APPENDIX 1
Supplementary memorandum submitted by
the Ministry of Defence (PAC/1999-2000/280, 283)
Question 16. Amplification of the £11
million "dead money" included in the figure of £39
million
1. At the time of the NAO study there were
14,425 properties which would cost £39 million over a full
year in rent and maintenance. Within this total there were:
583 allocated for anticipated unit deployment;
1,339 awaiting or being modernised;
3,028 awaiting disposal; and
4,970 under offer to incoming families.
2. This leaves a balance of 4,505 properties
for which there was no immediate Defence use at an estimated cost
of £11 million.
3. By the end of August 2000 the total number
of empty properties was 14,352 which would cost £41 million
over a full year in rent and maintenance. Within this total, there
were:
2,112 allocated for anticipated unit deployment;
1,647 awaiting or being modernised;
5,571 awaiting disposal; and
3,344 under offer to incoming families.
4. The balance of 1,678 properties for which
there is no immediate Defence use is estimated to cost £4.3
million.
Question 183. Projection of "ghost"
properties and the payments over the life of the contract
5. The term "ghost rent" applies
to the payment of full rent on an Annington Homes property which
has subsequently been demolished and not rebuilt. At each 25-year
point in the Annington underlease, a full site review will be
undertaken which will take account of all changes made to properties
at each site and the rent levels will be negotiated accordingly.
Any ghost rents in payment would be subsumed in that review. The
number of properties currently falling into this category is 977.
It is not possible to forecast with certainty the full cost of
the "ghost rent" relating to these properties because
of the difficulty of anticipating movements in market rents generally,
on which future rent increases will be based. However, on the
basis of best available information it is estimated that the current
"ghost rent" liability throughout the first 25-year
period is likely to be in the region of £50 million to £60
million. It is not possible to forecast accurately future demolitions
which may be necessary for structural or environmental reasons.
Questions 186-189. Brief progress report up
to the end of 2001 showing DHE's achievement against targets in
reducing the number of vacant properties
6. The disposal target for the period 1
January 2000 to 31 March 2001 is 6,500. To date, 2,300 properties
have either been transferred to Annington Homes, passed to Defence
Estates for disposal on the open market or demolished. Termination
notices have been issued to Annington Homes in respect of a further
3,330 properties with hand back dates ahead of 31 March 2001.
Annington Homes are contractually obliged to accept these properties
within that timescale. A further 830 MOD-owned properties are
due to be disposed of through Defence Estates and another 18 properties
are due to be demolished. A further report will be provided to
the Committee at the end of the financial year to confirm final
achievement.
Question 78. Number of empty properties behind
the wire that are offered to single soldiers
Approximately 100 properties behind the wire
are used to house single soldiers where there is a shortage of
barrack accommodation. A further 55 are currently occupied by
ex-Service personnel or their families prior to their resettlement
into the civilian sector.
20 November 2000
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