Armed Forces Covenant Annual Report 2017 Contents

Conclusions and recommendations

The Armed Forces Covenant at the centre of Government

1.We welcome the creation of the new Veterans Board, even though it does not have formal Cabinet Sub-Committee status. We are pleased to note the Minister’s commitment to meet the single Service Families Federations, Service charities and other interested bodies prior to each meeting of the Board. It is vital that access to Ministers and Departments is maintained for all those implementing the Covenant, so that those outside Government can highlight concerns over the delivery and implementation of the Covenant. We note that the Board will meet twice a year, despite our predecessors having recommended that it should meet four times a year. (Paragraph 19)

2.The status of the Veterans Board and the frequency of its meetings should be kept under review: the momentum of Covenant implementation must not be lost because of a lack of strategic direction and involvement from the highest levels of Government. In its response to our report the Government should set out how it intends to measure the effectiveness of the Board. (Paragraph 20)

3.We were pleased to hear that the Government wishes to engage and co-ordinate more closely with the devolved administrations on Covenant matters. We believe that it would be a positive step for the devolved administrations to have full-member representation on the Board. This would provide an opportunity for best practice from every area of the UK to be shared and adopted, leading to better coordination and delivery of the Covenant across the country. (Paragraph 21)

4.In response to our report the Government should set out how it will take forward the involvement of the devolved administrations at all levels of the structures charged with the implementation of the Covenant. (Paragraph 22)

5.We welcome the Veterans Board’s initiative in appointing lead Ministers for Covenant and veterans’ issues in each relevant Government Department. We see these roles as giving greater focus and momentum to each Department’s implementation of the Covenant. However, we are concerned at the apparent delay in making these appointments and that it took a request from us to secure a list of these Ministers and to make it publicly available. This information is vital to all those—whether inside or outside Government—involved in implementing and delivering the Covenant, as it enables them to raise concerns with the appropriate person in more timely and efficient manner and it should also ensure greater cross-Government coordination. This information should be included in future editions of the Covenant Annual Report and should also appear on each Government Department’s website and other relevant websites. (Paragraph 25)

6.While we acknowledge the role of the External Members of the Covenant Reference Group in challenging the Government’s implementation of the Covenant pledges, we are concerned that the perception persists that the MoD and other Government Departments are ‘marking their own homework’ when assessing their effectiveness in the delivery of Covenant pledges. There is a risk that this could undermine confidence in the Government’s implementation of the Covenant. There is also a danger that this problem will become more acute as additional measures and statistics are included in future lists of Covenant commitments. We also note concerns about the difficulty of identifying ways of measuring outcomes and outputs. A priority for the Veterans Board should be the introduction of measures and statistics that assess the impact of the Covenant in ensuring that progress is being made in removing disadvantage for serving personnel, families and veterans. (Paragraph 32)

7.We repeat our predecessor Committee’s recommendation that an independent assessment should be made of progress towards Covenant commitments. This work should also include the development of ways of measuring impact, outputs and outcomes as well as inputs. The measures used by the devolved administrations in their different systems and the establishment of an independent Armed Forces Covenant Programme Office should also be taken into consideration. We acknowledge this would be a major study and therefore recommend that the Government should consult the Forces in Mind Trust and other appropriate organisations to establish the best way to take this project forward. Consideration should also be given to funding this work from the Covenant Fund. (Paragraph 33)

8.We also note the Minister’s frustration at the limitations in the MoD and across Whitehall “to make sure that things get done”. We agree with the Minister that a cultural change is needed and that faster progress is urgently required. Ministers and their Private Offices should be raising issues directly and speedily with their opposite numbers in other Departments, and, as a priority, the Veterans Board must develop the appropriate mechanisms to hold Government Departments to account within their areas of responsibility. As a first step in focusing each Department’s work on the Covenant and veterans issues, we recommend that relevant Government Departments should include a section in their Annual Reports and Accounts on how they have discharged their responsibilities in these matters. This should specifically include an examination of progress by Departments in encouraging their supply chain to sign Covenant pledges and make commitments on the employment of veterans and Reservists. (Paragraph 34)

