Public Accounts Committee

Ministry of Defence contract with Annington Homes inquiry

Inquiry status: open

Report published 13 July 2018. Awaiting Government response.

Report published

Scope of the inquiry

A fundamental part of remuneration for UK armed forces is subsidised housing. Accommodation is provided for single people and for families.

In 1996, the Ministry of Defence sold 999-year leases on 55,000 housing units for married service personnel. It then rented these back on 200-year leases from Annington Property Ltd. In 1997, the National Audit Office reported (PDF PDF 381 KB) that the Department would have received better value by retaining the estate rather than selling it, and that much responsibility for managing the properties remained with the government.

More than 20 years on, the National Audit Office has produced a further report about the contract. It found that the Ministry of Defence is at least £2.2 billion worse off since selling the houses than it could have been had it retained them. It also expressed concerns that it could not certify whether future rent payments from the Ministry to Annington homes would take into accounts risks and costs the Ministry of Defence carried, and so estimates for future rent costs were not clear. The report also found that Annington Property Ltd’s investors continue to make significant returns off the homes.

The Committee will ask representatives from the Ministry of Defence how they will improve the terms of the deal, what assurances they have about future costs of rent to the taxpayer, and how they will ensure to provide good-quality accommodation to the armed forces.

Publications

Read all transcripts, written evidence and other material related to the inquiry on the Ministry of Defence contract with Annington Homes.

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