Building improvements
29. There are a number of projects currently being
undertaken to upgrade and improve the condition of Single Living
Accommodation—the accommodation provided for Armed Forces
personnel who are single or who have elected not to be accompanied
by their families.
30. Perhaps the most significant is Project SLAM,
the Single Living Accommodation Modernisation programme. This
is being carried out for the MoD by Debut Services Limited, a
joint venture between Bovis Lend Lease Limited and Babcock Infrastructure
Services. Project SLAM has so far created more than 6,000 new
bed spaces, with another 3,000 to follow. On 11 January 2007,
it was announced that the second phase of Project SLAM would deliver
a minimum of 3,800 upgraded bed spaces.[25]
According to Defence Estates' Annual Report for 2005-06, SLAM
had substantially exceeded its in-year target of delivering 2,500
bed spaces, with 3,750 being created.[26]
31. In parallel to SLAM, Project CHALLENGER is underway
in Northern Ireland; the Project to Upgrade and Modernise Accommodation
(PUMA) in Germany; and separate projects in Gibraltar and Cyprus.[27]
32. Private Finance Initiative (PFI) projects are
also contributing to improving Single Living Accommodation. The
largest such project is Allenby/Connaught, a 35-year contract
worth £8 billion, to deliver modern living and working accommodation
to Aldershot Garrison and the garrisons around Salisbury Plain.
The contract was let to Aspire Defence Limited, a consortium consisting
of Carillion Holdings Limited, Kellogg Brown and Root, and HSBC.
The intention is that Allenby/Connaught will house 18,000 personnel
(nearly 20% of the British Army). The first major challenge will
be the return from Germany in July 2007 of 2nd Royal
Tank Regiment.[28]
33. The redevelopment of Colchester Garrison, which
we visited in 2006, is also being undertaken as a PFI project—by
RMPA Services plc, a consortium consisting of Atkins Limited,
Sir Robert McAlpine, Sodexho and HSBC. The 35-year contract, worth
£2 billion, is intended to provide accommodation for 3,500
Service personnel and 700 civilian workers. Construction began
in May 2004, and the first units moved into the new Merville Barracks
in September 2006. These were 7 Parachute Regiment Royal Horse
Artillery, 16 Close Support Medical Regiment and 216 Signal Squadron.[29]
34. The redevelopment of Catterick Garrison is taking
place under a different relationship with the private sector.
In order to expand the garrison to accommodate a further five
major units—Catterick is already home to 18,500 people,
housing ten major units and numerous minor formations—the
MoD, in cooperation with Richmond District Council, has begun
to sell land in Catterick to developers who undertake, as part
of their contractual obligations, to provide amenities for the
military and civilian population, such as retail and leisure facilities.[30]
35. PFI projects have brought substantial levels
of investment in new, high-quality living and working accommodation
for the Armed Forces, and allow access to private-sector expertise
across a range of disciplines. However, they also commit the MoD
to very long-term deals and limit its flexibility. Vice Admiral
Laurence told us:
My own view is that it is a balance we must keep
under very close review. The proportion of accommodation which
is within the PFIs is increasing. There needs to be a mix, and
we need to make sure we are not transferring too many of our accommodation
into private ownership.[31]
36. It
goes beyond the scope of this inquiry to offer an evaluation of
the merits and risks of Private Finance Initiative and Public
Private Partnership projects. We
note that the NAO has begun a study into the management of MoD
PFI projects, focusing on eight projects to examine the allocation
of risks and how the risks have been managed to date.[32]
We shall be noting its conclusions with great interest.
These are matters which we shall continue to monitor closely.
37. While these projects are delivering substantial
improvements in Single Living Accommodation, the scale of the
challenge remains enormous. The NAO found that:
At current planned funding levels, the Department
will increase the number of single bed spaces at the requisite
standard from some 25,000 (22% of the requirement) at the beginning
of 2003-04 to around 50,000 (45%) by the end of 2007-08. This
would rise to nearly 75,000 (68%) by the end of 2012-13. Given
the predicted fall in requirement, this leaves a shortfall of
around 35,000 bed spaces below the required standard.[33]
38. The shortfall will be even worse if—as
in the past—programmed improvements are delayed. The NAO's
report identifies significant deferrals in 2006-07:
- In Scotland, £1.3 million
of planned work deferred;
- In the South West, 231 projects delayed to meet
budget cuts, and 83 upgrades and 75 redecoration projects deferred.[34]
These deferrals may not have related to living accommodation,
but they demonstrate the risk that the programmed improvements
to Single Living Accommodation are not achieved.
39. We asked Vice Admiral Laurence whether some Service
personnel could be living in sub-standard accommodation for many
years to come. He considered that the MoD had set its standards
for accommodation "extremely high", aiming for every
member of the Armed Forces to have a single room with en-suite
facilities. He acknowledged that there was a "huge backlog"
and told us:
We are doing what we can. We will not reach our very
highest standards for perhaps ten or 20 years; but I do not think
it is true to say that those people not living in those very highest
standards are living in substandard accommodation.[35]
40. While much progress has been made, the condition
of some SLA remains appalling. We visited Cavalry Barracks, Hounslow,
currently home to the 1st Battalion, Worcestershire
and Sherwood Foresters Regiment (1 WFR), and several 'guest' units;
and Elizabeth Barracks, Pirbright, home to the 1st
Battalion, the Royal Anglian Regiment (1 R ANGLIAN). Both 1 WFR
and 1 R ANGLIAN are currently on operational deployment. The accommodation
provided was disgraceful. At Hounslow, we found barrack blocks
with overflowing drains and repairs which had been left unattended;
at Elizabeth Barracks, we saw where NCOs slept eight to a room,
with minimal privacy and negligible storage. We were told that
soldiers from 1 R ANGLIAN on deployment in Afghanistan had more
comfortable accommodation than their comrades left behind in Pirbright.