9.We also recommend that, in addition to a lead Departmental Minister, Departments should nominate one of their external board members as a champion for the Covenant with responsibility for monitoring the Department’s delivery and implementation of Covenant pledges. They should also be responsible for the Department’s input into the table of commitments and the measurement of how these are progressing in the Covenant Annual Report. (Paragraph 35)

10.We welcome the commitment to the development of a comprehensive cross-Government Veterans Strategy and the planned establishment of a Veterans Unit. We acknowledge that it is appropriate to hold a wide-ranging consultation as part of the Strategy’s development, but in its response to our report the Government should clarify whether the Strategy will be published in Autumn 2018 or will slip into 2019. (Paragraph 38)

11.The information provided by the ‘Map of Need’, the veterans question in future censuses, and the nature of enquiries to the Veterans Gateway will be essential for developing the Veterans Strategy. We also welcome the intention to introduce the new Veterans ID. We expect the Government to provide us with regular updates on these initiatives, as well as with assurances that sensitive data about the home addresses of veterans will be held safely and securely. (Paragraph 44)

12.It is important that the Veterans Gateway does not simply duplicate the services already provided by Service charities. Nor should it become the norm for Service charities, which are involved in operating the Gateway, routinely to refer enquiries—made via the Gateway—to their own services In its response to our report the Government should set out the measures it has put in place to ensure that this does not happen. The Government should also devise Key Performance Indicators (KPIs) for the Gateway and commit to publishing performance against them in the Covenant Annual Report. The KPIs should take into account the outcomes of Ulster University’s independent evaluation of the value for money and the impact of the Veterans Gateway. (Paragraph 45)

13.We were concerned to hear that war widows and widowers believe that they are at risk of being forgotten and that they have been very neglected for a long time. We were disappointed to learn from the War Widows Association that this was the first time that the Covenant Annual Report had mentioned the term “war widow” and recognised them as an important cohort. While we acknowledge that the Minister recognised that more attention was needed to the requirements of war widows and widowers, the MoD must take urgent action to ensure that they are fully recognised as members of the veterans community and fully covered by the Covenant. An important first step will be the inclusion of war widows and widowers as an integral part of the Veterans Strategy. It is also crucial for the MoD to identify ways of educating the public to realise that war widows include young people as well as old, and people of both genders. (Paragraph 52)

14.As part of ensuring that war widows and widowers are fully incorporated into the veterans community, the Government should urgently address the concerns raised with us that a War Widow’s Pension is incorrectly perceived as a benefit, rather than compensation, and the potential negative impact this might have when a widow is assessed for an income-based benefit. The Government must also urgently address the absurd anomaly where a war widower or widow, who lost his or her pension upon cohabitation or remarriage, and did not get it reinstated because it was before the reinstatement date, could however get it restored by temporarily splitting up and then reuniting with the former spouse or partner. (Paragraph 53)

15.The Government must ensure that the Covenant does not become too focused on veterans to the detriment of current Service personnel and their families. (Paragraph 56)

16.We request that the Government set out the measures it will take to ensure that the Covenant is balanced between the needs of veterans and serving personnel and their families, which should include a greater emphasis on increasing awareness of the relevance of the Covenant within current Service personnel and their families. (Paragraph 56)

Covenant Funding

17.We acknowledge that LIBOR funding has delivered positive results for veterans and current Service personnel and their families. We are pleased to hear that since 2015 a more rigorous system has been in place to ensure effective monitoring of projects funded under the scheme, although we note concerns that the application process is now too complicated. The MoD should look at ways of simplifying the process while maintaining robust safeguards. (Paragraph 67)

18.We are concerned by the NAO’s findings that the Treasury and the MoD cannot yet confirm that charities spent all LIBOR grants as intended. While we acknowledge that 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 around the use of LIBOR funding for Covenant projects. The Department must set out clearly in its response to our report what progress has been made. We expect early sight of the Report Review. The response to this report should also set out what options, including legal, are available to the Department to recover grants that have not been used as intended. The MoD and Treasury must also set out in detail what measures are in place to monitor any future grants. Grants should not be made without terms and conditions that provide for monitoring the project’s delivery and achievements. The Government must take steps to ensure that there is no further delay to the promised external evaluation of the use LIBOR funds. (Paragraph 68)

