{"HashCode":64232847,"Height":841.0,"Width":595.0,"Placement":"Header","Index":"Primary","Section":1,"Top":0.0,"Left":0.0}                            SAC0071

Written evidence submitted by the ministry of defence

 

HOUSE OF COMMONS DEFENCE SUB-COMMITTEE INQUIRY INTO SERVICE ACCOMMODATION - WRITTEN EVIDENCE - SERVICE FAMILY ACCOMMODATION

 

Background

 

1.                  On 13 July 2023, the Defence Sub-Committee of the House of Commons Defence Committee launched an inquiry into Service accommodation, referring to both Single Living Accommodation (SLA) and Service Family Accommodation (SFA).[1] The Committee has requested evidence against the following eight questions:

 

1.      What measures have been put in place to resolve the housing maintenance issues, hold service providers to account and ease the cost of living for Service families?

2.      Do the new Future Defence Infrastructure Services (FDIS) contracts for SFA represent value for money and are they operating effectively?

3.      What is the Ministry of Defence (MOD) doing, and what more could it do, to rebuild trust in Service accommodation?

4.      Are there examples of good practice in provision of Service accommodation, which could be replicated across Defence? What are the lessons and what is the potential impact of the renegotiation of the Annington contract?

5.      Is enough money being invested to modernise and future proof military accommodation and how long will it take for all military accommodation to meet an acceptable standard of energy efficiency? Is the MOD being as forward thinking and innovative as it could be in its approach to new housing stock?

6.      What are the benefits and drawbacks of the Future Accommodation Model (FAM)? How successful was the FAM pilot and what should the MOD take forward to include in the New Accommodation Offer?

7.      Is enough being done to help personnel leaving service transition to civilian housing?

8.      Could the Service accommodation offer be more supportive to those experiencing relationship breakdown or domestic abuse?

 

Executive Summary

 

2.                  Accommodation Offer. The MOD provides living accommodation for Service Personnel and their families to support the delivery of operational capability. Domestic accommodation is a core element of our offer to Service Personnel and reflects the level of mobility we expect from them. Accommodation is crucial to the lived experience of personnel, providing one of the foundations of the moral component of fighting power.

 

3.                  The Defence Infrastructure Organisation (DIO), part of the MOD, provides SFA to entitled families at, or close to, their duty station. The Defence Accommodation Strategy (DAS), launched on 20 October 2022, commits the MOD to delivering an enhanced accommodation offer to an extended entitlement of personnel, recognising that Service Personnel deserve high quality, sustainable, subsidised accommodation, which can support modern lifestyles without compromise to operational effectiveness. The DIO aims to improve the quality and sustainability of housing and is supporting work through the New Accommodation Offer to improve choice over where, and with whom, Service Personnel can live. It is also looking to improve value for money and to find an affordable solution to cost measures. However, its ambitions are constrained by the lack of investment in the Defence estate over decades and current funding levels, over which it exercises no control. In this context, it is clear there is no quick solution, but DIO is committed to action and strides are being taken, for example, the additional £400 million funding announced as part of the Defence Command Paper Refresh over two years, will be dedicated to programmes to address damp and mould and to carry out refurbishment works to currently unoccupied (void) homes that are required under the New Accommodation Offer.

 

4.                  Provision. The MOD currently provides a total of circa 47,800 SFA properties across 500 locations in the UK (circa 55,000 worldwide) of which almost 37,100 are leased from Annington Property Limited (APL), with the remainder either MOD-owned, or leased, from other, smaller providers or Private Finance Initiatives (PFIs). The DIO maintains SFA in the UK through its industry partners under the five FDIS Accommodation contracts (paras 17-20). SFA allocation on the Overseas Permanent Joint Operating Bases (PJOBS – e.g. Cyprus and the Falkland Islands) is managed by UK Strategic Command, the Army manage SFA allocations in Germany and DIO maintains SFA through the Overseas Prime Contract (OPC) contract (Annex A).

 

5.                  Build Quality. A high proportion of the UK SFA was built in the 1950s and 1960s. Based on our current information, Reinforced Autoclaved Aerated Concrete (RAAC) has not traditionally been used by the MOD in the construction of domestic structure, and it is therefore highly unlikely that any SFA is affected. The prevailing standards of design and construction were poor and the properties were built to a budget specification. Council properties bought by their owners under the Right to Buy scheme in the 1980s share many of the inherent characteristics and owners have extensively refurbished.

 

6.                  Quality Standards. The MOD has routinely used comparisons with the social housing benchmark (Decent Homes standard (DH)). Since 2016, the proportion of SFA that meets or exceeds the DH standard has risen from 94% to 97%. The benchmark was adopted with the intent of ensuring at least a minimum standard for Service Personnel. Homes below this standard are not allocated to families, and, if they fall below the standard during occupation, works will be undertaken to restore them to at least the minimum. In 2015, the MOD introduced additions to the DH standard to create its own DH Plus (DH+) rating, which focuses on a higher level of thermal efficiency and slightly enhanced levels of modernity. The proportion of SFA meeting the DH+ standard has risen from 83% to 88% since 2016.

 

7.                  Comparison with Civilian Housing. The MOD publishes annual Service Family Accommodation statistics. The 2023 report found that 97% of UK SFA properties, for which information is available, are assessed as DH or DH+, with only 3% failing to meet the DH standard. In comparison, the Department for Levelling Up, Housing and Communities (DLUHC)’s English Housing Survey 2021/22 headline report found that 14% or 3.4 million occupied dwellings failed to meet the DH standard. The private rented sector had the highest proportion of non-decent homes at 23% while 10% of the social rented sector were non-decent. Among owner occupied homes, 13% failed to meet the DH standard. The MOD therefore currently assess that UK SFA is much more likely to meet the DH standard than rented homes of the general population in England. DLUHC is currently reviewing the DH standard, which was last updated in 2006. In the DAS, the MOD committed to review its target standard and an Enhanced Target Standard (ETS) is being developed (para 86). Approximately two thirds of UK SFA will need extensive refurbishment or rebuilding to meet the high-quality standards we promise.

 

8.              Armed Forces Accommodation Satisfaction. This assessment accords with the results of the Armed Forces Continuous Attitude Survey (AFCAS), which measures satisfaction with Service accommodation, as well as factors influencing the intentions of Service Personnel whether to leave or stay. In AFCAS 2023, satisfaction with the overall standard of SFA decreased to 46% from 52% in 2022, despite the high percentages that meet the DH and DH+ standards. Satisfaction with responses to, and quality of, maintenance or repairs work has fallen 13 and eight percentage points respectively since 2022, to lows of 19%. Satisfaction with value for money (60%) has remained consistent for most of the past seven years. More broadly, SFA cases continue to be raised by Members of Parliament from all parties in the House, and there is a wide recognition across Parliament, shared by the MOD, that progress in making improvements needs to be accelerated.

 

9.                  Retention Impact. In AFCAS 2023, almost four in 10 (38%) cited accommodation provision as a factor influencing intention to stay, whereas three in 10 (29%) cited it is a factor influencing intention to leave – a significant increase of three percentage points since last year. In 2022/23, the standard of all living accommodation (both SFA and SLA) was cited on 379 occasions by those leaving the Regular Armed Forces on Voluntary Outflow (VO), accounting for 4.5% of all the reasons cited. This was a reduction from 7.8% in 2021/22 and lower than the five-year average of 5%.  This made the standard of living accommodation 16th out of the 21 reasons selected.

 

10.              Service Families Accommodation Satisfaction. In the latest results of the Families Continuous Attitude Survey (FAMCAS), satisfaction levels with the overall standard (44%) and value for money (59%) of SFA and Substitute Single Service Accommodation (SSFA) are at their lowest levels. Satisfaction with response to requests for maintenance or repairs has fallen markedly this year to lows of 16%, and satisfaction with the quality of maintenance/repairs has fallen to lows of 21% in early 2023. Two in five (40%) families do not own a home. Of these families, the top reasons for not owning a home and living in SFA are: 59% cannot afford to buy a suitable home at the moment, and 39% report living in Service accommodation is better suited to the families’ needs.

