Select Committee on Public Accounts Appendices to the Minutes of Evidence


Supplementary memorandum submitted by the Ministry of Defence (PAC/1999-2000/280, 283)

Question 16.  Amplification of the £11 million "dead money" included in the figure of £39 million

  1.  At the time of the NAO study there were 14,425 properties which would cost £39 million over a full year in rent and maintenance. Within this total there were:

    583 allocated for anticipated unit deployment;
    1,339 awaiting or being modernised;
    3,028 awaiting disposal; and
    4,970 under offer to incoming families.

  2.  This leaves a balance of 4,505 properties for which there was no immediate Defence use at an estimated cost of £11 million.

  3.  By the end of August 2000 the total number of empty properties was 14,352 which would cost £41 million over a full year in rent and maintenance. Within this total, there were:

    2,112 allocated for anticipated unit deployment;
    1,647 awaiting or being modernised;
    5,571 awaiting disposal; and
    3,344 under offer to incoming families.

  4.  The balance of 1,678 properties for which there is no immediate Defence use is estimated to cost £4.3 million.

Question 183.  Projection of "ghost" properties and the payments over the life of the contract

  5.  The term "ghost rent" applies to the payment of full rent on an Annington Homes property which has subsequently been demolished and not rebuilt. At each 25-year point in the Annington underlease, a full site review will be undertaken which will take account of all changes made to properties at each site and the rent levels will be negotiated accordingly. Any ghost rents in payment would be subsumed in that review. The number of properties currently falling into this category is 977. It is not possible to forecast with certainty the full cost of the "ghost rent" relating to these properties because of the difficulty of anticipating movements in market rents generally, on which future rent increases will be based. However, on the basis of best available information it is estimated that the current "ghost rent" liability throughout the first 25-year period is likely to be in the region of £50 million to £60 million. It is not possible to forecast accurately future demolitions which may be necessary for structural or environmental reasons.

Questions 186-189.  Brief progress report up to the end of 2001 showing DHE's achievement against targets in reducing the number of vacant properties

  6.  The disposal target for the period 1 January 2000 to 31 March 2001 is 6,500. To date, 2,300 properties have either been transferred to Annington Homes, passed to Defence Estates for disposal on the open market or demolished. Termination notices have been issued to Annington Homes in respect of a further 3,330 properties with hand back dates ahead of 31 March 2001. Annington Homes are contractually obliged to accept these properties within that timescale. A further 830 MOD-owned properties are due to be disposed of through Defence Estates and another 18 properties are due to be demolished. A further report will be provided to the Committee at the end of the financial year to confirm final achievement.

Question 78.  Number of empty properties behind the wire that are offered to single soldiers

  Approximately 100 properties behind the wire are used to house single soldiers where there is a shortage of barrack accommodation. A further 55 are currently occupied by ex-Service personnel or their families prior to their resettlement into the civilian sector.

20 November 2000

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