Ministry of Defence Tenants: Evictions

– in the House of Commons at 4:00 pm on 15th October 2020.

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Motion made, and Question proposed, That this House do now adjourn.—(Maria Caulfield.)

Photo of Stephen Crabb Stephen Crabb Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee 5:18 pm, 15th October 2020

I am grateful to have secured this debate on the efforts by the Ministry of Defence to evict civilian tenants living in service family accommodation that is no longer required for use by the armed forces. I will focus my remarks principally on the affected families in my constituency, but I am aware that around a dozen other colleagues have constituents who have received similar eviction notices in recent days. I will try to keep my remarks as brief as possible in order to allow my hon. Friend Danny Kruger to speak, too.

I am delighted to see the Minister for Defence Procurement, my hon. Friend Jeremy Quin, in his place. The last time we faced each other was in a Westminster Hall debate in February. On that occasion, we were discussing the planned closure of Cawdor barracks, which is the home of 14 Signal Regiment in my constituency. I used that debate to explain why I thought that closure decision was a bad one. I still think it is a bad decision, but today I will focus on what the Ministry of Defence is doing with the stock of service family accommodation linked to that base, and specifically the houses that are no longer required for service use, which are now being sub-let to civilian tenants.

These houses are part of the Cashfield Estate in Haverfordwest, some 10 miles from the isolated base at Brawdy in north-west Pembrokeshire. There are, of course, Army families still living on the estate, but it is not full. The number of empty properties fluctuates over time, depending on service requirements. Alongside the empty properties, which I think are known in the language of the MOD as voids, live civilian families, renting homes at market rates. These are properties that the MOD has decided it will never need to use again because of the overall service requirement, and because of the decision to exit the Cawdor Barracks base. The properties are being sub-let by the MOD through its contracted letting agency, Orchard & Shipman.

Cashfield is a small and pleasant estate, built around 25 years ago. It is good quality housing on the edge of Haverfordwest, just a short walk from the town centre and the local supermarkets. It is a nice place to live; I have heard that so many times over the years from service families living there. The properties in question are part of the enormous portfolio of service accommodation that was sold to Annington Homes Ltd in 1996 through a lease and leaseback contract.

I have no intention of using the short time I have today to remind the House of the full history of that private finance initiative deal, or of how it has performed in terms of its value for money for the taxpayer. Instead, I urge any interested colleagues to read what the National Audit Office and the Public Accounts Committee have had to say on the subject. They have produced several reports on this matter over a number of years. However, the context is important, because what struck me when I read through the history of the deal—which by the way has hundreds of years left to run—was the sheer complexity of some of the arrangements entered into by the MOD and Annington, as well as the way that multiple agreements and reviews between the two parties, and the mixture of incentives and obligations that fall on them both, have served to create a moment when the MOD now feels it needs to evict civilian families in order to hand empty properties back to Annington.

Photo of Shailesh Vara Shailesh Vara Conservative, North West Cambridgeshire

My right hon. Friend is making a powerful case. He mentions the complexity of the agreements. Given the pandemic and all the circumstances as well as the size of the Ministry of Defence and Annington Homes, which is a very big company, does he agree that they need to do the right thing by both parties and not get bogged down in the details?

Photo of Stephen Crabb Stephen Crabb Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

I completely agree with my hon. Friend, and caught in the middle of those two big parties are the residents affected—our constituents, who are being told that they need to change their life plans and find somewhere else to live at the worst possible time.

I first became aware of what was happening on 11 September. A constituent contacted me in distress, after having received an email from the letting agent on 9 September with the subject header “Notice to Quit”. The email explained that the MOD had decided that it no longer wished to continue with the current lease and was thus planning to terminate the tenancies by the end of March 2021. My constituent was told that they would receive a formal notice to quit from the Defence Infrastructure Organisation in the next few days, and that they would have six months to leave.

Over the next few days, I received similar emails from other residents, all expressing anxiety and shock at the news and all incredibly worried about what the future would hold for them and their families. My first reaction was to assume that this was a move initiated by Annington, which after all basically owns the properties. I was really surprised and disappointed to find out, from reading the emails and then speaking to residents in person, that it is actually the Ministry of Defence that is behind this eviction. With no concrete reason or explanation it is evicting a bloc of families in the middle of a pandemic, and at a time of mounting economic uncertainty and hardship. There is no plan whatever for what should happen to those families, and I just feel that that is unacceptable. We can, and should, do a lot better.