 

11.              Historic Lack of Investment. The MOD has not – for several decades and across successive governments invested in the lifecycle replacement or modernisation needed to achieve good quality homes. This lack of investment pre-dates the APL sale in 1996 (para 74). One of the stated objectives of that sale was to realise funding to invest in improving below-standard SFA over the following seven years. The sale was intended to release funds for the upgrade programme at a rate which could not otherwise be achieved and was believed to be the only way in which the necessary upgrade of the estate could be achieved in the short term. However, only £100 million (6.25%) of the £1.66 billion sales receipt was invested in this way, with the remainder returned to the Treasury. This is worth circa £200 million in today’s values, which is less than DIO plans to spend this Financial Year (FY) alone on SFA improvements. Moreover, no upgrade funds were allocated for the remainder of the 200-year deal. More recently, from 2010 to 1 April 2022, when the FDIS contracts were introduced, the MOD opted for a ‘fix on fail’ approach whereby assets were allowed to degrade to the point of failure before any intervention was made.[2] Over the last three years, the level of investment in SFA has increased significantly but the underlying condition of the SFA estate means that the pressure for further investment will remain.

 

12.              Recent Investment. Investment to improve the quality of UK SFA has increased significantly in recent years, with £337 million invested over the FYs 2020/21 and 2021/22 combined (including £122 million of Government Fiscal Stimulus funding) and further additional funding taking the total to £163 million in FY 2022/23, more than doubling the rate of investment since the middle of the last decade. £219 million of the DIO’s total budget of £380 million this FY for standard ongoing maintenance, repairs and improvement, is dedicated to significant SFA improvement (Figure 1).

 

Figure 1: Expenditure on SFA Improvement Works since FY2014/15 (£ millions) Actual and Forecast

 

13.              As part of the Defence Command Paper Refresh in July, the DIO has received an additional investment of £400 million this FY and next. This FY, £220 million of the £400 million has been allocated to damp and mould remediation works (standardised damp and mould mitigation packages for 4,000 homes as well additional substantial works) and extensive refurbishment work to 1,000 long term empty SFA. This funding is in addition to standard ongoing maintenance and repairs.

 

14.              In the last 12 months, 423 modern homes have been purchased for service families across the UK in a £173 million deal, as part of the DIO’s Capital Purchase Programme. The Capital Purchase Programme works in partnership with major developers to identify where there is a need for SFA and determine the best way of delivering high-quality, energy efficient homes. The DIO has agreed to purchase a further 176 new homes over the next three years in a £78 million deal.

 

15.              Required investment. It is widely acknowledged that current funding of £1.8 billion over 10 years is insufficient to address the underlying issues of age, poor original build quality and previous under-investment.


Introduction

 

16.              The MOD welcomes the HCDC Sub-Committee inquiry into Service accommodation. This document sets out the evidence and background against each of the Committee’s questions in relation to SFA. A document relating to SLA has been provided separately.

 

Service Family Accommodation Provision

 

17.              The DIO is responsible for the provision of SFA and managing its maintenance through contractors. The FDIS Accommodation contracts for SFA went live on 1 April 2022. There are five contracts that make up the suite of FDIS Accommodation contracts; one National Accommodation Management Services (NAMS) contract awarded to Pinnacle Group which runs the National Service Centre (NSC), and four Regional Accommodation Maintenance Services (RAMS) contracts. Two RAMS contracts were awarded to Amey Defence Services for the Northern and Central regions, which cover circa 39% of SFA, and two to VIVO Defence Services for the South-West and South-East regions, which cover circa 61% of SFA.

 

National Accommodation Management Services (NAMS) Contract

 

18.       The NAMS contract with Pinnacle Group provides:

 

  1. A single, NSC that families use to access housing services. This includes:
  1. The repairs helpdesk that families use to report response maintenance requests.
  2. Home services, which handles applications for SFA and other housing-related requests (e.g. for permission to keep pets or to run a business from home).
  3. The management of complaints.

 

b.  A network of local Housing Officers to supervise Move-Ins and Move-Outs and the management of individual patches.

 

c. The Defence Accommodation Stores service (furniture and white goods) to both SFA (where the family requests it) and SLA. This is sub-contracted to Pickfords.

 


Regional Accommodation Maintenance Services (RAMS) Contracts

 

  1.            The RAMS contractors maintain homes and the community spaces around them. This includes the preparation of homes for Service families to Move In; planning and delivering pre-planned maintenance, including statutory inspections such as Landlord’s Gas Safety Inspections; conducting response maintenance; providing grounds maintenance; and providing and maintaining data on the condition of assets, together with advice on future maintenance/investment. They are also used to deliver SFA improvement works, which are funded separately from the response maintenance service. The majority of their maintenance and improvement work is sub-contracted.

 

  1.            Response maintenance responsibilities are as follows:

 

  1. Pinnacle provides the repairs helpdesk that is responsible for triaging calls from families into Emergency, Urgent or Routine categories; and for selecting the type of operative required (heating engineer, plumber, joiner etc.). It is then responsible for passing these requirements to Amey or VIVO as appropriate, electronically in all cases and also by telephone for Emergency calls. Pinnacle will book timed appointments for Urgent and Routine calls (Emergencies require a response within two hours) but can only schedule appointments based on the slots made available by RAMS.

 

  1. Amey and VIVO are responsible for scheduling operatives to attend to complete the tasks, with a target of fixing a minimum of 85% (ideally 95%) on the first visit. They depend on Pinnacle identifying the correct type of operative but are responsible for communications to the families if the operative will be delayed, and for arranging follow-on works if required.

 

  1. Pinnacle is responsible for booking temporary accommodation if a family’s home becomes uninhabitable due to a fault, or where there is a vulnerable person in the household, and it is unreasonable or unsafe for a family to remain in their home.

 

  1. Pinnacle is also responsible for managing and responding to all complaints relating to FDIS services and for the processing of compensation requests for missed appointments, failed Move Ins, and out-of-pocket expenses. However, it depends on RAMS suppliers for input in most cases.

 

 

21.              Performance Issues. Since the FDIS Accommodation contracts came into service, there have been several performance issues, which have resulted in a lower-than-expected level of service delivery (see Question 1 response). This has had an associated impact on the lived experience of some Service Personnel and their families, which, in turn, has attracted media and Parliamentary interest with consequent negative effects on the reputation of both the MOD and its contractors. The MOD continues to work with its contractors to make sustained improvements. Performance has been steadily improving in many areas since then, but we are very clear there is still much to achieve before Service families receive the level of service they deserve.

 

22.              We would like to reassure the Committee that providing good-quality homes that are safe and well maintained is a top priority for the MOD. The FDIS Accommodation contracts set significantly higher standards in many areas when compared with the previous National Housing Prime (NHP) contract and have clear mechanisms in place to incentivise high standards and address poor performance. The MOD’s contractual rights to withhold payments from contractors are being exercised to their maximum extent.


Question 1: (i) What measures have been put in place to resolve the housing maintenance issues, hold service providers to account and (ii) ease the cost of living for Service families?

 

23.              FDIS Contracts. The FDIS Accommodation contracts are designed to be very different from the NHP contract they replaced. They were developed with the needs of Service Personnel and their families firmly in mind (the “Family First” approach), and DIO collaborated closely with the Service Families Federations to ensure that their needs were fully considered. The Families Federations played a particularly important part in helping shape the new contracts before they were tendered, testing our processes as we approached the contract start date, and communicating key messages to families. They continue to do so in providing feedback on how the services are being delivered and identifying areas for continuous improvement. This is the first time in MOD housing contracts where there are clear customer satisfaction targets for contractors to meet. These are backed by incentives to go beyond the minimum standards and financial consequences for falling short. The Families Federations separately provided their views in an oral evidence session.

