some of the issues fairly well. I hope we have done our duty, and no doubt we will wish to return to some of these issues on Report, not least the prospective bonus for the National Armaments Director. I will conclude there, and I am genuinely interested to hear the Minister’s reply and the opinions of any other members of the Committee.
Al Carns
New clause 7 would require there to be a feasibility study when establishing a forces housing association, but before I go into the detail, I will reflect on some of the comments made by the right hon. Member.
Recruitment and retention are intrinsically linked, as both the Government and the Opposition acknowledge. We have introduced lots of changes in recruitment and retention over the last year and a half, but there is much more to do. While it differs across the services, overall we are seeing a 13% uptick in recruitment and an 8% reduction in outflow, which is the first time we have seen a change in direction for 14 years. There is much more to do, but we are heading in the right direction.
One of the reasons we are heading in the right direction is because I genuinely believe that our armed forces personnel can see that we are doing the right thing, particularly with accommodation. The right to a family life is one of the critical components of anyone serving, and that looks like safe, secure, warm and dry accommodation, whether single living or family accommodation. To give a small example, I went through marine training in 1999, and the accommodation in which I was housed was still in place in 2024, when I came back to be the unit’s commanding officer. In 1999 it was terrible, and in 2024 it was unworkable. We need to get after those accommodation issues and put them right. I am absolutely confident in the Defence Housing Service, and the strategy review comprehensively looked at single living accommodation and family accommodation, and we are putting them on the right track to deliver significant change.
It is not lost on me that the drafting system in the military can put an undue amount of pressure on individuals; I have been on a satellite phone to my children on their birthdays in the middle of all sorts of carnage, with helicopters burning and turning in the background, or with incoming rounds in Afghanistan. It puts exceptional pressure on families, so the ability to return to a safe and secure place is the least that we can provide.
The independent strategy produced prior to the establishment of the Defence Housing Service was exactly that: it was independent, and it took a huge amount of advice from a variety of people. Most importantly, the families federations fed into that process and ensured that their voices were heard. The quote highlighted by my hon. Friend the Member for South Ribble was only reinforced by the oral evidence given by Natalie Elphicke Ross OBE, when discussing the strategy review in response to the hon. Member for Solihull West and Shirley. The view was firmly held throughout the entire review that the housing association model was not the right approach, and it was not included in its recommendations.
It is worth noting that, while there were a plethora of strategic issues during covid, the previous Conservative Government did not adopt the totality of the “Stick or Twist?” report produced by the right hon. Member for Rayleigh and Wickford, although it contained valuable points. A housing association model would jeopardise the close working with the military that is essential to ensuring appropriate operational capability. It would also put at risk the Crown basis on which personnel occupy their homes. Crown immunities allow the Ministry of Defence to move personnel at pace, without some of the regulatory constraint that we would have otherwise, which is vital for operational effectiveness. We must also bear in mind that we have more throughput in the armed forces than probably any other organisation or housing association in the country.
Mr Francois
For the record, that was the one recommendation in the “Stick or Twist?” report that was not adopted. All the other recommendations were adopted, including spending a lot of money on wraparound childcare because, again, childcare was a very important point for retention. Ben Wallace told me that he used the report to get quite a bit of cash out of the Treasury, so that recommendation about childcare was one that we did manage to get through. For the record, this was the one recommendation that was too much for the system to bear.
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.