The great army housing scandal

“… Having sold off a few of the prefab houses in St Eval [a former army base in Cornwall], Annington Homes learned that if it flattened the rest of the rotting concrete boxes and rebuilt new houses in their place, the local authority would insist the company supplied 40% affordable housing – considerably reducing its profit margin. So it came up with an ingenious solution.

Once the units on the former base were empty, Annington sent in teams of builders who would carry out the same operation, over and over. First, they would knock down the walls, securing them with temporary steel supports known as acrow props. Next, with the old roof secured in mid-air, the builders remade the walls with bricks. Once they were secure, the builders put the roof back in place, and moved on to the next house.

The process took years to complete, but by preserving the roofs, Annington avoided the expense of having to supply low-cost housing. “You’ve got a 1950s roof with a brand new house underneath,” recalled Trevor Windsor. “New kitchen, new floors, new ceilings. It was very clever – a brilliant bit of civil engineering.” (Though Hough doesn’t quite agree. She believes the process has “given the houses slightly uneven floors and doors that don’t quite fit.”)

This episode in St Eval was not the only element of the 1996 deal in which Annington ran rings around the state. In fact, it now looks representative. The full extent of the fallout from the deal – for the MoD, residents and taxpayers – is only now being understood. When Kevan Jones was minister for veterans under Gordon Brown, he called in representatives from the company, in order to try and make sense of the arrangements. “I tried to get us out of it, but it was impossible,” Jones told me. “It was an incredibly bad deal for the taxpayer. I just couldn’t believe that the former government had signed it.”

The deal signed by the MoD has become a millstone. Today, the houses that Annington bought for £1.67bn are worth £6.7bn. Under the terms of the deal, the MoD rents back thousands of houses for members of the armed forces and their families. Last year, the rental bill for 39,014 houses around the country was £167m. Of those houses for which the MoD was paying millions in rent, 7,680 were empty.

There is worse to come. The original deal gave the MoD a 58% discount on renting the houses for the first 25 years. It also allows a rent review every 25 years. The first rent review will take place in 2021 and there is nothing to stop Annington charging full market value after that point. If that happens, the MoD’s bill for accommodation for its servicemen and women will rocket and Britain’s armed forces will be faced with enormous existential questions. …”

One thought on “The great army housing scandal

  1. I have yet to see a privatisation deal of any flavour (even ones where they didn’t run rings around the government) that has been good for the public in the long term. Not a single one.

    If anyone can point one out, I would be interested to know.


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