19.We are also concerned by suggestions that LIBOR funds have been used for core MoD activities. We note the Minister’s statement that the use of LIBOR fines to support additional facilities and programmes over and above the core activities, support, and infrastructure provided by the MoD is entirely consistent with the scope of the LIBOR fund. In response to our report, the MoD should provide information on the additional facilities and programmes that have been funded from LIBOR. We will be asking the Comptroller and Auditor General for a review of these grants. (Paragraph 69)

20.It is a positive step that the Covenant Fund will be governed as an independent trust. However, the MoD must ensure that appropriate safeguards are in place to ensure that the smallest possible proportion of the £10 million annual Covenant Fund will be taken up by the running of the fund. In response to our report, the MoD should clarify whether the Trust’s agreement to limit its spending on running costs to £500,000 per annum is on a voluntary basis, or whether it is part of the Trust’s legal status as a registered charity. The MoD should also set out what safeguards it has in place to prevent an unexpected increase in the Trust’s running costs—for example, due to property repairs—having a detrimental impact in the funding available for Covenant grants. We welcome the initiation of the study by Anglia Ruskin University to develop an Outcomes Framework to be used by Covenant Fund grant holders to show the impact that their grants were having and ask the MoD to keep us informed of the study’s progress. (Paragraph 75)


21.The performance of CarillionAmey, the Ministry of Defence and the Defence Infrastructure Organisation (DIO) in managing Service accommodation has been lamentable. It is clear that the National Housing Prime contract was ‘not fit for purpose’ in terms of its budget and Key Performance Indicators. It is unacceptable that this has meant that there are no enforcement measures that can be imposed on CarillionAmey, as they have met the minimum standards set out in the contract (which were woefully low). Concerns over the maintenance of Service accommodation pre-date the CarillionAmey contract and it is obvious that the MoD and the DIO have not learned the necessary lessons. The culture within the MoD and DIO must change to ensure that this failure is not repeated. The DIO’s plan to examine different strategies for future contracts, including using more than one provider, is a welcome first step. (Paragraph 84)

22.In response to our report the MoD should set out detailed plans on how it will learn lessons from this appalling story and how it will apply them to future contracts—including how the DIO plans to take forward its plan for a different strategy. Plans for this new strategy should be accelerated as a matter of urgency, as the current level of service provided to Service personnel and their families, as confirmed by the Armed Forces Continuous Attitude Survey, is simply unacceptable and should no longer be tolerated. Failure to improve the maintenance of Service accommodation will have a major adverse impact on recruitment and retention in the Armed Forces. (Paragraph 85)

23.The Annington Homes agreement is a disastrous failure and has exposed the Department to considerable risk. This agreement is yet another example from which the MoD and the DIO, and wider Government—especially the Treasury—must learn lessons and they must do so quickly. The Modernising Defence Programme must address the potential implications for the core MoD budget. In its response to our report, the Government must explain how it will ensure that such a signally bad deal will not occur again. The Government should set out in its response the contingency measures it is considering, or which are already in place, to lessen the impact on future rents. It should also include updates on the Future Accommodation Model pilot schemes and on how the wider project may be affected by the future MoD and Annington Homes negotiations. We expect six-monthly progress reports on these matters. (Paragraph 92)

24.We are concerned that confidence in the Combined Accommodation Assessment Scheme remains low and that communication about the scheme remains poor. We support the establishment of a working group to look at ways of simplifying the scheme and request a further update on its progress from the MoD in its response to our report. (Paragraph 97)

25.We are disappointed that the condition of Single Living Accommodation (SLA) remains of such concern and we note the warning we heard in evidence of the potential impact on recruitment and retention. We are further concerned to hear that issues are now arising regarding the condition of more modern SLA accommodation. We also believe that the MoD should make clear whether it believes the companies are fulfilling their contractual requirements. (Paragraph 102)