In contrast, we saw magnificent new accommodation for Army recruits
at Alexandra Barracks, home of the Army Training Regiment (Pirbright).
41. The concern was expressed to us that poor accommodation
was having a serious effect on morale and retention, especially
among NCOs. Vice Admiral Laurence argued that accommodation issues
were not reflected as a significant reason for leaving the Armed
Forces in the Continuous Attitude Surveys, but nonetheless conceded,
"I am absolutely convinced that it is a factor in there somewhere.
I am convinced that for personnel and, in particular, their families
accommodation is a factor".[36]
42. We welcome
the steps which are being taken to improve and modernise Single
Living Accommodation, and have seen some new accommodation which
is first-rate. However, it is not clear what the strategy is and
some accommodation remains appalling. This is unacceptable. Quite
apart from this being poor management of property, accommodation
is an important factor in retention, and the MoD must do more
to address the condition of accommodation if it is not to lose
experienced personnel who are very difficult to replace. The MoD
must, as a priority, put right the worst accommodation as well
as that which can most easily be improved.
Regional Prime Contracts
43. Improvements to existing Single Living Accommodation
come under the new Regional Prime Contracts (South West, South
East, Central, East and Scotland). The five contracts provide
primarily estate services, for example, grounds and building maintenance
and decoration, and some new building work.[37]
The NAO report says that estate procurement was previously undertaken
by many parts of the MoD and was hampered by many client-customer
interfaces, imprecise allocation of risk and vulnerability to
fraud and malpractice. Problems including poorly directed funding,
inconsistencies in approach and varying standards led to a poor
quality estate.[38]
44. The implementation of the RPCs is intended to
deliver through-life value-for-money improvements in estate management
of the order of 30% by 2013. According to the MoD, this will be
achieved through "improved planning, supply chain management,
incentivisation, continuous improvement, economies of scale and
partnering".[39]
The improvements which the RPCs are intended to bring about are
measured using an Estate Performance Measurement System (EPMS),
which was piloted in early 2005 and then rolled out more widely.
However, the MoD cautioned that the poor availability of historical
data has "hamper[ed] assessments", though it was confident
that the RPC system would deliver substantial savings.[40]
45. The NAO report concluded that, while the RPCs
were improving the way the estate was managed, it was too early
for this to have had an impact on the overall quality of the estate.
It noted that the MoD had faced affordability constraints across
the defence budget in 2006-07 and Defence Estates had to find
savings of £13.5 million (4.5%) in the funding of Regional
Prime Contracts largely through deferrals in planned maintenance
repair.[41]
46. During our visit to Cavalry Barracks, Hounslow,
we heard dissatisfaction with the complexity of the new contractual
arrangements. We were told that, prior to the introduction of
the Regional Prime Contracts, each district had received an allocation
of money for maintenance, and the General Officer Commanding had
had the ability to inject additional resources from elsewhere.
There was now an arrangement whereby Defence Estates represented
the customer, while the Army Infrastructure Organisation at Wilton
controlled a budget from which it released funds to Defence Estates
for maintenance as required; Defence Estates then approached the
contractor to carry out the repairs. This was seen as excessively
cumbersome.
47. We were also told that there were frequent disputes
with the contractors on the distinction between routine maintenance
and improvements to the fabric of buildings; a broken sash window,
for example, might lie unrepaired while Defence Estates and the
contractor argued whether the broken window constituted maintenance
or was the result of the poor fabric of the building.
48. The Regional
Prime Contracts are intended to improve the maintenance of Single
Living Accommodation, but it is clear that there are significant
problems in the way the they are operating in practice. We recommend
that the MoD provide us, in the response to this report, with
a progress report showing how these contracts are performing against
the expected improvements.
23 Ev 20, para 20 Back
24
Q 6 Back
25
Ev 21, para 26 Back
26
Defence Estates, Agency Annual Report and Accounts 2005/06,
HC (2005-06) 1273, para 1.5 Back
27
Ev 21, para 22 Back
28
HC (2006-07) 154, p 19, Box 2 Back
29
"Colchester gets keys to 'new' Garrison", Defence
News: Estates and Environment, 26 September 2006, www.mod.uk Back
30
See Qq 73-76 and footnote to Q 74 Back
31
Q 78 Back
32
http://www.nao.org.uk/publications/workinprogress/MoD_PFI.htm Back
33
HC (2006-07) 154, p 15 Back
34
HC (2006-07) 154, Appendix 5. See also Q 10 Back
35
Q 11 Back
36
Q 68 Back
37
HC (2006-07) 154, p 51 Back
38
ibid., para 1.4 Back
39
HC (2005-06) 1394, p 151 Back
40
ibid., p 152 Back
41
HC (2006-07) 154, paras 8-9 Back