 

24.              The NAMS contract has 34 performance measures, and the RAMS contracts each have 37 performance measures. Each measure has a defined Acceptable Level of Performance (ALP), which is the minimum performance level the supplier is required to achieve during each three-month service period being measured; and a higher Target Level of Performance (TLP) which supported by financial incentives – is designed to encourage suppliers to go beyond the minimum. The separation of responsibilities between NAMS and RAMS contractors has provided significantly greater transparency of performance, with NAMS having a key role in assuring some aspects of RAMS performance and providing insight into other performance issues through their role managing complaints and interacting with families.

 

25.              From shortly before the start of the FDIS Accommodation contracts in April 2022, daily operational meetings were held between the DIO and contractors to facilitate the transition from the previous NHP contract within an agreed six month ‘bedding in’ of the contracts.

 

26.              Early Warning Notice. However, failure to deliver the required level of performance in the early weeks of the contracts led to an Early Warning Notice being issued to RAMS contractors on 16 May 2022. The tempo of daily operational meetings was maintained to address the emerging issues and manage the consequences for families.

 

27.              Missed Appointments. In June 2022, issues emerged with the interface between Pinnacle and VIVO’s IT systems, which resulted in high volumes of missed appointments for repairs to SFA. This followed a lesser but significant issue with missed appointments resulting from scheduling errors within Amey’s systems. The Pinnacle/VIVO issue had two dimensions. Firstly, Pinnacle was correctly booking the appointment, but VIVO could not see the appointment, and subsequently did not attend, appointments were missed, and families were affected as a result. Secondly, a sub-set of appointments were not transferred successfully from Pinnacle to VIVO. Temporary, then permanent IT fixes resolved the issue after a matter of weeks. DIO’s Head of Accommodation sent an apology to families in the South-East and South-West regions (where the issues were most prevalent) and key updates for Service Personnel were placed on the gov.uk website. Compensation of a £30 Love2Shop voucher for each missed appointment was proactively issued to families. This was funded by the contractors.

 

28.              Key Performance Concerns. Performance continued to be of particular concern, especially in respect of the absence of reliable performance data in some important areas, as well as key issues, such as: the time taken to clear the backlog of works transferred from the NHP Contract to FDIS, the preparation of homes for families to move into, emergency and urgent response times, missed appointments, first-time fix rates, and complaints and compensation handling. On complaints handling, at the end of September 2022, the DIO Accommodation Director emailed over 5,000 families who had raised a complaint.

 

29.              Rectification Notice. A formal rectification notice was issued in September 2022 to all RAMS and NAMS contractors for poor performance against performance measures, just ahead of the end of the six months ‘bedding in’ timeframe. The rectification notice directed contractors to submit Rectification Plans endorsed by their respective Management Boards. DIO worked closely with contractors to ensure their plans were feasible and effective, and assigned additional, experienced resource to continuously monitor progress against the agreed contractors Rectification Plans. Formal governance arrangements were set in place and overseen by a senior manager who also consolidated key dependencies from Rectification Plans to ensure that critical paths were understood by all parties and early intervention action could be taken where there was any deviation from planned trajectories. Close monitoring of the detailed Rectification Plans highlighted further performance issues; the DIO Chief Executive and the DIO Board Chair wrote to their contractor counterparts to direct them to manage interventions.

 

30.              Scrutiny. Since the Rectification Plans were implemented at the end of September 2022, the DIO Chief Executive and his Officials have held regular scrutiny meetings with contractor Chief Executives to continue to hold them to account, to drive performance improvements and deliver the best possible service to Service Personnel and their families. Ministers have also met with contractor Chief Executives to direct action and have received and acted on frequent updates on performance progress.

 

31.              Total Loss of Heating and Hot Water. In December 2022, dissatisfaction with failing heating and hot water systems in SFA and, in some cases, failure to meet contracted maintenance response times, coincided with an unusually severe cold weather snap and highlighted the issue publicly. Interventions were made by Ministers and DIO with contractor Chief Executives to direct prioritised resolutions and rapid internal process improvements to drive outcomes for Service Personnel. For homes where heating and hot water issues could not be resolved quickly, and access to temporary heaters or alternative accommodation was not initially satisfactory, DIO took immediate action with contractors to address both shortcomings. Improvements were made in the handling of response maintenance requests, such as remote fault diagnosis and fix by an engineer, where possible, and by increasing the number of heating engineers. An increased compensation rate (£20 for a 24-hour period) was also made available to Service families to cover the cost of running temporary heaters. Daily reports were sent to Ministers for the remainder of the heating season (until 1 May) to monitor the issue. Outside of the heating season, Ministers receive frequent and by exception reports. Alex Chalk KC MP, the then Minister for Defence Procurement, commissioned an independent review into the FDIS Accommodation contracts, the outcome of which is outlined in the response to Question 2.

 

32.              Damp and Mould We take reports of damp and mould extremely seriously and, after a spike in reporting in January 2023, established a dedicated Damp and Mould Taskforce to grip the issue, rolling out good practice across the SFA estate. Paragraph 63 onwards describes the measures that have been adopted. The MOD wrote to the Sub-Committee on this issue following questions during the oral evidence session on 21 June 2023 in support of the Sub-Committee’s Defence Equipment and Support (DE&S) Inquiry.

 

33.              Financial Penalties and Impacts on Contractors. DIO has applied the financial measures available in the contracts to the maximum possible effect. The contracts required performance credits to be paid in full for the initial six-month contract ‘bedding in’ timeline (April – October) to allow the contractors time to achieve the new standards required. Following the end of the first ‘live’ service period (October – December) after this bedding in period, DIO applied the first financial penalties to contractors by withholding Quarter Three performance credits where contractors failed to achieve the minimum ALP. It has continued to withhold performance credit to the maximum extent from this point onwards. Contractors also bear the costs of their poor performance in terms of funding compensation payments which can be given to Service Personnel for the following reasons: missed appointments, failed Move In to SFA, subsistence costs for temporary accommodation, incorrect tradesperson, total loss of heating and total loss of cooking facilities. Contractors have paid a total of £2.15 million in compensation direct to Service Personnel in the period April 2022 – October 2023. The top three compensation reasons in value terms were for missed appointments, subsistence costs for temporary accommodation and total loss of cooking facilities. In addition, all three contractors have employed significant additional resource to address performance failings, at their own expense.

 

Recovery Plans

 

34.              During winter months, the unacceptable response maintenance times to total loss of heating and hot water, which were well outside of contractual targets, combined with the non-fulfilment of Rectification Plans, led to direction to our contractors to provide strengthened recovery plans at the end of January 2023. Since the start of January 2023, no more than 0.34% of circa 47,800 SFA have been without heating and/or hot water for more than 48 hours at any given time. If a family experiences a loss of heating or hot water, they should contact the Pinnacle National Service Centre.  Families have been made aware of how to report a fault in their home. Loss of heating and hot water should be responded to as soon as possible and within 48 hours. Where heating failure cannot be resolved immediately heaters should be provided and if heating and hot water are both lost, alternative accommodation should be provided. 

 

35.              Statutory and Mandatory Checks. In June 2023, the MOD published a Written Ministerial Statement: Defence Infrastructure Update specifically outlining an identified issue with a backlog of expired gas and electrical safety inspections in SFA and the accelerated programme to ensure compliance. The MOD also wrote to the Sub-Committee in July and August on this issue following questions during the oral evidence session on 21 June 2023 in support of your DE&S Inquiry. The DIO is putting in place a lessons learned process for the medium and long-term. Specifically, what can it learn from the failures here that it can apply to future contracts, to avoid similar mistakes. The key lessons learned can be shared with the Sub Committee on request.

 

Performance Improvements

 

36.              The MOD has set out an expectation that suppliers must demonstrate they can sustain performance at or above the ALP before the Rectification Plans will be considered to have succeeded. The MOD has made it very clear that there is still more to achieve before Service families are receiving the level of service that they deserve. Ministers have met with, and raised concerns with, performance of all contractors.

 

37.              Amey and VIVO. Since Rectification Plans were implemented in September 2022, performance has improved for both Amey and VIVO in the key areas of response maintenance timeframes and reducing the backlog of maintenance tasks. However, there is still more work to do before both are consistently at the ALP across the board, particularly in respect of preparation of homes for Move-In, overdue maintenance tasks and the number of live complaints, with some significant regional differences in performance. As figures 2-4 below demonstrate, there has been steady improvement in all areas but both Amey and VIVO continue to be directed to deliver sustained month on month improvements. 

