Armed Forces Bill (Third sitting) Debate

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Department: Ministry of Defence
Thursday 26th March 2026

(1 day, 8 hours ago)

Public Bill Committees
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Mark Francois Portrait Mr Francois
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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 Portrait Mike Martin (Tunbridge Wells) (LD)
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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.

Mark Francois Portrait Mr Francois
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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 Portrait Mike Martin
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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.

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Al Carns Portrait Al Carns
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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.

Mike Martin Portrait Mike Martin
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Will the MOD publish a timeline for achieving the targets?

Al Carns Portrait Al Carns
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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.

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Mike Martin Portrait Mike Martin
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I would like to make some brief comments in support of amendment 15. We should reflect on how the divorce rate is much higher for service personnel because of the vagaries of service life and the stress under which it can put relationships. A measure like this is the least we can do to mitigate the worst excesses that result from service life. As hon. Members will know, court orders often come with specifications that appropriate surroundings be available for contact visits. By agreeing to this amendment, we would ensure that provision is available to facilitate such orders.

Al Carns Portrait Al Carns
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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.

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Mark Francois Portrait Mr Francois
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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 Portrait Mike Martin
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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.

None Portrait The Chair
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With this it will be convenient to discuss new clause 1—Single living accommodation standards

“(1) The Renters’ Rights Act 2025 is amended as follows.

(2) In section 101 (The standard of MOD accommodation), after ‘service family accommodation’, in each place it occurs, insert ‘and single living accommodation’.

(3) In subsection (10), at the appropriate place insert—

‘“single living accommodation” means any building or part of a building which is provided for the use of a person subject to service law or a civilian subject to service discipline as living accommodation, but which is not service family accommodation;’.”

This new clause amends the Renters’ Rights Act 2025 to ensure defence housing standards apply to single living accommodation.

Mike Martin Portrait Mike Martin
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It is a pleasure to serve under your chairship, Mr Efford. The amendment and the new clause are designed to do the same thing in two separate pieces of legislation. Essentially, this is about making sure that defence home standards cover both service family accommodation and single living accommodation. That is important because, as well as approximately 47,500 service family accommodation properties in the UK, there are 100,000 single living accommodation spaces. In terms of numbers of properties, if not people, there are twice as many SLAs as there are service family accommodation properties.

I will give the Committee a bit of detail, because the detail is quite important. There may be a lacuna in the drafting of the Bill, so perhaps we can accept the amendment as a tidying-up measure. If there is no gap in the drafting of the Bill, perhaps the Minister could speak to why there is a difference between different provisions.

Proposed new section 343E(1)(a) of the Armed Forces Act 2006 specifies that the Defence Housing Service will have the general functions of

“improving the supply and quality of defence housing”.

Subsection (8) defines “defence housing” as both service family accommodation and single living accommodation. So far, so good. However, subsection (6) refers only to service family accommodation and not to single living accommodation. The requirements in subsection (6) are therefore not the same as in subsection (8). I am pretty sure that the Ministry of Defence and the Government want defence housing standards to apply across all accommodation, rather than just to service family accommodation. Taken together, that means there may be a gap in how the provisions are interpreted. I am sure we all agree that the standards should apply to service family accommodation and single living accommodation.

New clause 1 would apply the same concept—broadening the scope of defence housing standards to cover both service family accommodation and single living accommodation—to the Renters’ Rights Act, which contains a number of provisions that pertain to service accommodation. Wherever “service family accommodation” appears in the Act, the new clause would simply add “and single living accommodation”, thereby broadening the scope of the Act. I do not know whether that omission was an oversight or deliberate. If it was deliberate, will the Minister explain why? Why are we setting single living accommodation apart from service family accommodation? It is very important that service families are protected, but there are twice as many SLA properties as SFA properties.

Al Carns Portrait Al Carns
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I shall speak first to amendment 2. I thank the hon. Member for his engagement.

The measures in the Bill build on 18 months of work to stop the rot in defence housing and build for the future. We are buying back 36,000 military family houses from Annington and delivering a new consumer charter. We have already got after the first 1,000 homes, published the defence housing strategy and, importantly, we have launched the new single living accommodation review. That is important because there is a separation.

What the hon. Member is getting at is where, in some cases, we have Defence Housing Service family accommodation that is repurposed for single living accommodation because we have excess housing or a lack of single living accommodation on the base. Therefore, we must include both elements in bits of the Bill, but not all of the Bill, because SLA is subject to a completely separate review.

Mike Martin Portrait Mike Martin
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I know of what the Minister speaks. A four-bedroom house may have four servicepeople living in it as single living accommodation—the defence equivalent of a house in multiple occupation—but does that not speak to the point that SLA and SFA should be treated under the same standards?