26.The MoD needs to develop a robust plan to improve SLA. Our witnesses were unsure of how the introduction of a SLA Management Information System would help improve the standards of SLA. In response to our report, the MoD must set out why it believes this information system, which has been in the pipeline for a considerable number of years, will help improve SLA. If the MoD cannot demonstrate this, then consideration should be given to abandoning its development. (Paragraph 103)

27.Overall, the Defence Infrastructure Organisation (DIO) is a woefully underperforming part of the Ministry of Defence, and is known almost universally throughout the Department as ‘DI NO’—in light of its often negative and uninspiring attitude. For years, Service personnel and their families have had to put up with very poor maintenance standards, which would simply not be tolerated in the Local Government / Housing Association sector. This disrespect of Armed Forces personnel and their families is increasingly one of the reasons why people leave the Services. Ministers must urgently grip this dysfunctional organisation and lay out an action plan for radical improvement, to convince Service personnel that they and their families are indeed valued and that their housing needs will be cared for appropriately in the future. (Paragraph 104)

Armed Forces Pay

28.We welcome the Government’s signal that there is some flexibility for Departments to move away from the public sector pay cap of 1%, although we note that no additional funding will be made available to the MoD for increases above this level for Service personnel. The pay cap has had a negative impact on the morale of, and 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. (Paragraph 111)

29.We are also concerned that the move to announcing budgets in November may mean that it is difficult to implement awards recommended by the Armed Forces Pay Review Body and agreed by the MoD on the 1 April each year. The Treasury, the MoD and the Armed Forces Pay Review Body should make every effort to implement awards on time. (Paragraph 112)


30.While we recognise the progress made, we are concerned to hear about continuing difficulties in veterans receiving priority access to NHS medical treatment, when their injuries or ill-health are attributable to their military service. We call on the Government, in partnership with the devolved administrations, to instigate a specific study as a priority to examine and tackle the inconsistencies in how veterans receive priority treatment. Part of the study should consider enhancing the role of local Covenant champions in ensuring that local health care providers are aware of, and implement, this right for veterans. We also note the recent call of the Scottish Veterans Commissioner for a rethink of priority treatment for veterans. In undertaking this reform, however, it is important that any changes are considered within the context of the entire UK, so as not to increase current inconsistencies. (Paragraph 117)

31.We are pleased to hear of the progress being made in mental health provision but acknowledge that disparities still exist across the UK. We call on the Government and the devolved administrations to ensure that best practice is shared and that services across all the different parts of the UK are of a comparably and consistently high standard. (Paragraph 126)

32.We note the establishment in February 2018 of the new 24/7 Mental Health Helpline for serving personnel and their families. In response to our report, the MoD should set out how it will measure its effectiveness and ensure that it does not simply replicate the existing Combat Stress helpline. We expect to receive data on the number of calls received and actions taken in response to calls to both helplines. (Paragraph 127)

33.We welcome the Care Quality Commission’s inspection programme of Defence Medical Treatment Facilities, including MoD Departments of Community Mental Health, and the fact that their inspection reports are publicly available. We look forward to seeing the Annual Report on the inspections (Paragraph 132)

34.In response to our report, the MoD should set out what work is planned to draw together any thematic concerns identified by the individual inspections that apply across the treatment facilities so that necessary improvements can be made. (Paragraph 132)


35.We call on the Government to review the Service Pupil Premium for England, with particular reference to whether it should be increased and whether its range should be extended to under-5s and to all Service children, including those aged 16–18 years across the UK. We also call upon the Government to provide target guidance to help schools use the Service Pupil Premium appropriately. (Paragraph 135)

36.We are concerned that the MoD’s Education Support Fund (ESF) has closed. The Minister confirmed that the ESF was mainly used to fund large relocations such as the return of Service personnel from Germany. Given both the further return of Service personnel from Germany, currently planned for 2019, and the continuing defence rationalisation plan, the closure of the ESF would appear to be short-sighted. In response to our report, the MoD should set out how the services currently funded by ESF will be provided in future. (Paragraph 137)

The Covenant in Business and the Community Covenant

37.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. (Paragraph 143)

38.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. (Paragraph 144)

39.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. (Paragraph 145)

40.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. (Paragraph 152)

Published: 30 June 2018