 

Figure 2: Move In Inspection Pass Rate

Figure 3: Overdue Maintenance Tasks

 

Figure 4: Number of Live Complaints

 

38.              Pinnacle. Pinnacle is now consistently delivering at, or above, the minimum ALP in all areas where it has sole responsibility for delivery and is no longer in rectification. In most cases, it is achieving the higher TLP. In those areas where it is not solely responsible for delivery (e.g., the time taken to close complaints), the DIO is content that the issues resulting in performance failures are outside Pinnacle’s control (e.g. the length of time taken to complete the works necessary to resolve a complaint) and that Pinnacle is fully discharging its individual responsibilities. The DIO is negotiating the introduction of new Performance Measures that will better describe the respective contractors’ roles in these areas and continues to work with Pinnacle on continuous improvement of its services.

 

Mitigation of Cost-of-Living Impacts

 

39.              Subsidised Accommodation Costs. SFA charges have increased by just 1% in the last two years because of decisions to shield personnel from the high inflationary increases seen in all other housing sectors. It should be noted that the 1% cap was significantly lower than the 7% rental cap agreed for the social housing sector[3]. In addition, the generous subsidy on service-provided accommodation means that the percentage of salary spent on rental costs by personnel in service-provided accommodation is already significantly lower than the civilian average. The monetary value of the SFA subsidy was between 43% and 73%, depending on type of accommodation occupied. This is before additional financial discounts for accommodation that does not meet the highest standards for condition, location, or scale, are considered.

 

40.              Cost of Living Support. The MOD replicated the intent of the HM Treasury Council Tax rebate scheme by passing on a £150 refund, funded by HMT to Service Personnel occupying SFA Types A-V. As SFA are not aligned to council tax bands, the decision was made to link the rebate to housing types occupied by Service Personnel up to and including junior officers to ensure that those most likely to need financial support received the rebate. Approximately 32,000 personnel have received a CILOCT (Charge in Lieu of Council Tax) Rebate at a cost of circa £4.6 million. 

 

41.              Energy Rebate Scheme. The majority of SFA occupants pay their energy bills directly to their energy supplier and received the £400 Energy Bill Support Scheme as announced by the UK government in May 2022. Families who receive energy through the MOD portfolio have not been financially disadvantaged because the proposed uplift SFA rates, which third party and fuel subsidy scheme rates are also linked to, were kept at least £400 lower than the energy price cap of £2,500.

 

42.              Oil Prices. The MOD recognises the high cost of oil and gives guidance to families who live in oil heated homes to ensure they are not disadvantaged. Minimum deliveries for oil are 500 litres which means that sometimes on Move Out families can leave several hundred litres of oil for the next family. Families can provide copies of their delivery invoice at Move Out and any credit for the remaining oil will be reimbursed. If they do not have a delivery invoice, their refund is based on the current UK Average Home Heating Oil Prices.

 

43.              Heating Efficiencies and Reduced Utility Costs. DIO is working to deliver alternative solutions that heat the home with greater efficiency to provide both energy and cost savings to families. This will initially focus on the 1,200 homes that have oil heating systems. This FY DIO is looking to replace oil boilers to 520 homes using a combination of Air Source Heat Pumps and Thermal Energy Storage solutions. These systems will reduce carbon emissions, as well as reducing utility costs for families, but in most cases works will also be needed to upgrade the thermal efficiency of the homes through a combination of replacement doors, windows and/or insulation. The current plan to install alternate heating solutions to all homes will consider government carbon emission reduction strategies, as well as reducing the reliance on oil-fired boilers by the end of 2023 so that families can benefit from greater heating efficiencies and reduced utility costs. DIO is also planning to fit external wall insulation to 989 homes this year to improve the energy efficiency of many of our least efficient homes – including those with oil heating systems DIO is being forward thinking and delivering brand new SFA, designed to be constructed using sustainable methods (including modern methods of construction) and built to a high specification. DIO’s aspirations are to roll out this approach to as much of the estate as possible, but the rate of delivery is constrained by available funding (See Question 5 response).

 

 


Question 2.              Do the new FDIS contracts for SFA represent value for money and are they operating effectively?

 

44.              The independent review commissioned by the Minister for Defence Procurement into the FDIS Accommodation contracts concluded in April 2023; the findings and recommendations were endorsed by the MOD’s Executive Committee and are summarised below.

 

45.              The FDIS Accommodation contracts were entered into properly and were in accordance with extant MOD and Crown Commercial Services (CCS) processes, were correctly supported with analysis and were subject to independent technical scrutiny. The suppliers’ bids were properly assessed through the declared evaluation process that gave due weighting to the requirement to value the quality of the resulting service above price (on a 60% to 40% balance).

 

46.              All parties under-estimated the complexity and duration of integrating and testing the Facilities Management Software Information Systems/Technology systems against a background of an incomplete set of changed business processes. These were key dependencies for the effective delivery of the maintenance service as well as providing the means to provide accurate estate management information for future investment decisions. There was also no clear accountable lead with responsibility for full IS integration and testing before the contract In Service Date (ISD), nor was a single system specified, relying on the integration of providers’ systems. As a result of this, and the erosion of time to ISD by the length of the Approvals process, the end-to-end software systems and processes were not fully tested prior to “go live” to ensure they were fully functional and were able to deliver the requirements expected from them. This caused a large volume of backlog calls to the helpdesk, further exacerbated by bad weather when the system was finally fully operational.

 

47.              The current NAMS/RAMS contracts are correctly specified to deliver the quality and timeliness of maintenance services required by Service families and the DIO Accommodation Team. The Performance Measures and supplier incentivisation associated with them have been thought through, are linked to the programme benefits and once informed by good quality data, will help provide an improved service to Service families. The DIO Accommodation Rectification Team is providing clear direction to suppliers to ensure that they now deliver the required services in the right way and withholding profits until service achieves the necessary standard. Once a steady state is achieved, operational activity will need to be handed over to the Business-as-Usual Accommodation Team in a planned and controlled manner to deliver the service in the longer term.

 

48.              Achievement of steady state delivery in FDIS Accommodation will not alone address the issues in SFA. Whilst the NAMS/RAMS contracts will provide maintenance services, the main blocker to the delivery of appropriate accommodation services to families now remains the poor condition of the SFA estate and the cost to rehabilitate and upgrade it to modern standards following a prolonged period of disinvestment in the material housing stock and the services within them. The transition to a preventative maintenance approach will not make good the condition of Service families’ housing. This observation is also reflected in the Living in our shoes: understanding the needs of UK Armed Forces families report.

 

49.              Operating Effectively. Our current assessment of how contractors are performing and how the DIO continues to address performance gaps is given in the response to Question 1. Although the focus has rightfully been on addressing shortcomings in performance and holding contractors to account, the scale and volume of work which has been successfully delivered should also be noted. For example, each month, 22,000 response maintenance tasks are completed, which can range from repairing guttering to changing strip lighting; and over 12,500 Move Ins happen each year, accompanied by work to prepare the home for the new family.