Photo of Bob Stewart Bob Stewart Conservative, Beckenham

I just do not understand this. The Ministry of Defence does not own the properties but it is telling the residents to get out. Annington owns them, so why does the MOD have a dog in the fight?

Photo of Stephen Crabb Stephen Crabb Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

Because, as I said, the PFI deal was a lease and leaseback arrangement, so the MOD has leased back the homes—I think for a period of about 200 years, but the Minister will enlighten us further. It is a complicated arrangement, and caught in the middle of it are these families, who have now been told at the worst possible moment, “You have to get out and find somewhere else to live.”

Annington Homes has told me categorically that it was not aware of those notices being sent out. The housing department of Pembrokeshire County Council tells me that it was not aware of them. I am not sure that Ministers were informed and, given the comments of the permanent secretary at the Public Accounts Committee a fortnight ago, it looks as if senior civil servants were not informed either—certainly local Members of Parliament were not given any warning. So the move by the MOD came well and truly out of the blue.

The Minister is fully aware of my concern and anger about the issue; I appreciate his taking the time to discuss it with me when I first became aware of it. He has since responded to letters from me and other colleagues and met us as a cross party group to discuss the matter. We really appreciate that. I am fully aware of the financial pressures on his Department over service accommodation—especially the empty properties, which are losing significant sums for the Government. I am also fully aware of the commitments that the Department has entered into with Annington to hand back blocks of empty housing over the next few years.

The question for us is how we should treat the properties where civilian families are living. I have heard it said by Ministers on previous occasions that the MOD should not really be in the business of being a landlord to civilian tenants, and I have some sympathy for that view. But as recently as January this year, Ministers were acknowledging that sub-letting to civilian tenants is actually a core part of MOD strategy. In answer to Lord Hylton in the other place, the Minister of State said in a written answer:

“The Department is focused on reducing the number of empty properties in the UK from the current level of 20% overall to a 10% management margin by Autumn 2021. This is being achieved by handing back vacant properties in England and Wales to Annington Homes;
widening eligibility to cohabiting couples and Service leavers;
and”— this is the important bit—

“accelerating the letting of temporarily empty properties to screened members of the public at prevailing market rates.”

So yes, the MOD is very much in the business of being a landlord. Indeed, when we consider that the MOD is paying Annington only 42% of market rent for the properties, it is difficult to see how it cannot make money by letting to civilian families. But that is a side issue as far as today is concerned.

One of my main points to the Minister this evening is to encourage the MOD to be a good landlord. Many of us will have experience of renting over the years and will know some of the key characteristics of good landlords, who recognise the importance of treating tenants fairly: providing clear, open information at all times and taking the time to share with tenants their intentions if they wish to dispose of properties. That has not happened in this case. I would go further. Given the unique circumstances we are in, I urge the Department to be not just a good landlord but a model landlord. The uncertainty and, sadly, the increase in unemployment and hardship, mean that this is a rotten time for someone to be told to quit the home they rent. We have a duty to look after these families.

My second point to the Minister, stemming from the first, is that, although the Department may sometimes speak in—forgive me—the cold language of “units”, “voids”, “vacancy rates”, “dilapidation relief” and so on, what we are actually talking about here are homes: homes where, behind each front door, there are individuals and families whose viewpoint and experience in all this, I think, really matters.

I have spent time talking to the tenants on the estate and many have since emailed me their stories: why they decided to move there and what living there means for them. One of the things that really troubles me is the number of them who said that they were under the impression that the property would be a long-term home; they did not see it as a short-term let—a place to stay before moving on somewhere else—at all. They have settled there and do not want to move.

One constituent told me how he had found the property online through Zoopla; it was listed with Orchard & Shipman. It was perfect for him and his family—it is near his work, it allows pets and it has a garage. He describes the location as lovely: nice and peaceful. They get on with all the neighbours. Since this announcement, he has started to look around for a new home, but he cannot find one; Pembrokeshire is not exactly full of available, good quality, affordable housing options at this time. The news is really devastating for his family and others across the estate.

Another constituent is finding the situation equally hard. She and her family had struggled to find a home until these homes became available and they moved in early 2018. They love living on the estate, which is near their work. They are finding it almost impossible to find other available properties. When they moved in, they were told that the only reason they would have to vacate was if the nearby barracks at Brawdy increased the numbers, but as we have discussed, Brawdy is earmarked for closure, so they naturally and rightly assumed that this was unlikely and felt that it was going to be a pretty secure long-term tenancy. This decision has completely blindsided them.

