Armed Forces Bill (Third sitting)

Paul Foster Excerpts

Select Committee stage
Thursday 26th March 2026 Public Bill Committees

[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 Paul Foster (South Ribble) (Lab)]

Will the right hon. Member give way?

[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.