House of Commons - Public Accounts

Select Committee on Public Accounts Sixty-First Report

1 Improving living accommodation

1. The Department provides accommodation to many members of the Armed Forces and their families. There are currently 47,000 family houses and over 110,000 single living spaces in the United Kingdom.[3] Over 40% of accommodation for families (Figure 1) and more than half of single living accommodation (Figure 2) do not meet the Department's definition of high-quality accommodation and are therefore substandard.

Figure 1. Condition of Service Family Accommodation
Number of Properties

Figure 2. Cumulative delivery of new Grade 1, En-Suite Single Living Accommodation in Great Britain
Bedspaces

Note: SLAM is the Department's Single Living Accommodation Modernisation Programme

2. Operational deployments overseas, where Service personnel often live in basic quarters, have increased in frequency and so the availability of decent accommodation in the United Kingdom is more important than ever. The Department agrees that the standard of accommodation plays a significant role in recruitment and retention.[4] A recent report by the Comptroller and Auditor General showed that 40% of Armed Forces personnel working in trades which suffer from recruitment and retention difficulties were dissatisfied with the quality of their accommodation.[5] Complaints by Service personnel about the quality of housing have been prominent in the media.

3. In the last decade, changes to the design of accommodation mean that the best new and refurbished housing is of a high quality. For example, dormitory accommodation for single Servicemen has been replaced with individual, en suite bedrooms, orientated around shared kitchen and living areas.[6] One side-effect of these improvements in specification is to increase the gap between the best and the worst accommodation, a change which the Department believes is, in part, behind the recent increase in complaints about substandard housing by Armed Forces personnel and their families.[7]

4. In seeking to improve the overall standard of its accommodation, the Department carries out four activities: the maintenance of existing stock to prevent deterioration; the refurbishment of existing stock; the construction of new accommodation; and the disposal of low-quality accommodation through demolition, sale or the termination of a lease.[8] The Department has not done enough in the past to maintain its stock of accommodation in good condition, and it acknowledged that expenditure on housing had often been an early casualty when savings were required.[9]

5. The cost of maintaining existing accommodation is likely to be lower, and so more cost-effective than refurbishment or new construction. The Department has missed opportunities to improve maintenance. In 1995, most defence family houses in England and Wales were sold to a private company, Annington Homes, and leased back by the Department in a deal which raised £1.7 billion. These assets were sold at a discount of between £77 million and £139 million, with the Department retaining responsibility for maintaining houses it no longer owned. We took evidence from the Department in 1997 and criticised these and other aspects of the deal.[10] The Department has acknowledged that it would not enter into the same arrangement again.[11]

6. In 2006, a new contract was let with Modern Housing Solutions to maintain family houses in England and Wales for seven years, at a cost of between £580 million and £690 million. The contract should prevent any further deterioration of the existing stock. In the first year, however, its performance was marred by poor delivery. The Department and the contractor had failed to understand the backlog of work needed, and suffered from inadequate management information. As a result, in 2006-07 the Department had to spend an additional £20 million above the £100 million that had been agreed.[12]

7. The Department is funding a number of projects to refurbish existing dwellings and to construct new accommodation (See Figure 3). Cuts to the budget of Defence Estates in 2006-07 were applied in such a way as to minimise the impact on these projects.[13] Planned investment in quarters for single personnel will still however leave 35,000 substandard bedspaces in 2013, assuming no budget cuts or deterioration of the stock.[14] If the Department is only able to afford 900 upgrades of family houses each year, it will also take more than 20 years to improve all substandard homes.[15] The Department had allocated £17 million for upgrades and £35 million for redecoration and other improvements such as boiler replacements in 2007-08, and it believed that this funding was secure.[16]

8. A proportion of substandard accommodation is in very poor condition, and could have a significant adverse effect on the Service personnel and families who live there, and on morale in the Armed Forces more generally. In response to a report that there had been an infestation of vermin in single living accommodation at the Chilwell site in Nottinghamshire, the Department investigated and found that there had been no incidents of pest infestations at the site.[17] Currently, of the 19,000 substandard family homes, 138 are at the lowest Standard 4 and a further 2,000 are at Standard 3. These properties typically require new kitchens and bathrooms, rewiring, new plumbing and insulation and may be in poor decorative order.[18] The Department agreed with General Sir Mike Jackson's comment that the state of the worst of its accommodation was 'frankly shaming'.[19] Yet whilst it intended to upgrade or dispose of these properties as a priority, the Department had set no deadline for completing this task.[20] It believed that practical difficulties, such as widely dispersed locations and ongoing occupation of the properties, made setting a deadline impossible.

Figure 3. Projects that will deliver new and refurbished accommodation.

Project	Type of accommodation	Timeframe	No. of houses/ bedspaces delivered
Allenby/ Connaught PFI project	Single living accommodation	2006-16	11,000 bedspaces
Single Living Accommodation Modernisation (SLAM) Phase 1	Single living accommodation	2003-08	9,000 bedspaces
Defence Training Review Public Private Partnership Phase 1	Single living accommodation	2008-13	5,000 bedspaces
Single Living Accommodation Modernisation (SLAM) Phase 2	Single living accommodation	2008-13	3,800 bedspaces
Colchester Garrison PFI project	Single living accommodation	2004-08	2,230 bedspaces
Faslane 'Neptune' project	Single living accommodation	2003-09	1,750 bedspaces
Plymouth 'Armada' project	Single living accommodation	2004-08	1,340 bedspaces
Housing upgrade programme	Family accommodation	2007-08 and ongoing	900 houses annually
Northwood Headquarters Public Private Partnership project	Single living accommodation	2006-10	720 bedspaces