Armed Forces Covenant Annual Report 2017 Contents

8The Covenant in Business and the Community Covenant

The Covenant in Business

138.The Covenant in Business (also known as the Corporate Covenant) is a voluntary pledge from businesses and other organisations that wish to demonstrate their support for the Armed Forces community. In December 2017, the number of organisations that had signed a Corporate Covenant reached 2,000. Each organisation is encouraged to offer support in a way most appropriate to their situation and capacity, with the pledge document including a variety of options. These include employment support for veterans, Reservists, Service spouses and partners, as well as support for cadet units, Armed Forces Day, and discounts for the Armed Forces community. There is also an opportunity for companies and charitable organisations to add their own commitments based on local circumstances.

139.The 2017 Covenant Annual Report stated that “a major focus for 2018 will be an independent review of the Covenant in Business, commissioned and funded by the Forces in Mind Trust, supported by the Ministry of Defence (MoD), to identify and promote the best practice from across the full spectrum of major corporations through to small and medium enterprises and encompassing the private, public and third sectors”.190 The MoD will also, in consultation with business, introduce key performance indicators for the Covenant in Business.191

140.Lieutenant General (Retd) Sir Andrew Gregory, Controller, SSAFA, commented that the Covenant in Business worked well when there was genuine engagement by a company in looking at how it could achieve the aims of their pledge in terms of how they were supporting Service personnel and families, how they were supporting and encouraging Reservists, how they were supporting the transition process for Service leavers, and how they were supporting military charities. The challenge was to ensure “it doesn’t just become something they can put on their letterhead and use without delivering”.192

141.Witnesses agreed that Service charities and Government Departments could apply pressure to their supply chains and partners to engage in the Covenant and suggested that this should be taken up by the Covenant lead Minister in each Department.193 Rt Hon Tobias Ellwood MP, Parliamentary Under-Secretary of State for Defence, MoD, was keen to explore whether a requirement could be applied to Government suppliers that they should employ a set quota of veterans before they could be considered for Government contracts.194 The Minister understood that such a system existed in the United States, where the Department of Defense required 7.5% of any supplier’s workforce to be from the veterans’ community. At present, EU legislation was interpreted by the Department as preventing the UK from introducing such a requirement although this would change after the UK left the EU.195 A first step might be making it clear that the Government would like companies or businesses to declare the number of Reservists they have on their books.196

142.In respect of the Minister’s use of the US as an example to be considered by the UK, it should be noted that the US quota does not include all veterans. The US system sets an annual ‘protected veteran’ hiring benchmark, not one of mandatory recruitment. A ‘protected veteran’ includes only disabled veterans and recently separated veterans (i.e. still within the three-year period beginning from the date of discharge or release from active duty).

143.We fully support the Government’s work to ensure that businesses support the Covenant. However, the Government must ensure that businesses, particularly its own suppliers, do not regard this as simply a way of enhancing their public image. We look forward to the outcomes of the timely independent review of the Covenant in Business, commissioned and funded by the Forces in Mind Trust.

144.We also support the Minister’s suggestion that companies should include information about their support for the Covenant in their Annual Reports and the Government should proactively promote this idea amongst businesses. We recommend that the Forces in Mind Trust be asked to consider this as part of its independent review of the Covenant in Business.

145.We fully support the proposal that one of the factors in a company being awarded a Government contract should be demonstrable support for the Covenant, for example with a minimum 2.5% of the workforce being veterans.

Community Covenant

146.The Community Covenant encourages local communities to support the Armed Forces community in their area and promote public understanding and awareness of the issues affecting the Armed Forces community. Every local authority in England, Scotland and Wales has signed a Community Covenant, as have four local authorities in Northern Ireland.197 Community Covenants may differ significantly, with the nature of the support offered determined by both the need and the capacity of the local authority.

147.The Local Government Association and the Forces in Mind Trust commissioned research into how the Covenant was being delivered at a local level and presented a report in August 2016.198 One of the key areas they examined was the core infrastructure that local authorities needed to put in place to successfully implement the Covenant. A range of practice was discovered across local authorities, including:

148.In early 2017, the MoD introduced the local grants programme to enable various initiatives promoting the integration of military and civilian communities, as well as programmes to assist Veterans with the development of life skills to ease transition.200

149.A Forces in Mind Trust and MoD-led Action Group has been created to take forward the recommendations of last year’s Our Community, our Covenant report. One of the key recommendations of the report was to introduce guidance for local authorities to ensure consistent delivery against Covenant obligations. The MoD has published the new guidance, which includes annexes covering regional variations. The Covenant Annual Report 2017 says “the Government will continue to drive delivery of the recommendations of the Our Community, Our Covenant report via the newly formed Action Group”.201

150.In March 2017, almost £3.5 million of Covenant funding was committed to 23 ‘clusters’ of local authorities across England, Scotland and Wales.202 The awards were made to bids prioritising strengthening local government delivery of the Covenant and encouraging development of best practice in delivery to Armed Forces families in the community. Resource will be used to train front-line staff and build sustainable working between the various organisations which engage with, or aim to engage with, serving personnel, Veterans and their families.

151.Further initiatives include asking the Veterans Board to consider a cross-Government and Service charities communication campaign to provide some consistent messaging about veterans and why they are a positive asset in both the community and employment.203 The Minister added that it was important to ensure best practice was shared.204

152.The encouragement of local community engagement with, and knowledge of, the Covenant is vital to ensuring that veterans and serving personnel are not disadvantaged because of their service. It was therefore alarming to hear about disparities in local authorities’ delivery of, and engagement with, the Covenant. In response to our report, the Government should set out how it intends to address such disparities. This should include an update on the Forces in Mind Trust and MoD-led Action Group’s work on taking forward the recommendations of the “Our Community, Our Covenant” report and also the effectiveness of the local grants programme in promoting the integration of military and civilian communities and in implementing programmes to assist veterans with the development of life-skills to ease transition.


190 Ministry of Defence, Armed Forces Covenant Annual Report 2017, 18 December 2017, p 61

191 Ministry of Defence, Armed Forces Covenant Annual Report 2017, 18 December 2017, p 11

194 Q119 and Q228

195 Q119; Ministry of Defence (AFC0001)

197 Armed Forces Covenant website, Who has signed the Covenant (accessed 20 June 2018)

198 Forces in Mind Trust/Local Government Association, Our Community, Our Covenant: Improving the delivery of local Covenant pledges, August 2016

199 Forces in Mind Trust/Local Government Association, Our Community, Our Covenant: Improving the delivery of local Covenant pledges, August 2016, pp 18–19

200 Ministry of Defence, Armed Forces Covenant Annual Report 2017, 18 December 2017, p 10

201 Ministry of Defence, Armed Forces Covenant Annual Report 2017, 18 December 2017, p 12

202 Ministry of Defence, Armed Forces Covenant Annual Report 2017, 18 December 2017, p 10




Published: 30 June 2018