 

50.              Winter Preparedness. The DIO’s focus is on ensuring the estate is well prepared for winter, utilising the significant investment of £400 million this and next FY to address damp and mould, improve the thermal efficiency of homes and refurbish unoccupied SFA homes and make them available for Service Personnel. In addition, winter preparedness plans have been formulated with FDIS contractors at a local, regional and national level to ensure effective responses to business-as-usual maintenance issues, but also to extreme winter weather events. These plans were announced to Parliament in a Written Ministerial Statement on 13 November. As part of winter resilience, DIO undertook a Rehearsal of Concept drill to stress test our contractorswinter plans to improve capability and respond to emergent weather events. Storm Babet in October 2023 impacted the east coast of Scotland but also resulted in heavy rainfall across the Central and Southwest West areas of the country. In preparation, the storm was being tracked in advance by DIO and its contractors using Met Office weather alerts and teams were primed to address emergent issues as the storm escalated. Prior to the storm, families with planned jobs that would be affected by the severe weather (e.g. working at height) were contacted to rearrange appointments. Surge capacity was also stood up in advance and on Friday 20 October there was a 33% uplift in call volumes. The average speed to answer calls was 58 seconds. The main storm impact to SFA was flooding due to overwhelmed drain infrastructure and roof leaks as a result of heavy rain fall, however we had contingency accommodation in place and 14 hotels were booked to provide alternate accommodation for affected Service families. Supply chain operatives were stood up over the weekend and remained in place to respond to any residual impacts of the storm. Within a week, all flood-affected homes were assessed, and families were given clear plans and dates for reoccupation where damage was limited, or for moves into alternative permanent homes where damage was more extensive. Storm Ciaran followed swiftly behind. Its geographical impact was more limited and although there was a 28% increase in calls on Thursday 2 November, call wait times remained similarly low and only one home, and one garden, were flooded.

 


Question 3.              What is the MOD doing and what more could they do to rebuild trust in Service accommodation?

 

51.              Recognition. The MOD and DIO have taken practical steps to rebuild trust in maintenance of Service accommodation, starting with acknowledging the problem with the performance of the FDIS Accommodation contractors, apologising to Service Personnel and their families. SFA charges have been frozen this year directly in response to the FDIS performance issues and that has been funded using performance credits withheld from the contractors. In addition, both Ministers and Officials at all levels continue to press our contractors for better performance and have exercised financial penalties to their fullest extent to incentivise improvement.

 

52.              Investment. The additional £400 million funding (para 13) over this TY and next, in recognition of historical underinvestment in the SFA estate, and the development of the Enhanced Target Standard (ETS) to better articulate the standard of SFA, both commit to improving the quality of SFA provision to Service Personnel. Cost of living support (para 39) is provided to mitigate impacts to the income of Service Personnel and their families. As part of the MOD’s 10 Year Strategy, we are focused on improving the Thermal Efficiency of SFA aligned to our proposed ETS that would aim to bring all SFA up to a minimum EPC of C. MOD has already invested £246 million over the last 5 years improving the energy efficiency of around 4,406 hard-to-heat homes, with a further £42 million of work underway this FY and more to follow next. This is improving the comfort of previously hard-to-heat homes and substantially reducing energy bills for affected families.

 

53.              Communication. We aim to rebuild trust with Service families and key stakeholders such as the Families Federations, Front Line Commands and Housing Colonels, through our transparent communications approach. We are open in acknowledging the performance of our FDIS Accommodation contractors, clear on holding our contractors to account, and thorough when explaining the benefits of our future programmes of work to improve the accommodation service. We provide performance updates and associated news through our Families First newsletter, which is published on the Gov.uk website, and engage with Service Personnel through a dedicated SFA page on our internal Defence Connect online platform every three-to four weeks. We have also communicated in the Defence press, such as providing updates to Soldier Magazine. We solicit feedback from our stakeholders on any ways to adjust and improve our communications approach.

 

54.              Engagement. To increase engagement with families at a local level, gain an understanding of local issues and to help resolve issues relating to their homes and complaints more efficiently, Pinnacle started to run community engagement events (known as Housing Surgeries or High Impact Days) with VIVO or Amey and local DIO representatives late last year. These surgeries have proved to be very successful and are well attended by families, as well as SFA stakeholders such as Unit Welfare teams. DIO meets with the Service Families Federations monthly and runs the quarterly Accommodation Delivery Forum which includes attendees from DIO, contractors, and representatives from the Front-Line Commands (FLCs).

 

55.              Customer Satisfaction. In addition to MOD-wide continuous attitude surveys that feature accommodation (the Armed Forces Continuous Attitude Survey and the Families Continuous Attitude Survey), contractors have also implemented their own Fast Feedback mechanism to track customer experience and satisfaction and inform future improvement work.

 

56.              Quality Assurance. DIO is addressing quality issues with both VIVO and Amey by directing them to improve capacity within their management cohort to directly manage supply chain activity and drive greater ownership of issues versus an arm’s length approach to managing quality through multiple supply chain layers.

 

57.              Case Handling. A case management system has been established jointly between DIO and the FDIS Accommodation contractors. The team’s role is to manage the handling of the most serious cases of delayed response maintenance tasks by improving communication with families and prioritising the scheduling of works, according to individual family needs.

 

58.              Future Intent. There are several future initiatives which will directly contribute to the customer experience for Service Personnel and their families. There is an intention to use technology to innovate by developing an online portal “Home Hub”, which will enable families to track jobs and book their own appointments (self-service). There will also be a review of the complaints policy and process, and of the quality of contractor responses to complaints to improve the customer experience.

 

59.              Project Summer and Winter. These are DIO internal initiatives to provide significantly more operational and performance focus. Accommodation services will be reviewed to ensure they are better aligned to deliver the requirements of FDIS, focusing on the core objectives of Regional Teams and Central functions, respectively. The aim is to continuously improve, ensure regional consistency and help harness good practice. Dedicated Officials will focus exclusively on working with Amey and VIVO to drive performance improvement.

 


Question 4.              (i) Are there examples of good practice in provision of Service accommodation, which could be replicated across Defence? (ii) What are the lessons and what is the potential impact of the re-negotiation of the Annington Homes contract? 

 

(i)                  Good Practice

 

60.              In addition to the examples given under the answer to Question 3, Officials in DIO actively seek out every opportunity to exploit good practice from external organisations, industry partners and partner nations as well as internally to deliver better delivery outcomes.

 

External

 

61.              The FDIS Programme Industry Engagement. During the procurement phase of the FDIS Accommodation contracts, emerging themes and best practice in the facilities management sector were captured to assist in developing an FDIS delivery model. Engagement with Facilities Management suppliers via the Defence Committee of the Business Services Association allowed DIO to test the viability of its proposed delivery model and informed the FDIS commercial strategy and contract mobilisation. As part of this process, DIO engaged with Housing Associations, Local Authorities, National Trade Forums and specialist housing management and maintenance suppliers to capture best practice and ensure market appetite for the future delivery model. The Project also employed the services of an eminent specialist management consultancy with significant experience in the delivery of housing management and maintenance solutions across the sector.

 

62.              US Model. Lessons can be learnt from the accommodation model used by the US Visiting Forces (USVF), which has 1,492 SFA across five main USVF operating bases in the UK. These are modern and receive high levels of investment. 50% of its housing stock was built in the last 10 years (circa 2012), and the remainder has received significant investment in the last 20 years. By means of comparison, 87% of UK housing stock dates from the 1950s/60s or earlier. The average USVF core maintenance spend on each home is £4,600 per annum, compared with the UK’s £1,600. The quality of its homes is set out in the Military Family Housing Design guide, which is broadly equivalent to a UK new build estate and not the UK’s DH standard. The US resourcing model includes dedicated Housing Officers to manage issues, whereas the UK outsourced this function in 2014. It also provides significantly greater capacity for assurance of contractor activities and work through Projects Summer and Winter is seeking to improve UK capacity in that respect.

Internal

 

Damp & Mould

 

63.              Over the past four years, £148 million has been spent on projects designed to improve thermal efficiency and eliminate damp and mould (thermal efficiency includes insulation, doors, windows and roofs). Since the start of the FDIS Accommodation contracts, circa 6,500 cases of damp and mould have been raised with the National Service Centre (NSC). Fully solving the problem of damp and mould is likely to take two-to-three years and will require significant investment in addition to current funding.

 

64.              First Responder. Since the Damp and Mould Taskforce was established in February 2023, its focus has been on understanding the severity of reported cases and implementing the First Responder process. All reports of damp and mould are triaged by the NSC which establishes the severity level and then follow the First Responder Process. A First Responder visit is arranged promptly to validate a triage score, clean and treat the affected areas, provide advice to the family, and if appropriate, in the most severe cases, or if a family member has a known vulnerability, trigger a move out of the property to alternative accommodation (59 families have moved as a direct result of damp and mould since the start of the FDIS Accommodation contracts). Most cases have either received a visit from a First Responder, or other early intervention such as a visit from a local Project Manager. Professional surveys continue to be arranged for the more severe cases. To date, circa 4,500 surveys have been completed. Whilst the First Responder process has been effective in removing damp and mould from affected areas, it is vital that works are undertaken to address the underlying causes to break the annual cycle of reoccurrence.

