Examination of Witnesses (Questions 140
- 151)
WEDNESDAY 8 NOVEMBER 2000
COLONEL MIKE
TAYLOR, CBE, COLONEL
PATRICK ROBINSON
AND COMMODORE
IAN PEMBERTON
140. What about the Duke of York's Headquarters,
was it a good deal or not? I remember you coming to an earlier
Committee saying that some of the losses would be huge.
(Colonel Taylor) We are told they made a lot of money
out it. That is one where the capital sale clearly was beneficial
for the Exchequer. At the moment it is a pain for us, it is a
pain for the Greater London Association, it is a pain for the
units that have been decanted, but clearly it was a profitable
deal and one cannot say any more than that.
(Commodore Pemberton) Can I just come in, before we
move too much away from the property. In my area, or certainly
a large part of my area, where Defence Estates are selling our
estate—we always did it ourselves but after the SDR announcement
it was decided that Defence Estates would do it—we are having
to pay what is known as the "works in aid", which is
getting all the clearance certificates and what have you, without
getting the benefit of anything to offer it from the sale, which
we would have traditionally done. This is coming straight out
of our property maintenance budget which is already greatly reduced
as a result of savings measures and, therefore, further aggravates
the problem of maintaining our Reserve and Cadet estate. It does
vary a bit across the country but it is causing us a considerable
problem and expense.
141. Do you think that some of the proceeds
of the sale should be coming to you?
(Commodore Pemberton) If we are preparing a site for
sale then that should be netted off from the sale value at the
end, yes, undoubtedly.
142. But beyond that would you say that you
should be getting some of the proceeds of the sale anyway?
(Commodore Pemberton) No, I do not think so. We acted
purely as an agent in the previous circumstances. There are certain
circumstances where there is a scheme where if it is of benefit
to all round and we can recoup some but it is has to be reinvested
in whatever the scheme is. SELLIT it is known as, and do not ask
me what that means because I cannot remember. In this particular
case what we should have is the cost to us of getting the site
ready, certainly if it is going to be taken out of a budget which
is for maintaining our buildings which are getting in a very poor
state.
143. I am sure that we will bear that point
in mind when we come to our recommendations.
(Colonel Robinson) On the buildings matter, there
are two things which are falling out at the moment. One is that
the budget for maintaining them appears to be coming to the end,
they are talking about cutting it to nil next year or 10 per cent
of what it was. The difficulty we have is that a lot of the buildings,
although we have retained them particularly in my part of the
world quite well—we have not got rid of anything I would
have got terribly upset about—some of what we have got is
quite old and needs maintaining. If it is in the city, it is the
front-of-house part of the Army or the Navy or whatever it happens
to be, and if it is falling into a state of repair it rapidly
loses its appeal to everybody. Of course the problem we feel at
the grass roots is that it is always us that catches it, a unit
will say, "We never get the money, we never get it sorted
out", and of course it always goes on and on and on. It is
put back to next year and not the previous year. The second point
is that the Cadets are the ones who are suffering mostly. I have
a unit which had an excellent drill hall in Shirley, part of Birmingham,
and it had a miniature range and it had a splendid shooting organisation
in the Cadets but when it was reprovided for, because it is within
five miles of a TA centre, it does not get a miniature range.
If you can think of the administration and the logistics of getting
Cadets five miles with their weapons to another location where
they have to draw a key and go through all the machinations, this
is hitting us quite hard. We were told that nobody would lose
out from SDR but the Cadets are missing out badly in my view because
of this small provision.
(Colonel Taylor) There was provision made within SDR
for £12 million to be set aside for preserving Cadet interests
in the relocation of TA centres. We are watching that like hawks
to make sure it does not get side-swiped into something else because
that money is absolutely critical to make sure the Cadets are
not disadvantaged. We are keeping very close tabs on that.
144. But all of the detachments have homes?
(Colonel Taylor) They have all got homes.
(Colonel Robinson) Nearly.
145. Not quite?
(Colonel Taylor) Some of them may be portakabins but
they have got homes.
(Commodore Pemberton) Yes, they have all got homes.
Some of them are still their original homes because Defence Estates
has not yet been able to find alternative homes for them to go
to. That is one of our concerns about this £12 million, that
time is stretching out. There was originally talk of only a two
year span for it and it will take longer than that in some instances.
So, as the chairman has just said, we are watching that money
like a hawk. I believe it was actually recommended in one of your
earlier reports, Chairman, that that should be handed over to
the TAVRAs so it did not disappear and if there was any surplus
it could be fed into the Cadet estate. Unfortunately that recommendation
was not taken forward.
146. It sounds a good idea to me. I know these
things are down to the Defence Estates if they have taken over
these properties and we will have to ask some questions of them,
but do you have any indication of how much has been raised from
the sale?
(Colonel Taylor) Not in money terms.
147. Can you make a rough guess?
(Colonel Taylor) The big one is the Duke of Yorks.
Anything else pales into insignificance by comparison with that.
I think the more important point is that the disposal of properties
is proving to be quite a slow process so it is mostly book value
at present rather than the real value.
Chairman
148. When you came two or three years ago there
was some question that you doubted the competence of Defence Estates
to raise the right amount of money. Set against other sales of
Government assets, that is a view which has been vindicated time
and time again, and you did say you had a lot of expertise within
the TAVRAs which was not being properly accessed. Are you able
to give a preliminary assessment, not whether these sites should
have been sold having made the decision to sell them but Defence
Estates is receiving good value for money from the sales?
