32. The Ministry of Defence has committed to providing service personnel with subsidised accommodation. In July 2018, this Committee reported on the arrangement with Annington Property Limited, under which the married quarters estate was sold off and rented back for up to 200 years. We expressed concern at the 'disastrous' deal and noted that the situation could get worse because the rent levels are to be reviewed from 2021. Depending on the negotiations, the Department's costs could increase significantly at a time when the defence budget is already stretched.62
33. In November 2018, the Department provided an update on the Annington arrangement.63 It told us that it was working with Annington Property Limited on an accelerated site review process. It is hopeful that agreeing this approach will avoid the need to review every site, which was due to start in 2021, and that the accelerated programme would be completed before that date.64 The Department said that Annington was also not keen on an extended site review. It also stated it was making good progress resetting some of the terms of the agreement with Annington to allow better management of the estate, particularly around voids and dilapedations, and would provide further information when it was available. In its November 2018 update, the Department also set out a plan to reduce empty properties to around 12% by 2022, rather than the 10% target that the Committee had recommended. Because negotiations are still on-going, the Department was reluctant to go into much detail but stated that since the Committee' evidence session in January 2018 it felt that there had been a noticeable change in relations.65
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62 Committee of Public Accounts, Fifty-third Report of Session 2017-19, Ministry of Defence's contract with Annington Property Limited, HC 974, 13 July 2018
63 Letter from Stephen Lovegrove to Chair of the Public Accounts Committee, 30 November 2018
64 Q167
65 Qq 169-170