 

65.              Standardised Work Packages. DIO has been working with VIVO and Amey to develop a circa £30M programme of straightforward, non-structural interventions, which will address many of the common underlying causes of damp and mould. These packages have been developed from the most common recommendations from completed Damp and Mould surveys and will include improved ventilation through the fitting of upgraded extractor fans and trickle vents, upgrading loft insulation, replacing blown double glazing units, repairs to guttering and damp-proof courses and repointing. Circa 4,000 homes which have been prioritised according to damp and mould severity, will receive one of four standardised packages of work to address damp and mould. The majority of these are due to be completed by the end of this FY, the remainder by the end of quarter one next FY. The worst cases will be addressed first. The pilot programme to deliver the simple, standardised works packages took place in Aldershot in June 2023 and remediation works have been completed at 114 properties. In August 2023, DIO started to roll out these packages nationally and since then over 1,359 SFA have had works completed.

 

66.              Substantial Works. In addition, some homes will also receive more substantial works including full replacement of doors and windows, improved groundwater drainage, external wall insulation and substantial roof repairs or replacement. Detailed plans are being finalised, but we anticipate completing circa £115 million of these more substantial works this FY, with more to follow over the next two FYs.

 

67.              Streamlined Approvals. The current process of DIO approving works on a property-by-property basis is being changed to allow Amey and VIVO to submit proposals for multiple properties which will significantly speed up the approval process and will enable us to work at scale.

 

68.              Preparation. DIO accepts that complaints may be lodged this winter before scheduled remediation work to address underlying causes can be carried out. DIO will increase First Responder visits to alleviate the symptoms, reduce the immediate health impact of the presence of damp and mould and limit the potential for long-term exposure. DIO will continue to move families to alternative accommodation in the most serious of cases and systematically remove SFA in the worst condition from our available housing stock, only making them available again once remediation work is complete. To date, 253 homes have been taken offline.

 

Landlord Gas Safety Inspections

 

69.              Whole Force Approach. The accelerated and targeted programme to bring all gas safety inspections in SFA up-to-date quickly and efficiently has applied a Whole Force Approach. DIO, FDIS Accommodation contractors, and the military Chain of Command have worked together in moving away from the usual individual house appointment-based approach, to where gas engineers attend military housing estates on nominated days and move between homes to carry out the required inspections. The military Chain of Command has worked with DIO Regional teams and contractors to ensure appointments are not missed, striking a careful balance between enabling Service Personnel (or their families) to be at home to open their doors for engineers, against operational demands. The successful principles of this Whole Force collaboration are being applied to the prioritised work programme to also bring all electrical safety checks up to date, following a change in legislation which moved the frequency of required Electrical Installation Condition Reports from 10 to five years.

 

Collaboration

 

70.              In addition, collaboration between key accommodation stakeholders, such as DIO, Families Federations, Front Line Command Housing Colonels and the FDIS contractors through various engagements (the Accommodation Delivery Forum, the Suppliers’ Alliance, the DIO Winter Conference, surgeries with Service families (para 54), facilitates the generation of ideas and has directly led to the sharing and adoption of good practice between Amey and VIVO to benefit Service Personnel and their families. For example, a remote diagnostic tool called Techsee introduced by Amey is now used by VIVO to triage and address loss of heating and hot water response maintenance tasks. The good practice from VIVO’s Project Pass initiative, which focused on improving Move In processes in the South-East Region, is now not only being applied to their South-West Region but is also being taken on board by Amey.

 

Improved Processes

 

71.              Compensation Interventions. Several changes are being implemented to improve the compensation process for families. To speed up the processing and issuing of compensation claims and payments, Pinnacle has invested in a new workflow system to make the compensation process easier for families.

 

72.              Under the new workflow system, families receive key updates at each stage of the compensation process. This should reduce the need for chase calls, social media interactions and emails.

 

73.              The system also benefits the wider FDIS contractors through the provision of better, more granular insight into performance, such as more detail on reasons for compensation claims by geography. The revised system turns around compensation claims and payments far more quickly, with added benefits such as providing Pinnacle with a more accurate ‘real time’ picture of missed appointments, which allows Amey and VIVO to respond more quickly and set up the necessary interventions.

 


(ii) Annington

 

74.              The Annington Property Limited (APL) ‘contract’ is a loose term to describe the sale and leaseback arrangement and other ancillary agreements entered by the MOD and Annington in 1996, by which over 55,000 SFA homes in England and Wales were sold to APL by way of a 999 year lease (together with over 2,300 sold freehold as part of the broader £1.66 billion deal) with the MOD taking on leaseback of 200 years on the circa 55,000 homes. As part of the lease arrangements, the MOD pays APL a rent based on open market rent. For the first 25 years of the term of the MOD’s 200-year underlease, the rent was discounted from open market levels by an agreed factor of 58%.

 

75.              It is important to note that this arrangement has not been renegotiated. Whilst over the years the parties have agreed variations to the terms of the agreement, the underlying commercial obligations remain fundamentally the same.

 

76.              In the period 2019-2021, the parties were required, under the terms of the 200-year leases, to undertake reviews to reset the discount factor to the market rent for each site. This was a significant undertaking considering the number of sites involved, and so, in 2019, the parties entered into an arbitration agreement to govern the process.

 

77.              In December 2021, a settlement was agreed between the parties in respect of the site reviews arbitration, which re-set the discount from 58% to 49.6%. The rent review settlement agreement included certain provisions relating to future site reviews and to two specific sites leased by MOD. However, these provisions did not constitute a re-negotiation of the commercial arrangements between the parties, which remain fundamentally the same.

 

78.              The outcome of the rent review process was broadly positive for the MOD, in that it resulted in a lower increase in rent than had been forecast. However, the MOD continues to pay rent and carries exposure to the market risk of increased rents over the remaining lifetime of the leases, and bears full responsibility for management, maintenance, and void risk.

 

79.              The current litigation between APL and the MOD concerns the MOD’s rights to enfranchise Service family homes. As a matter of principle, the MOD is seeking to explore its enfranchisement rights, on a test case basis, as part of the MOD’s wider strategy to assess and improve value for money and quality accommodation for Service Personnel.

 

80.              We welcome the decision of the High Court, which has dismissed all of the challenges brought against the MOD. The High Court has confirmed that the MOD acted lawfully, that the MOD was entitled to issue the enfranchisement notices and that those enfranchisement notices were valid.

 

81.              APL applied for permission to appeal the decision of the High Court judgment, on all grounds. This application was refused by the High Court in its entirety. APL subsequently applied for permission to appeal on all grounds. On 11 October the Court of Appeal granted APL permission to appeal on a limited number of grounds on the basis of their wider public importance. The appeal hearing has now been listed for the week commencing 22 July 2024 for 2.5 days.

 


Question 5.              Is enough money being invested to modernise and future proof military accommodation and how long will it take for all military accommodation to meet an acceptable standard of energy efficiency? Is the MOD being as forward thinking and innovative as it could be in its approach to new housing stock? 

 

82.              Investment. The aim of DIO’s SFA delivery strategy is to provide coherence and direction to ensure capability requirements; to readdress decades of policy and investment decisions that have led to the degradation of the SFA estate; and substantially improve the standard of SFA, as well as provide Defence with increased flexibility of management of the SFA estate. Appropriate and sustained funding will be critical. SFA homes currently meet minimum energy efficiency standards (MEES) for rented accommodation, except where specific exemptions apply (e.g. historic/listed homes) and DIO is specifically seeking to move towards revised MEES expected to be introduced from 2028. Currently, homes should have a minimum EPC of E, however, in the future, there will be a minimum EPC of C which will require substantial investment to achieve.

 

SFA Delivery Strategy

 

83.              DIO is currently developing an SFA delivery strategy which is influenced by both current issues and opportunities. It is anticipated that this process will take 12 months, at which point, a briefing can be offered to the Sub-Committee.

