Examination of Witnesses (Questions 40-59)
MINISTRY OF
DEFENCE & DEFENCE
ESTATES
MONDAY 14 MAY
2007
Q40 Mr Mitchell: As I read the document,
it seems a bit pathetic actually. It is a mess, but it reads like
a mess that is not particularly your fault. Defence has been subject
to a paring-down process and to the peace dividend, so long-term
cuts and overstretch have been the characteristic result of defence
spending for some time. Then there are sudden panics, such as
the one just a few months back, when families appeared on television,
pointing to rats and things popping up the drains, and there were
lavatories that did not flush. I felt quite sympathetic; we have
been campaigning against the privatisation of council housing
for a long time. That means you are pulled one way and the other,
does it not? You are driven in that situation to patch-up, temporary
measures and to putting money into sudden fashions such as sports
grounds or sports facilities or whatever, while the whole mass
deteriorates. How far is this the product of the cuts in defence
spending that have taken place over the past few years?
Bill Jeffrey: I certainly do not
think it is a product of levels of defence expenditure in the
past few years. If you look back further, you will see that there
was undoubtedly a period when the estate received less attention
than it has been receiving in the past few years. Arguably, the
Report is a story of quite substantial investment in recent years,
but with a great deal more still to do.
Q41 Mr Mitchell: There are complaints
that you cannot send an Army that is not properly equipped into
Iraq and there are all sorts of pressures on the Navy. There is
the whole business of overstretch, so is this not bound to be
an area in which there are economies?
Bill Jeffrey: Putting to one side
for the moment the fact that the additional costs of the major
deployments to Iraq and Afghanistan are met from the reserve and
the Treasury has never refused us that, it is certainly the case
that the defence budget has to fund aspects of current deployment,
not least to attempt to preserve capability. Therefore the money
that we have has plenty of competing claims on it. That is undoubtedly
the case, but my sense is that both our ministerial team and our
senior civil service and military team would desperately like
to do more in this area if we could.
Sir Ian Andrews: I go back a long
way and certainly when I was doing the admiral's job in the late
1990s, the estate was managed in a very dispersed way in lots
of different stovepipes. It was managed by budget holders who
applied different priorities to it and when there were pressures,
the estate was often the first port of call for reductions. When
we brought the management of the estate together in one place
within Defence Estates, that was very much part of bringing a
much more strategic approach to the way in which we funded and
prioritised across that estate.
Q42 Mr Mitchell: But local management
might be more responsive to particular demands. If there are particular
problems in houses at Catterick or whatever, would not local management
be much more responsive to the kind of pressures that develop?
Sir Ian Andrews: But I think management
can be responsive only to the extent that it has the resources
to do it. There was definitely a huge amount of dissatisfaction
with the then management arrangements. Over the period, as we
brought it together in the centre of the Department, there was
a very substantial increase in the funding that was available
for the estate. For example, in 2001, as I recall, the then Secretary
of State announced a major single living accommodation modernisation
programme involving some £1.3 billion over 10 years, prompted
by the decision to which Mr Jeffrey referred a moment ago that
it was no longer acceptable for our single accommodation personnel
to be sharing ablutions and so on. We very significantly raised
the bar and said, "That is not good enough. We will put additional
resources into this area and we will embark on a major modernisation
programme to take that forward." That is what is happening
now.
Q43 Mr Mitchell: On the background
to that explosion of discontent, was the appearance of people
on television this year to say that they were living in appalling
accommodation spontaneously generated by those families? Or was
it something the Ministry of Defence encouraged to get more money
for its properties? What was the cause?
Bill Jeffrey: My guess—it
is no more than a guess—is that it reflected the fact that
parts of our estate are still deeply unsatisfactory.
Mr Mitchell: That is true.
Bill Jeffrey: It was an authentic—
Q44 Mr Mitchell: What was the occasion
of them going on the television all over the country to say that
when they had not done so before?
Vice Admiral Tim Laurence: There
is one point I would make about that, which is that of course
we are now producing some very high-quality modern accommodation—both
housing and single living accommodation—and one of the problems
is that those who are left living in the older accommodation now
see the benefits of the new stuff and feel a little hard done
by. Why the particular attention came to it in October or November
last year, I do not know, but that could have been a factor.
Q45 Mr Mitchell: Let me move on.
In a situation of obvious overstretch, is not the money for minor
public works being misused, in the sense that it is being used
like a puncture repair kit—apply a bit here, apply a bit
there, use it to provide all-weather sports facilities and patch
up buildings? That is actually uneconomic and not very sensible.
Bill Jeffrey: Any accommodation
programme will include some minor works. It will always be the
case, if you look at a complex estate like ours, that there will
be things that are worth doing that are quite limited in scope.
Q46 Mr Mitchell: Yes, but some work
that has been deferred is then reintroduced as minor new works.
It is just a change of name.
Bill Jeffrey: Largely, the work
that was deferred was to do with redecoration and that sort of
thing. The works that were funded by the single services, and
for which funds were injected separately, were typically minor
works. As the Admiral said, a view was taken that, by and large,
there were higher priorities than the more routine work that was
being deferred.
Q47 Mr Mitchell: But if you are using
minor new works—any of them—like a puncture repair
it, you cannot prioritise the work. You will do work that is inessential
under the guise of minor new works.