I have other testimonies from people who are living there, some of whom have disabled or vulnerable family members, and they all say the same thing. They say that it is a nice estate, that they enjoy living there and that there is very little alternative provision of good-quality, affordable accommodation. That is the third point I want to leave the Minister with this evening: what is the current situation regarding the availability of quality affordable accommodation locally? Yesterday I spoke to the housing department of the county council just to check again whether its assessment of the situation was the same as mine, and it confirmed that evicting a group of 17 families at one time would create real problems for it, saying that very few properties were becoming available at this time and that finding new homes would be difficult.

So what is to be done? The first response from the MOD when challenged on this was to extend the notice period from six to 12 months where there were cases of hardship, and I appreciate the Minister’s team trying to plot a way forward that is fair and workable, but I think we can and should do better. I believe that, in the first instance, these notices need to be withdrawn, in order to create peace of mind for the families affected. That is the first thing I will be asking the Minister to do.

The Ministry also needs to do something that it never did at the start, which is to sit down with Annington, with my local authority, the county council, and with any interested housing associations to work out a plan for the properties that does two things. First, it must enable these good-quality homes to become part of the local affordable housing stock. Secondly, it must enable the tenancies to be transferred seamlessly, with no family forced out against their wishes. It cannot be beyond the wisdom and good sense of all the interested parties to work out a solution that is fair and just, notwithstanding all the mind-boggling complexity of the deal between Annington and the MOD. I know that the county council has already spoken to Annington, and there is the beginning of a discussion about what might be possible, but I hope the MOD will also speak to Pembrokeshire County Council directly about this.

I am aware of one further headache, and it relates to the arrangements that are in place for water services to the estate to be delivered via a deal that is currently dependent on the MOD base. I have spoken to Welsh Water about this, and it tells me that it owns the infrastructure, so this is not a question of shared infrastructure; it is purely a financial arrangement. Again, it cannot be beyond the intelligence and good judgment of people to sort this out.

Let me finish by saying that the Minister is a good Minister—he knows Wales and he is a highly intelligent man who has a great heart—and I am appealing to him to try to find a way forward for us that is workable and just. I will leave him with the point that Annington receives more than £180 million every year in rents from the MOD on an estate that is valued at somewhere around £7.2 billion. Surely, with the resources of the MOD together with the powerful resources of Annington, he can come up with a solution that allows people to stay in their homes, enjoy their Christmas and not have to worry about putting another roof over their heads, with all the heartache that comes with that, at the worst possible time.

Photo of Danny Kruger Danny Kruger Conservative, Devizes 5:33 pm, 15th October 2020

I thank my right hon. Friend Stephen Crabb for securing this important debate and for that absolutely excellent speech. I agree with every word of it. I also want to pay tribute to the Minister, who, since this sad story came to his attention—rather too late, I fear—has engaged with me and other Members from across the House in a really tremendous and constructive way. I pay tribute to the efforts he is making on behalf of our constituents.

I invite the House to consider the plight of these constituents of ours, including more than 100 families across Wiltshire, some of whom I represent. In this terrible crisis that the whole country is in, they are worrying about their children’s education, worrying about their own jobs and employment prospects and worrying about their elderly parents, and suddenly they are being told that they also have to worry about their own homes. The threat of having to leave immediately was hanging over them, as a very short notice period given. I pay tribute to the Minister for his efforts to extend that notice period, but I am afraid that even 12 months is too short. As my right hon. Friend says, we have to do better than that.

There are really only two possible satisfactory solutions for these families. One is that Annington agrees to take back the homes with the tenants in place and to give them some security of tenure, so that it cannot just evict them a couple of weeks after receiving them back. The other is that the Government work with Annington and with local authorities to ensure that the houses can be passed over to local councils or to their subsidiaries. In Wiltshire, we have an excellent company called Stone Circle, which is a subsidiary of the local authority and which would be very glad to take possession—take ownership—of those houses, but this requires Annington to co-operate. As my right hon. Friend says, it should be able to do that. It secured the houses 25 years ago or so for less than £2 billion. They are now worth over £7 billion. It has had a very good ride thanks to the taxpayer, and it should now be enjoined to do everything it can.

