Examination of Witnesses (Questions 120
- 139)
MONDAY 30 OCTOBER 2000
MR KEVIN
TEBBIT, CMG, AIR
MARSHAL MALCOLM
PLEDGER AND
MR JOHN
WILSON
120. That is what I am saying. Do you have incentives,
I can see some areas on Figure 12 triple the target vacancy rate,
eight of them have doubled. Do you know which are the good managers
or bad managers? Do you have an area manager of the month, Mr
Wilson?
(Mr Tebbit) It is important to say that the reasons
for these differentials depend on what is going on in individual
areas.
121. I can believe that.
(Mr Tebbit) Some are too small and have been rationalised.
122. Do you have a manager of the month?
(Mr Wilson) We do not operate a manager of the month
scheme as such. We have now instituted a monthly review of the
disposals in each area and we do it area by area. Most of the
high figures in those tables do not necessarily relate to the
inefficiency or efficiency of the manager, they relate to a particular
location. There may be two infantry battalions moving in a year
or two years' time, therefore it is necessary to hold additional
property.
123. These unit moves seem to be less of a problem.
You are renting outside £11 million worth of property?
(Mr Tebbit) That is not a bad figure, yes.
124. Page 15, 1.10. If an officer refuses a
house one down, accommodation one down, you rent the property.
(Mr Tebbit) You mean if there is nothing for them
at their right level or there is not anything one down, then they
are eligible for a rental property? Yes.
125. The right of refusal is not theirs then?
If they say, "I do not want the one down", you say,
"You are taking it"?
(Mr Tebbit) That is right.
126. How much of the £11 million rental
could be as a result of officers not being able to be offered
one down?
(Mr Tebbit) It is usually where there is no accommodation
of any kind for those officers. For example, when there was a
major move to the Bristol area, Abbeywood, where we moved the
Procurement Executive in a major way, there simply was not enough
Service housing there and it has been quite difficult to work
out what to do. We have a PFI programme going to build housing
but meanwhile people are in this sort of accommodation.
Mr Williams
127. Mr Wilson, you told Mr Griffiths there
are cases where dilapidations costs are settled rather than repairs
being carried out. How are they settled? Who determines what they
should be? What process is there? In the event of that happening,
if the building is then demolished who meets the demolition costs?
Thirdly, in that process, what happens to ghost rent?
(Mr Wilson) If we are proposing to release the properties
to Annington Homes, what happens is that Annington Homes employ
their technical surveyors, they have a look at the property and
complete a schedule of what they think is wrong with the property.
We, for our part, employ our technical specialists who do a similar
sort of assessment and then there is a process of discussion between
the two parties, and either there is agreement or disagreement,
and in the event of disagreement in the final analysis cases could
be taken to arbitration or to law. As far as a property which
is demolished is concerned, generally speaking the demolition
would have happened before we start the process of disposal of
a particular site; demolition might have happened because of structural
problems, for example, two or three years before. In those circumstances
a compensatory payment is made to Annington Homes because that
property no longer exists in accordance with the sale agreement.
128. But you indicated in an earlier answer,
or someone did, that there is also a ghost rent which is paid.
(Mr Wilson) Whilst we retain that site, even if a
house has been demolished, for example for structural reasons,
then a ghost rent continues to be payable.
129. Indefinitely?
(Mr Wilson) Yes[9].
Mr Gardiner: £1.625 million a year on 620
houses. In other words, over a 999 year lease they have the whole
£1.66 billion back.
Mr Williams: No, over a 100 year lease. Mr Leigh.
Mr Leigh
130. Mr Tebbit, let me try and summarise. As
of August 2000 we have 14,352 houses empty, 24 per cent.
(Mr Tebbit) As at the time of the report being written.
That was a year ago.
131. All right. Despite this, the Executive
had to house Service personnel in property rented from the private
sector because appropriate housing was not available. £11
million cost. We have a target of 13 per cent.
(Mr Tebbit) We have a target now of 10 per cent. The
target was in the report at 13 per cent.
132. Okay. In 1986, the accepted target for
vacancies was 6 to 7 per cent.
(Mr Tebbit) Sorry? 1986?
133. Sorry, 1996. Am I wrong in saying that?
(Mr Tebbit) I am not sure it is going to clarify things
very much.
134. Having listened to this debate, I still
do not know how you arrived at the target we are now at and why
you cannot put greater pressure on bringing it down.