(Colonel Taylor) I think we put in our submission,
Chairman, some comment on this and what we were saying was that
disposals have progressed well in some areas, notably in the North
of England, Yorkshire, the Humber and Lowlands, but in other areas
planning permission and provision for alternative accommodation
has led to delays. So there is a mixed pattern emerging around
the country about those disposals and we really at this stage
cannot give you hard figures. The Defence Estates really are now
custodians of the property and their valuations and really they
are the only ones who can give you the definitive answers, I am
afraid. I would repeat that we feel saddened that the expertise
which was available at association level has not always been tapped
into. Where it has been tapped into, in Yorkshire and the North
East, then it is working well.
Chairman: It seems like a good inquiry
for the Public Accounts Committee to see if value was obtained.
Mr Cohen: Though I think we should ask
the Defence Estates for a memorandum on these points we have raised.
Mr Brazier: Yes.
Chairman: Good point.
Dr Lewis
149. Under the new RFCA Regulations, have you
experienced any problems with the new funding arrangements? In
particular, have you encountered any loss of income?
(Colonel Taylor) I will pick it up and then my colleagues
will come in. We were very careful in the Memorandum of Understanding
that was signed off last year, about how this was all going to
work, to emphasise what was required now with funding passing
through divisions rather than coming direct from Headquarters
LAND, a high degree of transparency with the clear understanding
that was not meant to indicate that it was available for flexing
across other budgets because that would have been rather damaging.
To date the experience suggests that is working well. My two colleagues
who sit on the boards where these things are actually debated
in detail probably can add a personal dimension to that.
(Colonel Robinson) The difference, of course, is that
before the funding came through divisions all the RFCAs were on
a level playing field and we all had the same instruction and
everything worked roughly the same. Now it is coming through divisions,
the divisional aspect is thrown down to us in that particular
division and it is not necessarily the same as the one over the
border and it does depend on what the divisional priorities are.
First of all, we see this as equal pain all round because whereas
the RFCAs previously had their budget not going through divisions
and there were eyes glancing over the border and saying "How
is the TA getting this, or how are the Reserves getting this,
when the Regular Army is strapped?", now we are sharing the
pain. It is almost too early to say whether we are going to be
short of money but the indications, as I said earlier, are that
the future funding, although the main part is supposed to be secure,
the property management funding is looking distinctly doubtful
at the moment. That is something we are watching very carefully
for the reasons I outlined five minutes ago, that we suddenly
find our buildings are falling around our ears and some of them
are not in a good state, in particular in Ian Pemberton's area.
(Commodore Pemberton) Yes, indeed. There is certainly
a variance from one division to the other in the way they have
had to take their savings in so far as the property management
funding is concerned. In the division which Patrick and I are
covered by, which I think probably has a far greater property
portfolio than any other in the UK, we find there is a categorisation
of need to be done to buildings. We are 100 per cent A1, which
is the highest category, and only getting 10 per cent of A2 for
the coming financial year. Our understanding is that in other
areas, other divisional areas, they are getting 100 per cent of
A1 and 100 per cent of A2. Our cadet huts come A2 and lower, so
it means that these wooden buildings that require regular maintenance
just to maintain them so they do not fall away are just not going
to get done. We have got a major problem on our hands in trying
to find ways of keeping these things going. The level playing
field, which the Chairman referred to a moment ago, is therefore
in that particular area not there any longer. One can understand
the problems at the divisional level but that is an area where
we are suffering and that level playing field has disappeared.
(Colonel Taylor) I suspect your question actually
dates back to one of the earlier appearances before this Committee
when we were discussing and debating what was, to use the jargon,
the netting off of our reserves. That decision was taken some
time ago. We had previously had the facility to hold reserves
and earn interest and so forth but that is now netted off when
it comes to the budget allocation for the coming year. That, unfortunately,
is the way it is these days and that is the way we have to manage.
We have lost that and that is a real loss, but that has happened.
(Commodore Pemberton) To be fair to the chain of command,
they have increased our establishment grant by so much per head
and for that part of our investment income, as we have called
it, that would have been used for welfare for the TA side. Because
the TA do not have NAAFI funds and other things which the Regular
Army get, they now do give us an addition to our establishment
grant which can be used for that sort of purpose. For the other
areas in which we would have used our investment income such as
to help top up our property management funding, we no longer have
that income.
150. Finally from me, there is a recent idea
to make it compulsory for members of the reserves to inform their
employers of their status. Do you agree that it should be compulsory
for them to do this and do you have any fears this would be likely
to affect recruitment?
(Colonel Taylor) I have to say to you, Sir, that Richard
Holmes put it very eloquently and I do not think I could add much
more to what he said. His views seem to me to summarise perfectly
the difficulty of this particular topic. Frankly, everybody you
talk to will have a different view but I think Richard actually
summarised it in a way which was most intelligent and sensible.
That is my parting gift to Richard as he goes.
Chairman
151. Thank you all very much. It has been a
very interesting session, it shows our continuing interest in
the reserves and perhaps we will be publishing something in due
course. Thank you very much.
(Colonel Taylor) Thank you very much, Chairman.
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