 

84.              The SFA Delivery Strategy comprises three main strands of work:

 

(i)      A 10-year Investment Programme to bring the SFA estate up to an ETS (para 86) that meets planned legislation and provides recognisably high-quality accommodation;

 

(ii)    Project Sycamore, the testing by the MOD of the scope of its enfranchisement rights, and ability to use such rights to secure better value for money in the context of its arrangements with APL; and

 

(iii)  The Military Housing Site Review Programme, which is assessing the best VFM options to retain or replace SFA up to 2050.

 

83.              Together, these projects will form a comprehensive investment plan over the next 10 plus years, linked to a longer-term strategy encompassing Carbon Net Zero requirements, and the potential to secure better Value for Money (VFM) using the MOD’s enfranchisement rights in respect of the SFA estate; a point on which we are limited to comment on given ongoing legal action (para 79).

 

84.              The implementation of widened entitlements to family accommodation from Spring 2024 (see Question 6 response) will see significant increases in demand for SFA, reducing the opportunity to take homes offline for maintenance, while the declining condition of the estate increases the burden of reactive maintenance. The MOD has revalidated SFA as the most cost-effective solution to meeting family accommodation needs where available and, although the Haythornthwaite Review has recommended some increase in TLB freedoms to prioritise benefits, it has also publicly affirmed the need for substantial investment in SFA as demonstrated by the award of an additional £400 million of funding over the next two years in the Defence Command Paper Refresh. Future investment in the SFA estate will be tested for affordability in the next Spending Review.

 

85.              The terms of the Annington leasehold impact Defence’s control over the SFA estate, and the Dilapidations and Handback Agreement (DHA) which set outs the return of SFA units to Annington. This has reduced the value for money argument for MOD investment. SFA availability and delivery will also be impacted due to the identification of some 500 SFA for use as part of the Afghan Relocation and Assistance Programme. 

 

Enhanced Target Standard (ETS)

 

86.              Working in parallel with DLUHC in respect of the DH Standard, DIO Accommodation has produced a revised set of proposed MOD standards, baselined against a new ‘ETS that will relate to SFA. This is designed to improve the standard of SFA across the estate, and better delineate between the current, varied standards for condition. The intent of the ETS includes:

 

 

 

 

 

 

87.              This latter element will reduce the discrepancy between energy efficiency of new-build SFA and older homes that still meet the DH+ standard and therefore attract the same rental charges. Currently, for an SFA to meet the thermal standards of DH+ it must have a Standard Assessment Procedure or SAP score of 55, EPC D, which is above the current minimum standard for rented accommodation. The new-build SFA being delivered has a minimum SAP score of 81, EPC B, and where possible it is being upgraded to an EPC of A during construction. This represents a significant energy saving which is not currently reflected in the rental charges paid by Service families, consequently the charge for an SFA with an EPC of D can currently be the same as an SFA with an EPC of A.

 

Forward Thinking – Embracing the Challenge of Net Carbon Zero (NZC) SFA homes

 

88.              DIO is being forward thinking and delivering brand new SFA, designed to be constructed using sustainable methods (including modern methods of construction) and built to a high specification. DIO’s aspirations are to roll out this approach to as much of the estate as possible, but the rate of delivery is constrained by available funding. DIO is already delivering SFA which has been designed to be Net Zero Carbon (NZC) in occupation, noting that there will be a carbon footprint for the construction and ongoing maintenance of the SFA, and that it is not possible to legislate in terms of family lifestyles and associated energy consumption and carbon footprint. The target for energy use is 0.15 W/m2 °C (watts per square metre per degree C) and the first SFA will be delivered in January 2024. The true running costs and energy use will be evaluated once the SFA are completed and in use.

 

89.              DIO has taken the lead for the reduction of energy use across the SFA estate, working with developers and consultants to produce a range of standard SFA types that can be constructed in traditional or Modern Methods of Construction (MMC), including modular build. DIO has also worked with housing developers to create a range of homes within their portfolio that will meet the requirements of JSP 464 (Tri-Service Accommodation Regulations (TSAR)) and JSP 850 (Infrastructure and Estate Policy, Standards and Guidance).

 

90.              The houses have been designed as such that, in what would be considered normal use, they will be highly energy efficient, producing a low level of CO2. If energy is obtained from a green supplier this will reduce the CO2 levels further. DIO has recognised that employees consider the green credentials of their employer and the demographic from which the MOD is recruiting are very in tune with climate change and sustainability. The MOD is responsible for 50% of UK governments CO2 emissions (MOD 2021), a challenge that the Department is already addressing. If Service Personnel and their families can make an individual contribution to reducing the carbon footprint living in SFA that has been designed to be NZC in occupation, there is a clear attraction to the MOD employees. Examples of such developments are as follows.

 

91.              Innsworth. 176 two, three and four-bed SFA are currently under construction to be delivered between January 2024 and December 2026. The key aspects of the design are detailed below:

Figure 5: Taylor Wimpey Future Homes at Innsworth

 

92.              Catterick. The MOD owns two sites in the heart of Catterick Garrison with detailed planning permission for 315 houses, all designed to NZC. The SFA was originally required to meet the requirement to base two Strike Brigades in Catterick, however following the Integrated Review, the additional SFA was viewed as no longer required. The sites present an ideal opportunity to deliver 315 new NZC SFA that will allow personnel to walk or cycle to their duty station further enhancing the sustainability of the sites. Development of the two sites could either support increased demand under the New Accommodation Offer and/or enable the hand-back of older SFA stock to Annington Homes. However, due to a lack of funding both sites are currently being considered for sale and disposal.

 

Figure 6: New SFA sites at Catterick


Question 6.              What are the benefits and drawbacks of the Future Accommodation Model? How successful was the Future Accommodation Model pilot and what should the MOD take forward to include in the new accommodation offer? 

 

93.              The Future Accommodation Model programme is now called the New Accommodation Offer. The New Accommodation Offer will deliver two of the commitments made in the DAS: to ensure Service Personnel in long-term relationships are able to access the same accommodation support as their married or civil partnered colleagues; and to ensure that subsidised accommodation is allocated based primarily on the needs of Service Personnel and their families. More details of the New Accommodation Offer will be announced in the autumn ahead of its implementation from spring 2024.

 

94.              The principal intended benefit of the New Accommodation Offer programme is to increase overall Service Personnel satisfaction with their accommodation offer. This is expected to be achieved through: widening entitlement to family accommodation to all personnel in established long-term relationships and single personnel who have children who only live with them part of the time; supporting homeowners when they require separate weeknight accommodation at their duty station, irrespective of marital status; and giving personnel more choice of their home from within available accommodation types. The move to a needs-based entitlement will improve equity with personnel receiving support for a home that fits their family, not as a form of reward for seniority which disproportionately benefits only those Officers and Warrant Officers who choose to live in SFA. Whilst the New Accommodation Offer is not a savings programme, by moving away from allocating some personnel larger properties that exceed their need, Defence can make more efficient use of the SFA estate, thus minimising the need to supplement this with rental properties and widen entitlement without an associated increase in accommodation charges. Where individual personnel see a reduction in entitlement due to the removal of rank-based entitlement, they will receive transitional protection for three years.

 

95.              Although the FAM pilots were, to an extent, affected by reduced movement during the COVID pandemic, the MOD was able to gain valuable insights into the accommodation preferences of Service Personnel, their satisfaction with the pilot policy, and how that policy affected their accommodation decisions. The findings from the pilot have been used to inform policy for the New Accommodation Offer, including decisions around continued provision of SFA, how best to support homeowners, and the level of support required for personnel using the private rental sector. An evaluation plan is in place to understand the effectiveness of processes and the impact of the new policy brought in under the New Accommodation Offer; this will in turn be used to review and revise the offer as appropriate.


Question 7.              Is enough being done to help personnel leaving service transition to civilian housing?