(Mr Tebbit) The target we are talking about is based
on an assumption of how many people we will need to house and
what percentage of management margin we need in order to achieve
that efficiently to deliver operational effectiveness. The best
guess I can offer you at this stage is that the core requirement
will be something around, say, 42,000 because we are dealing with
a declining requirement as we go—this is by 2005—and
we will probably then need about 10 per cent on top of that as
a management margin in order to move people around that core housing
requirement. That is the best target I could give you at this
stage as a general guess. We are a little way away from it right
now. We have moved on considerably since the report was written
for two reasons. Firstly, the report was written during a change,
change was going on and now 12 months later quite a lot of things
have happened, above all the 6,500 extra houses for disposal,
above all the radical reduction in how long things are empty for
long periods, which is a good indicator of how well we are managing
it. We had 3,800 empty for more than six months when the report
was written, we now have 632. We had 346 over three years, we
have now got 50 empty for over three years. In fact, when I asked
last week, the figure was actually 18 empty for more than three
years. So these things are coming down rapidly.
135. If Mr Griffiths when he was running his
housing association had a vacancy rate of 24 per cent, he would
have been out of a job. He would not have risen and been promoted
to the position of real power he now enjoys.
(Mr Tebbit) It depends what his job was. If his job
was to run a housing association, I am sure that is right. But
the job here is to provide operational capability. Service families
move on average every 18 months to two years. They are moved by
the organisation in order to deliver their job most efficiently.
Therefore we require a high management margin, a high turn over
is achieved. As we have said, 22,000 moves a year. We do not provide
social housing, it is operational military housing, and comparisons
with different sectors really are not valid, although it is absolutely
right we use best practice bench marks for the areas we can compare
it to, but we cannot compare it with housing in the ordinary rented
or private sector.
136. I accept you always come back with this
argument in terms of your needs, national security, you must have
this buffer and therefore you have this system—
(Mr Tebbit) It is because we are moving people around
a lot.
137. I know but I was wondering whether it might
be better to have a much lower target, to accept you will not
always be able to accommodate people in these properties but to
rent privately.
(Mr Tebbit) There is not that much private accommodation
to rent in Britain. A lot of our establishments are in fairly
remote areas where there just is not the stuff there. In other
areas, such as London or Bristol, we have found it is very expensive
and this is a reasonably cost-effective way of doing it. We are
not like other countries which do have large private sector rental
markets, we have relatively little. If you are moving people around
every 18 months to two years, which is very much the case in the
Army, there is not much time for them and we do not want them
to spend months of their time worrying about the details of how
they are going to move from one place and settle into another;
we want that dealt with. That was another reason why we had this
system.
138. Why do you think the demand for family
and married quarters has fallen so steadily? Is it because you
are still locked into a sort of paternalistic culture whereas
actually people want to be in their own private house?
(Mr Tebbit) There have been reduced numbers of people.
Demographic trends make a difference, people having fewer children
early. There is increased private purchase where the spouses'
jobs matter and people say, "I do want to dig into one place
and go and live in the mess[10]
rather than live with my family in family quarters." So there
are various demographic factors at work as well. We do try, and
I am sure the Air Marshal is longing to say this, to capture these
by surveys as well as forecasting unit moves so we get the overall
picture right.
(Air Marshal Pledger) Risk is something
I think we have to acknowledge. In the continuous attitude surveys
from each of the Services, one of the major priorities they put
against retention is the availability of appropriate and, shall
we say, modern Service housing in order to provide for their turbulent
and mobile life styles. That is very much at the top end of their
priorities. The cost of not meeting that is considerably greater,
given the training requirements, even if we could recruit sufficient
through this process. So we have to acknowledge the primacy our
occupants put on this as a definitive and central condition of
service.
139. Maybe this is a naive question, but surely
people do not want to be locked into houses either within the
wire or outside the wire owned by somebody else, they want to
have their own house, they want to be on the property escalator?
(Air Marshal Pledger) That is not the answer that
comes back from all these current members of the Armed Services.
There is a proportion who are taking that particular move. The
large majority are saying this is an essential condition of service,
given their life-style.
9 Note by Witness: Under the Annington sale
agreement, ghost rents on demolished properties apply for the
balance of the first 25 years of the contract, ie until 2021 or
until the site including the demolished property is returned to
Annington Homes, if earlier. A site review takes place at the
25-year point. See Appendix 1, p 23. Back
10
Note by Witness: for clarification, my reply was intended
to indicate that people were content to live in the mess during
the week. Back
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