I end by echoing my right hon. Friend’s point: please would the Minister, with the undoubted good will that he has for these families, convene and host a proper, open and transparent conversation with all the interested parties, including Annington, Members of the House and our local authorities, about which assets are actually under threat—because it is not just the families that we currently know about; there are probably more—and work with all those parties to devise a plan that ensures that these families can remain in their homes?

Photo of Jeremy Quin Jeremy Quin The Minister of State, Ministry of Defence 5:35 pm, 15th October 2020

Over the last few weeks, I have had many discussions with my right hon. Friend Stephen Crabb and other colleagues here today who are representing the 14 sites around England where this has taken place. I am acutely aware from those discussions, and the emails and communications that my hon. Friends have been receiving from their constituents, what a great distress these notices to quit have caused. I am very grateful that my right hon. Friend secured this debate this evening so that we could put more clarity on the situation.

It is perfectly understandable that there are so many difficulties faced by families at this time, as hon. Members have highlighted in this evening’s debate, and I am determined that we do all we can to get to a better solution. I reaffirm at the outset that while we have given notice on these 350 homes, the notice period is a full 12 months for all those homes and for every tenant, taking us through to the end of September 2021. I want to provide full clarity to tenants as soon as possible, but we are totally committed, over the next few weeks and months—if a way can possibly be found with Annington, as my hon. Friend Mr Vara and other Members suggested —to finding a way to enable tenants to have the offer of remaining in their homes when those properties transfer.

I should be clear from the outset that the MOD’s service family accommodation has one strategic purpose, which is to provide homes for our service personnel and their families wherever and whenever they are required to serve. When we no longer need housing to meet military requirements, they are disposed of. My right hon. Friend is absolutely right that over recent years, to reduce the voids, for reasons I will get on to, where properties have been temporarily vacant, we have made those available for sub-let to civilians.

Until 1996, the MOD owned the vast majority of service accommodation outright. However, that year, the MOD entered into an agreement with Annington Homes Ltd. Under the agreement, the MOD provided a 999-year lease to Annington over 57,428 homes. The MOD proceeded to sub-let the same properties under a 200-year underlease. Under the terms of the arrangement, the MOD retained all the costs of maintaining and managing the estate. This, among other reasons, meant that the MOD received a 58% discount on open market rents for the houses concerned for the first 25 years. Hon. Members will appreciate that those 25 years start to come up from next year. Annington has publicly stated that it believes that new rental arrangements should result in a significant increase in rent. The MOD disagrees and the matter is currently subject to arbitration.

Given that both parties recognised from the outset that the needs for MOD housing evolve over time, there was always an understanding that the MOD can return homes to Annington, and since 1996, over 19,000 homes have indeed been given back. Furthermore, last year, we agreed with Annington that we would hand back a minimum of 500 properties annually for the next seven years in return for a reduction on the dilapidation charge on each house of up to £7,000 per property, delivering up to a £24.5 million improvement to the taxpayer. However, homes can only be handed back as a group of contiguous properties, usually minimum packages of 20 homes. Where a group of properties is vacant, and it is absolutely clear that there is no future military use, the route to hand-back is very clear. However, in many cases , I am afraid, the situation has lacked that clarity, and rather than leave family homes vacant for potentially years, the MOD has sub-let those homes on a short-term basis to civilian tenants. First, this provides a home to the tenants; and secondly, it mitigates the cost to the MOD while longer-term decisions are made, or, indeed, while a vacancy exists before service personnel move in. Let me emphasise that we do not actually make money on these civilian lets. After all associated costs, the MOD estimates that they are, on average, loss making, but it is only a small loss compared with that which would otherwise be the case. About 1,500 Annington Homes properties have been sub-let in this way.

I am very sorry that decisions were taken—my right hon. Friend raised this—on the notice to quit and communications made without MPs or, indeed, the local authorities being informed sooner. Decisions that were made on the portfolio of properties that would be passed back to Annington as part of a wider programme were only made during the course of the summer, and I am afraid that covid did have a direct impact on this timing. During the lockdown, base moves were frozen. This has had an ongoing impact throughout the defence estate, with homes that might have been vacated remaining occupied for longer. In addition, during the same period, more than 1,200 service personnel and family members who would ordinarily have moved on from SFA housing either due to the end of service or, sadly, in some cases, due to family estrangement, have, as a result of the specific circumstances of covid, remained in their homes. This number continues to grow.

