CONSERVATIVE
New Forest East

9th REPORT OF 2017–19: 'ARMED FORCES COVENANT ANNUAL REPORT 2017' (HC 707)

Ministry of Defence must uphold the Forces' Covenant

Defence Committee Press Notice – 30 June 2018

The Ministry of Defence (MoD) must show that it has learned the lessons of the lamentable record, in managing Service accommodation, of CarillionAmey, Defence Infrastructure Organisation (DIO) and the Ministry itself. So says the Defence Committee in its latest report, published on the 2018 Armed Forces Day, into the Armed Forces Covenant. (The Covenant expresses the moral obligation that the Government owes to those who serve or have served in our Armed Forces, and to their families.)

It is clear to the Committee that the accommodation contract was 'not fit for purpose' and it is unacceptable that there are no enforcement measures that can be imposed on CarillionAmey for their shortcomings. In addition, the MoD's agreement with Annington Homes has proved to be a disastrous failure and has exposed the Department to considerable risk. That flawed agreement is yet another example from which the MoD, the DIO, and wider Government—especially the Treasury—must quickly learn lessons.

Mark Francois MP comments

Mark Francois MP, Defence Committee member and former infantryman, says:

"For years, Service personnel have received a sub-standard accommodation service from the Defence Infrastructure Organisation and their contractors. This has gone on long enough and simply has to change. The DIO is a frankly dysfunctional organisation and the Committee is now calling on MoD Ministers to get a grip and come up with a radical action plan to reform the DIO and show Service personnel and their families that they are indeed valued and will be treated as such in the future."

The Committee is asking the MoD to show how it will learn lessons from the appalling accommodation story and how it will apply them to future contracts. Failure to improve the maintenance of Service accommodation will have a major adverse impact on recruitment and retention in the Armed Forces.

1% pay cap

If the MoD retains the 1% pay cap for Service personnel while other departments increase their pay, it will undermine morale and have an increased negative effect on recruitment and retention. While the Government has signalled that there is some flexibility for departments to move away from the public sector pay cap of 1%, it seems that no additional funding will be made available to the MoD to pay for increases above this level for Service personnel.

Chairman's comments

Chairman of the Defence Committee, Julian Lewis MP, says:

"It would be disgraceful if our Service people missed out on an increase in pay while they watched others who work for the Government receive pay awards. What kind of message does that send to soldiers about how much we value the difficult and sometimes dangerous job that they do?"

The Veterans Board

The report welcomes the creation of a new Veterans Board, even though it lacks formal Cabinet Sub-Committee status. The Committee calls for the status of the Veterans Board and the frequency of its meetings to be kept under review so momentum is not lost in terms of its work.

The Armed Forces Covenant is a UK-wide commitment and the report is therefore asking the Government to ensure the full participation of the devolved administrations in its governance. Therefore, the report calls for the devolved administrations to have full-member representation on the Veterans Board. This would provide an opportunity for best practice from every area of the UK to be shared and adopted, leading to better co-ordination and delivery of the Covenant across the country.

As a priority, the Veterans Board must develop the appropriate mechanisms to hold Government departments to account within their areas of responsibility. As a first step in focusing each department's work on the Covenant and veterans’ issues, the report calls for relevant Government departments to include a section in their Annual Reports and Accounts on how they have discharged their responsibilities for these matters.

War Widows

The Committee was concerned to hear that war widows and widowers believe that they are at risk of being forgotten and that they have been neglected for a long time. The MoD must do whatever it has to in order to reverse this view. The Government should urgently address the concerns raised that a War Widow's Pension is often incorrectly perceived as a benefit rather than compensation for loss of a spouse or partner. If it were treated as compensation as it should be it would not result in the loss of, or reduction in, income-related benefits.

Similarly, the Government must

"urgently address the absurd anomaly where a war widower or widow, who lost his or her pension upon cohabitation or remarriage, and did not get it reinstated because it was before the reinstatement date, could … get it restored by temporarily splitting up and then reuniting with the former spouse or partner".

Use of LIBOR Grants

An element of independent scrutiny must be built into the monitoring of the Covenant. This is particularly important as the Government proceeds with the new and comprehensive Veterans Strategy, informed by such valuable initiatives as the Veterans Gateway and the Map of Need. There are concerns following the NAO's findings that the Treasury and the MoD still cannot confirm that charities properly spent all their grants that were awarded to them through the distribution of the benefits of the LIBOR fines. The Committee says that delay in the Government’s review is unacceptable and has resulted in heightened concerns about the use of LIBOR funding for Covenant projects.

[To read the full Report, click here.]

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REPORT SUMMARY

The principles of the Armed Forces Covenant are enshrined in law. Therefore, it is the responsibility of the whole of Government to ensure that they are being successfully communicated and implemented. This cannot be done by the Ministry of Defence (MoD) alone. The Government has acknowledged the need for stronger governance structures for the implementation and delivery of the Covenant. We welcome the establishment of the Veterans Board and the appointment of ‘lead’ Ministers in each relevant Government Department. However, delivery of the Covenant is also UK-wide and we call on the Government to ensure the full participation of the devolved administrations in the governance of the Covenant, especially as part of the Veterans Board. This will help ensure uniformity of delivery and the sharing of best practice.

The new arrangements must be kept under review, so that momentum is maintained on Covenant pledges. We therefore recommend that an element of independent scrutiny must be built into the monitoring of the Covenant. This is particularly important as the Government proceeds with the new and comprehensive Veterans Strategy, informed by such valuable initiatives as the Veterans Gateway and the Map of Need. Independent scrutiny should help maintain the correct balance between the needs of veterans and those of current Service personnel.

We acknowledge that LIBOR funding has delivered positive results for veterans and for current Service personnel and their families; but we are concerned by the National Audit Office’s findings that the Treasury and the MoD still cannot confirm that charities spent all LIBOR grants as intended. Although the Government is undertaking a retrospective review of 236 projects, it is disappointing that this review, originally due to report in December 2017, has yet to be completed. This delay is unacceptable and has resulted in heightened concerns about the use of LIBOR funding for Covenant projects. The completion of the review must be prioritised.

We are particularly concerned about poor performance and serious challenges in respect of accommodation. The record of CarillionAmey, the Ministry of Defence and the Defence Infrastructure Organisation (DIO) in managing Service accommodation has been lamentable. It is clear to us that the contract was ‘not fit for purpose’ and it is unacceptable that there are no enforcement measures that can be imposed on CarillionAmey – which is now solely owned and operated by Amey. This is because they met the minimum standards set out in the contract – standards which were woefully low. In addition, the MoD’s agreement with Annington Homes has proved to be a disastrous failure and has exposed the Department to considerable risk. That flawed agreement is yet another example from which the MoD, the DIO, and wider Government – especially the Treasury – must quickly learn lessons. The Modernising Defence Programme needs to address the potential implications for the core MoD budget.

We welcome the Government’s willingness to show some flexibility for Departments wishing to move away from the public sector pay cap of 1%. Still, we note that no additional funding will be made available to the MoD for increases above this level for Service personnel, if such increases are awarded. The pay cap has had a negative impact on the morale of, recruitment to, and retention in the Armed Forces. The MoD must ensure that these factors are taken into account when determining the pay award. An award limited to 1% would be very disappointing, and risk further undermining morale and increasing the negative effect of pay restraint on recruitment and retention.

Our report also considers other specific issues in respect of healthcare, education, the Covenant in Business and the Community Covenant.

We enthusiastically support the Covenant. Our Report is intended to be a constructive contribution to its delivery, and to the achievement of its goal: that Service personnel and Veterans should suffer no disadvantage as a result of their current or former choice of career.