Al Carns Portrait Al Carns
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I fundamentally disagree. The review of single living accommodation will describe the complexity of the problems we have across the entire estate with both the shape and size of our single living accommodation, the requirements of a changing population, and how best to manage them. To combine the two would detract in particular from the defence housing strategy because of the funding mechanisms, ownership and oversight of single living accommodation.

Amendment 2 would have the effect of broadening the Defence Housing Service’s responsibility for the standard of housing to include single living accommodation as well as service family accommodation, which the Government do not believe is appropriate in any shape or form. Single living accommodation operates in a fundamentally different way from service family accommodation, and the two must therefore be separated. SLA is housing provided for individual service personnel living without families, typically on military bases behind the wire, with the primary responsibility sitting with frontline commands and the demand signal set by their operational requirements. Recognising the difference, the defence housing strategy, which sets out the basis for the Defence Housing Service, did not recommend that the Defence Housing Service is responsible for all single living accommodation, but recognised the need for dedicated, focused attention on service families that the new organisation will provide.

We are committed to driving up standards in single living accommodation, just as we are with service family accommodation. A separate, dedicated review of single living accommodation is already under way and should be complete in the summer. The Minister for Veterans and People is leading that, and pushing forward on it hard and fast.

Mike Martin Portrait Mike Martin
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The Minister is being very generous with his time. Could he state precisely the difference between SLA and SFA that means we cannot bring them together?

Al Carns Portrait Al Carns
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Single living accommodation is often hundreds of rooms—think student accommodation—in barrack blocks behind the wire. Service family accommodation is often on the other side of the wire, out in the local population. Single living accommodation houses individuals rather than families. The whole set-up is completely different—some have cooking facilities and some do not. To balance the two on the same standards would completely skew the system.

I assure the hon. Member that the single living accommodation review is fully under way. It will look into this separately and deliver a strategy that is similar to the defence housing strategy, but it will look specifically at the nuances of single living accommodation. I think that many of the points the hon. Member is getting at will be included in that review and be open to scrutiny.

Mike Martin Portrait Mike Martin
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If I understand the Minister correctly, he is saying that we are going to take different routes but get to the same place. If he could give me assurances that we are going to see the same standards reflected in SFA as SLA, but they are going to be managed through separate processes, I would be happy to withdraw the amendment.

Al Carns Portrait Al Carns
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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.

Al Carns Portrait Al Carns
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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.

Mike Martin Portrait Mike Martin
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That is not what new clause 1 seeks to do. It is about amending the Renters’ Rights Act so that defence housing standards cover both service family accommodation and single living accommodation, rather than applying the decent homes standard, as in the previous amendments we discussed.

Al Carns Portrait Al Carns
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I make it clear that we are not talking about amending the Renters’ Rights Act; we are talking about the Armed Forces Bill, but I am happy to take this offline and talk about the nuance between the two if required. We need to be clear that this does not mean we are complacent about the condition of single living accommodation—far from it. We are committed to driving up the quality of single living accommodation across the entire estate and ensuring that people get the experience they deserve if they are to serve on the frontline.

The Minister for Veterans and People has commissioned an independent review and is working on it now, and the single living accommodation piece should be complete by the summer. I will strongly recommend that she engage with the hon. Gentleman to talk through how we can work collaboratively towards the best solution for defence personnel. The review is the right vehicle for this work; it is targeted, expert-led and focused on the specific needs of those who serve.

Our commitment is simple: we will deliver safe, comfortable and well-maintained accommodation for our service personnel, taking into account the unique nature of service as a whole. I hope that reassures the Committee. On that basis, I ask the hon. Gentleman not to press amendment 2 or new clause 1.

Mike Martin Portrait Mike Martin
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In the light of the Minister’s words— I know him well from before we came into politics—I am happy to take him up on his offer, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: 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.”—(Mike Martin.)

This amendment requires that the framework agreement governing the new Defence Housing Service must at a minimum meet the 2006 decent homes standard.

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Perhaps the Minister could begin by explaining the rationale for having the Defence Housing Service report to the NAD, who will have his hands full as it is. Could he specifically explain why the Government decided to manage the service that way, rather than reporting via the permanent secretary or directly to Ministers? Given that the NAD is on a very specific performance bonus regime, does that include the performance of the Defence Housing Service? Is that part of his potential bonus remuneration? If it is, by what metrics will that be judged?
Mike Martin Portrait Mike Martin
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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?

Mark Francois Portrait Mr Francois
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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?