Vice Admiral Tim Laurence: It
is wrong to characterise all the work as puncture repairs. I would
characterise it as the customer saying what their highest priorities
are, deciding how they want to spend the money that they have,
and handing it over to Defence Estates to spend it. The Report
made a recommendation about the process by which that is done,
and the prioritisation. I agree that we need to look at it. In
fact, we have looked at it, and this year we introduced what we
hope will be a better process for injecting funds into minor new
works. I think that it will address the point that the Report
made.
Q48 Mr Mitchell: It seems odd that
there are all these problems with defence properties—it
is appalling that it will take 20 years to upgrade the family
accommodation—at the same time that the Government are pressing
local authorities to privatise their housing stock and hand it
over to registered social landlords on the grounds that that will
bring in outside money that can be used to upgrade things. Has
that kind of solution been considered for Defence Estates?
Bill Jeffrey: In essence, that
is the solution that was adopted for the family estate when large
parts of it were sold to a private company in 1995-96. We now
lease back much of the same estate from the same company.
Q49 Mr Mitchell: But you do the maintenance,
so it was not so much a large-scale voluntary transfer.
Bill Jeffrey: The prime housing
contractor does the maintenance. Certainly, many of the improvements
that we will make to increase the number of completely satisfactory
single-living properties in the next few years—and have
made in the past few years—will be through major PFI deals
such as the Allenby/Connaught one, which is generating much good-quality
accommodation with private funds.
Q50 Mr Mitchell: But why was maintenance
kept by the Ministry of Defence if the change in 1995 was similar
to a large-scale voluntary transfer? The whole point of such a
transfer is that somebody else takes the whole thing off your
hands.
Bill Jeffrey: One of my colleagues
might give a more confident answer to that question than I can.
Sir Ian Andrews: If I recall correctly,
the Committee in a former guise looked at that transaction in
some detail back in, I believe, 1997.
Q51 Mr Mitchell: Well, I have not.
Can you give us any explanation of the splitting of roles?
Sir Ian Andrews: The decision
was taken on the basis of what was seen at the time to be the
most effective way of handling the matter. With the benefit of
hindsight, I would not choose to do it that way now, but I was
not part of the decision at the time.
Q52 Mr Mitchell: We will move on.
We are talking about an enormous amount of property.
I see that you are the United Kingdom's second-largest landowner.
Who is the first? Is it the Duke of Westminster or the Queen?
Vice Admiral Tim Laurence: The
Forestry Commission.
Q53 Mr Mitchell: I never thought
of that. There must be, to a degree—it is not dealt with
in the Report, but it must surely exist—a kind of trickle
down factor, by which you want to hang on to things just to keep
them, when you could well cut down the amount of land, property
and buildings you have got.
Bill Jeffrey: I do not observe
that, Mr Mitchell. If you look back at the history of the last
few years, you will see that one of the strategic objectives of
Defence Estates is to get to an estate that is smaller and more
fit for purpose. We have disposed of some significant properties
and are continuing to do so—there is the plan, at the moment,
to sell the Chelsea barracks site.
Q54 Mr Mitchell: So you are satisfied
that you have got all you need.
Bill Jeffrey: I am satisfied that
there are means of disposing of anything we do not need, and that
there are good plans for further reduction. I do not think that
there is any innate tendency in the Department to hold on to things
for the sake of it.
Q55 Mr Mitchell: There has been in
the past.
Bill Jeffrey: There may have been,
but at the moment—and this comes back to the question about
the extent to which we can deploy receipts, particularly on other
defence properties—the incentive to get rid of what we do
not need is very significant.
Sir Ian Andrews: To pick that
up point, I have been associated with the estate for more than
10 years now, and certainly in my time there has not been any
drive to retain what we did not need. We have been very clear
on that throughout the period. More than 160,000 hectares of the
1% of the UK represented by the defence estate is training areas—areas
that we require to prepare our young men and women for the rigours
and dangers that they will face on operations.
Q56 Mr Mitchell: That land does not
need much maintenance because you are shelling it and bombing
it all the time, which keeps it well tilled.
Sir Ian Andrews: Indeed.
Q57 Mr Mitchell: As the services
shrink, surely you do not need all that estate.
Sir Ian Andrews: No, and we have
shed a lot of land over the last few years; but particularly on
our training estate—if you look back at the strategy for
the defence estate, In Trust and On Trust, which we published
first in 2000 and revised and reissued in 2006, there is an illustration
there of how the safety ranges associated with modern weapons
are much greater than those of their predecessors. The training
estate is under great pressure, but also on the built estate we
are constantly looking for opportunities to rationalise. The built
estate includes barracks, domestic accommodation, airfields and
so on. As the chairman of the Defence Estates Committee, I oversee
a process that is driving down a programme to make sure that that
estate is as small and fit for purpose as we can possibly make
it. We have a duty—a very clear one—to the country
to ensure that we are not consuming any more land or property
on this crowded island than we need for defence purposes.
Q58 Mr Mitchell: Let me put a question
to the Vice Admiral. You are a serving officer. Is it the most
efficient use of that position if the post of Chief Executive
goes to a serving officer?
Vice Admiral Tim Laurence: That
is a decision that was taken by the Civil Service Commissioners
who appointed me.
Q59 Mr Mitchell: It is part of the
job. It has not always been the case, has it?
Vice Admiral Tim Laurence: No.
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