The consequences of these constraints forced us to identify other properties surplus to MOD requirements that we could hand back. But whatever the strategic position for the MOD and the nature of the short-term tenancies entered into, I want action to be taken for the future, to pick up on the point raised by my right hon. Friend. While it is absolutely right that temporarily vacant homes are made available for rent rather than being left vacant, I want greater clarity at the outset given to residents if the property is expected to be required for military use or disposal, and, if so, in what timeframe.

Photo of Stephen Crabb Stephen Crabb Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

Has my hon. Friend looked at the way these houses are being marketed through Orchard & Shipman? Is it being straight with these families about the terms on which they are taking on these properties? Many of the residents in my constituency tell me that they were under the impression that this would be secure and that they could look forward to many years of living in these properties.

Photo of Jeremy Quin Jeremy Quin The Minister of State, Ministry of Defence

No such impression should have been given. These are short-term lets with, after the first four months, two months’ notice periods. They are temporarily vacant and they are being occupied on that basis. I was very concerned to hear from my right hon. Friend and from others that that might have taken place. I have received absolute assurances that that was not part of the marketing strategy from the managing agents.

Photo of Shailesh Vara Shailesh Vara Conservative, North West Cambridgeshire

In my constituency, as my hon. Friend knows, there are some 60 such houses in Wittering. Certainly some of those householders were told that this would be medium to long-term, and some of them have only recently moved in—literally a few weeks ago.

Photo of Jeremy Quin Jeremy Quin The Minister of State, Ministry of Defence

I have been aware of that from my hon. Friend. I am particularly sorry to hear that that was the case, and it should not have been the case. I have had written assurances that no such undertakings were received, but if he would like to write to me further, I will of course pick up on that. I had a written assurance that that was not the case and not part of the marketing, and it certainly should never have been part of the marketing of these properties. We would of course look into that and take it enormously seriously if it was the case.

That makes it even more clear that what we need to ensure for the future is that there is more clarity given to sub-letting tenants. It would be a crying shame not to make homes available that are vacant, but we need to make certain that we are clear regarding tenancies. That work is also being undertaken so that where there are existing tenancies in place, the same process should take place so that tenants can have that peace of mind for the future. I also want to ensure that in circumstances where disposals are due to take place, as in the case that my hon. Friend the Member for North West Cambridgeshire raised, wherever possible those are staggered over time to reduce the impact on local communities. It clearly has a significant impact on local housing demand where disposals happen in too great a number, and I am sure that we can make certain that we stagger them in the future.

My right hon. Friend the Member for Preseli Pembrokeshire asked why we could not simply rescind. I understand the passion behind the question and I understand what drives it. I cannot pretend to these civilian tenants that there is a long-term future in the MOD estate—that simply is not the case—but I am determined that we will do all we can to make the transfer and the transition as smooth as possible.

My right hon. Friend is also absolutely right that the properties at Cormorant Close are not linked to base utilities. In fairness to Annington, a lot of the data on this goes right back to 1996. I have had a full review of the circumstances for each of these, and we will obviously share that with Annington as, I hope, we move towards a better solution—I sincerely hope that we do—but it turns out that only four of the 14 sites have that linkage to MOD utilities. I hope that is helpful in ongoing discussions.

I do really want us to secure a good and improved circumstance for our tenants. If we can work with social housing providers, as my hon. Friend Danny Kruger mentioned, we would clearly wish to do so. We cannot sell to social housing providers; if we can facilitate a process with Annington Homes—that may well be in its interests—we would be very keen to do exactly that.

My right hon. Friend the Member for Preseli Pembrokeshire asked about the overall shape of things. Yes, we must work with Annington. I really do hope that we can get somewhere. Many Ministers before me have looked at this agreement in detail to find out what levers they have. I am again reviewing where we are with the circumstances, but I really hope that we can come to an agreement. In fairness to Annington, it has not said that it has an in-principle opposition to finding an arrangement, but I am aware that come September next year, it will have the absolute right to demand vacant possession of the homes being transferred. However, we are determined to work with it.

I sincerely hope that we can come to a satisfactory conclusion that works for Annington and works for these sub-let tenants. We will do all we can to try to get to a situation that will work for Annington and has benefits for the tenants concerned.

Question put and agreed to.

House adjourned.