 

96.              Defence Business Services (DBS) provides transition and welfare support to Service Personnel, Service leavers, veterans, the military bereaved, and their families via the Veterans Welfare Service (VWS), Defence Transition Services (DTS) and Integrated Personal Commissioning for Veterans (IPC4V).

 

97.              Clients can be referred to all three services via their in-Service Chain of Command or in-unit welfare or pastoral care staff, by a third party such as the Career Transition Partnership (CTP) or a charity or can self-refer. Enquiries or referrals can be made via email and phone call, via the Veterans UK Helpline, or via the Defence Transition Referral Protocol (DTRP), which is a dedicated referral pathway into the services.

 

98.              DTS operates from Defence’s Holistic Transition policy JSP 100 and VWS, DTS and IPC4V all work in partnership with the Chain of Command, where relevant, and with a multitude of partners in the public, private and charity sector to ensure clients are facilitated access to the entitlement and appropriate support.

 

The Services

 

99.              VWS supports Serving personnel, veterans, the military bereaved and their families who have an enduring welfare need or need help to access Department for Work and Pensions (DWP) benefits, or injury, bereavement and compensation schemes administered by the MOD.

 

100.          DTS helps Service leavers and their families who face challenges as they leave the military and adjust to civilian life.

 

101.          IPC4V is a joint programme with NHS England. The programme supports Armed Forces personnel who are leaving the Services and are suffering from complex and enduring physical, neurological or mental health issues resulting from an injury that is attributable to Service. IPC4V conducts a holistic review of all their clients, including their civilian housing needs and required adaptations.

 

102.          All three services provide information and guidance from signposting to holistic casework support, depending on the unique circumstances, needs, preferences and capacity of each client.

 

Housing Support

 

103.          In addition to the generic welfare and transition support outlined above, VWS, DTS and IPC4V provide the following specific housing guidance and support to the Armed Forces Community:

 

 

      1. To be more representative of the devolved nations.
      2. To include greater inclusion of subject matter expertise.
      3. To offer greater convenience of access through downloadable content on different topics/areas of the UK.
      4. To refresh the content for the new delivery year commencing September 2023.
      5. To capture meaningful data about the housing needs and concerns of attendees.

 

 

 

o        Liaison with SFA and Substitute Single Service Accommodation (SSSA) providers in relation to Notice to Vacate and Certificates of Cessation

o        Facilitating access to social housing and information on how the Armed Forces Covenant can be leveraged to support housing applications

o        Access to non-social housing providers and Armed Forces-specific providers

o        Bilateral referrals between Op Fortitude for those who meet the requisite criteria and/or who need wider transitional support

o        Support on DIO-led housing adaptations

o        Signposting and referrals for charitable support or funds to provide emergency or crisis accommodation, funding for white/brown goods, access to supported accommodation.

 

 

Statistics

 


Question 8.              Could the Service accommodation offer be more supportive to those experiencing relationship breakdown or domestic abuse? 

 

104.          The policies we have in place to support those experiencing a relationship breakdown are empathetic and fair. We have a duty to support transition into alternative accommodation following a loss of entitlement to publicly funded Service accommodation.

 

105.          We support couples seeking to work through relationship challenges by providing access to SLA to support a reconciliation/cooling off period for up to three months. This is provided free of charge and when combined with access to welfare services, including relationship counselling, can aid reconciliation.

 

106.          When a couple has reached the decision to notify their unit of a permanent separation, the serving person (as the licence holder for the SFA and the partner with the entitlement to service provided accommodation) is obliged to inform the Loss of Entitlement Team. The Team will then issue the 93-day Notice to Vacate (NTV). Issuing the Notice to Vacate at the appropriate point is important in ensuring that families can access services through their Local Authority if required.

 

107.          There is no doubt that this is often a very stressful time for both partners and, of course, if relevant, children, who are impacted by the relationship breakdown. In recognition of this, a Proportionality Exercise is conducted at the same time as the NTV is issued to determine if there are factors to warrant occupation beyond the 93-day period which will include schooling, medical or welfare needs. During this initial 93 days the non-serving partner is not liable for accommodation charges as these remain with the licence holder and the Loss of Entitlement Team will work with our welfare agencies to look at all options available.   

 

108.          Additional welfare support is available to partners or Service Personnel leaving an abusive relationship and decisions on accommodation arrangements are made on a case-by-case basis. The accommodation options include accessing safe, temporary accommodation such as the Service Cotswold Centre Services Cotswold Centre - GOV.UK (www.gov.uk), relocating to alternative SFA or supporting a partner to access civilian accommodation.   

 

109.          Should a family or partner who has lost their entitlement to SFA not be ready to move out of SFA at the end of the 93-day NTV period, DIO Accommodation already assesses the feasibility of allowing continued occupation on an alternative agreement upon the payment of market rates. Where this can be achieved with no negative impact to other entitled families, permission is likely to be given. Eligible families can use the housing element of universal credit if required.

 

110.          Additionally, the Armed Forces Covenant Team continues to work with Local Authorities to ensure that the unique needs of armed forces families are recognised and are not a barrier to accessing services including social housing. Statutory Guidance was updated in 2020. Improving access to social housing for members of the Armed Forces - GOV.UK (www.gov.uk)  


Annex A

 

SERVICE FAMILY ACCOMMODATION (SFA) IN OVERSEAS PERMANENT JOINT OPERATING BASES (PJOBS)

 

  1.                The current stock of circa 2,116 SFA homes across the four PJOB Overseas locations (Cyprus, Falkland Islands, Gibraltar, British Indian Ocean Territory) varies in terms of standard, condition, and grade. The majority of homes outside of the PJOB locations are Substitute SFA rented by the MOD off the local housing market. Exceptions to this are Belize and Germany where the host nation provides SFA, and 17 MOD owned SFA, 15 in the USA and two in Belgium.

 

  1.                Unlike the UK delivery model, SFA is maintained/managed alongside all other infrastructure assets under the OPC by the DIO’s Regional Delivery team, not a separate SFA contract. Gibraltar was the first PJOB to transition to OPC and service performance improvements are already emerging; DIO has been closely monitoring heating, hot water and D&M issues, and have seen a marked reduction of outstanding issues. An additional 12 SFA in Gibraltar are being purchased by DIO on behalf of UKStratCom, who are also working collaboratively with the Falkland Island Government to provide circa 30 new SFA at Mount Pleasant.

 

APOLLO Programme

 

  1.                The most significant activity to address Overseas SFA condition is the APOLLO programme in Cyprus. This is a £610 million investment programme over 10 years to replace and/or improve ageing domestic accommodation including by improving the resilience of infrastructure to seismic activity.

 

  1.                As of July 2023, 953 SFA (53%) of the total housing stock on the Sovereign Base Areas across Cyprus is seismically compliant. The APOLLO programme will deliver a total 1,801 seismically compliant SFA across the Eastern and Western Sovereign Base Areas by 2030/2031.

 

 

15 December 2023

30

 


[1] Regular Service Personnel are provided SFA or SLA. Where this is unavailable within ten miles of their base (or twenty miles for SFA if agreed with the local Chain of Command), ‘substitute’ accommodation (substitute SFA – SSFA or Substitute Single Service Accommodation – SSSA) is offered from the private rental market. The MOD attempts to offer this on as similar terms and procedures as possible to the equivalent service accommodation. The property is then sourced for the Service Person and the MOD takes on the contractual obligations, with the Service Person paying appropriate SFA or SLA charges direct from their pay.

[2] The ‘fix on fail’ approach was formally adopted in 2010 when DIO’s budget for maintenance was severely cut and a decision was taken to suspend proactive/preventative maintenance. Initially, that was intended to be for one Financial Year, but continued lack of funding saw the approach built into the Next Generation Estates Contracts, which included the National Housing Prime contract that ran from 2014 to March 2022. FDIS has restored provision for proactive/preventative maintenance through the adoption of SFG20 (industry standard) maintenance regimes, but performance issues in the first year, and some difficulties translating SFG20 from the Built Estate into Accommodation, mean the benefits have not yet been seen.

 

 

 

 

[3] Rent cap on social housing to protect millions of tenants from rising cost of living - GOV.UK (www.gov.uk)