Armed Forces Covenant Annual Report 2017 Contents


The principles of the Armed Forces Covenant are enshrined in law. Therefore, it is the responsibility of the whole of Government to ensure that they are being successfully communicated and implemented. This cannot be done by the Ministry of Defence (MoD) alone. The Government has acknowledged the need for stronger governance structures for the implementation and delivery of the Covenant. We welcome the establishment of the Veterans Board and the appointment of ‘lead’ Ministers in each relevant Government Department. However, delivery of the Covenant is also UK-wide and we call on the Government to ensure the full participation of the devolved administrations in the governance of the Covenant, especially as part of the Veterans Board. This will help ensure uniformity of delivery and the sharing of best practice.

The new arrangements must be kept under review, so that momentum is maintained on Covenant pledges. We therefore recommend that an element of independent scrutiny must be built into the monitoring of the Covenant. This is particularly important as the Government proceeds with the new and comprehensive Veterans Strategy, informed by such valuable initiatives as the Veterans Gateway and the Map of Need. Independent scrutiny should help maintain the correct balance between the needs of veterans and those of current Service personnel.

We acknowledge that LIBOR funding has delivered positive results for veterans and for current Service personnel and their families; but we are concerned by the National Audit Office’s findings that the Treasury and the MoD still cannot confirm that charities spent all LIBOR grants as intended. Although the Government is undertaking a retrospective review of 236 projects, it is disappointing that this review, originally due to report in December 2017, has yet to be completed. This delay is unacceptable and has resulted in heightened concerns about the use of LIBOR funding for Covenant projects. The completion of the review must be prioritised.

We are particularly concerned about poor performance and serious challenges in respect of accommodation. The record of CarillionAmey, the Ministry of Defence and the Defence Infrastructure Organisation (DIO) in managing Service accommodation has been lamentable. It is clear to us that the contract was ‘not fit for purpose’ and it is unacceptable that there are no enforcement measures that can be imposed on CarillionAmey—which is now solely owned and operated by Amey. This is because they met the minimum standards set out in the contract—standards which were woefully low. In addition, the MoD’s agreement with Annington Homes has proved to be a disastrous failure and has exposed the Department to considerable risk. That flawed agreement is yet another example from which the MoD, the DIO, and wider Government—especially the Treasury—must quickly learn lessons. The Modernising Defence Programme needs to address the potential implications for the core MoD budget.

We welcome the Government’s willingness to show some flexibility for Departments wishing to move away from the public sector pay cap of 1%. Still, we note that no additional funding will be made available to the MoD for increases above this level for Service personnel, if such increases are awarded. The pay cap has had a negative impact on the morale of, recruitment to, and retention in the Armed Forces. The MoD must ensure that these factors are taken into account when determining the pay award. An award limited to 1% would be very disappointing, and risk further undermining morale and increasing the negative effect of pay restraint on recruitment and retention.

Our report also considers other specific issues in respect of healthcare, education, the Covenant in Business and the Community Covenant.

We enthusiastically support the Covenant. Our Report is intended to be a constructive contribution to its delivery, and to the achievement of its goal: that Service personnel and Veterans should suffer no disadvantage as a result of their current or former choice of career.

Published: 30 June 2018