House of Commons - Public Accounts - Thirty-Seventh Report

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Select Committee on Public Accounts Thirty-Seventh Report

3 Supporting Service Leavers in securing accommodation

15. The Department provides serving personnel and their families with low cost rental accommodation for the duration of their Armed Forces career. This support recognises the requirement on service personnel to change jobs and location frequently throughout their career. Nevertheless, many serving personnel choose to purchase a home to give their families increased stability or in preparation for when they leave the Armed Forces.[26]

16. The extent of home ownership within the Armed Forces is shown in Figure 2.[27] It varies noticeably between the different Services, in part because of the differing mobility requirements. For example, the Royal Navy has fewer bases in the United Kingdom than the Army and Royal Air Force and personnel often choose to base their families near one of these bases.[28] There is also a marked difference in the level of home ownership between the different ranks. The National Audit Office survey found that 89% of officers and 83% of senior ranks owned their own home prior to discharge, whereas only 25% of junior ranks did.[29] The Department told us that this disparity may partially be a reflection of age as junior ranks are younger when they leave the Services and may, therefore, be less inclined to seek to buy a home.[30]

Figure 2: Home ownership in the Armed Forces

Royal Navy and Marines
Army
Royal Air Force
All

Do you currently own your own home ?
Officer
Rating
Officer
Soldier
Officer
Airman
Officer
Other ranks

Home ownership (percentage) 84 70 67 30 72 44 73 45

Source: C&AG's Report

17. The Department, through the Joint Service Housing Advice Office, provides advice and regular briefings to Service Leavers and their partners on future housing options. The majority of Service Leavers who attended the briefings said they found them useful. The Joint Service Housing Advice Office also provides briefings and a monthly magazine on non-military housing issues for all serving personnel.[31] We asked the Department if this advice did not come too late and if Armed Forces' personnel should not be encouraged to consider buying a home earlier in their career. The Department told us that serving personnel are encouraged to attend the briefings but much advice came at the discretion of Commanding Officers. It is working to improve the consistency and performance of unit level advice.[32]

18. The Department has measures to promote home ownership for serving personnel in the Armed Forces. A long-established measure is the Long Service Advance of Pay which provides an interest free loan of £8,500 towards house purchase for personnel who have served over four years and intend to live in the house.[33] Currently 31,000 personnel are in receipt of the Long Service Advance of Pay, with a further 3,000 applying each year.[34]The Department has recently introduced a number of further initiatives to encourage home ownership. Figure 3 lists the other schemes in place and their take-up amongst Armed Forces personnel to date.[35]

19. In addition to the briefings in paragraph 17 above, the Department provides advice and support in finding suitable accommodation for single Service Leavers through the Singles Persons Accommodation Centre for the Ex-Services (SPACES). This was established in 2000 and is managed by the English Churches Housing Group at a cost to the Department of some £130,000 a year. The facility has helped some 3,500 people since its inception, although the National Audit Office survey revealed a lack of awareness of SPACES amongst single Service Leavers. Only 13% of single people who owned a home prior to discharge were aware of the services it provided.[36] The Department has acted to improve awareness of SPACES and promote access to its services but could not tell us the current level of awareness. Officers conducting the mandatory interviews with Early Service Leavers are now required to probe more deeply into the future accommodation plans of Leavers and to direct them where appropriate to SPACES.[37]

20. Under homelessness legislation in England and Wales, Scotland and Northern Ireland, local authorities must provide suitable accommodation for housing applicants who are eligible for assistance.[38] Those who qualify include people who are homeless through no fault of their own, have dependent children, and are vulnerable because of physical or mental health difficulties, including as a result of having served in the Armed Forces. The Department makes it clear to Service Leavers that very few of them are likely to be eligible for such assistance. Nonetheless, for those who are eligible, it is vital that such assistance is provided in a timely manner.[39]

Figure 3: Schemes to encourage home ownership within the Armed Forces

Scheme	Description	Start date	Take-up (No of personnel)
DCLG Homebuy Schemes, including New Build and Open Market Homebuy Restricted to those earning less than £60,000 a year	New Build Homebuy Purchasers can buy between 25% and 75% of a new build property on a leasehold basis, paying a mortgage on their share of the property and rent on the remainder. When the purchaser wishes to sell, the property is sold at market value and the benefits shared on the basis of the equity share. Open Market Homebuy Buyers can purchase a home on the open market through a combination of a mortgage and an equity loan repayable on the sale of the property or the final instalment of the mortgage. There are three options combining equity loans from Government and commercial lenders covering between 17.5% and 32.5% of the property value.	September 2006 as part of the Key Worker Living Programme which only applied to South East England Eligibility expanded to include Open Market Homebuy to all regions in December 2007	30
English Partnerships First Time Buyers Initiative	Purchasers must take out a mortgage for at least 50% of the property price. English Partnerships will contribute the remainder. After three years, buyers will pay a fee to English Partnerships of 1% of its contribution per annum, rising to 3% after five years. If the purchaser wishes to sell, the property is sold at market value and the shared owner benefits from any equity built up on the share they own.	September 2006 as part of the Key Worker Living Programme Eligibility expanded to include Open Market Homebuy to all regions in December 2007	5
Shared Equity Services	This is a commercial scheme. Shared Equity Services launched Forces Housing in 2006, combining a mortgage from a Bank (55%) with an equity loan from Shared Equity Services (45%). The scheme is temporarily not available to new applicants, as the company have stated that they are seeking a new financial backer.	June 2006	62

Source: Ev 21-22

21. Local authorities may also take account of whether the person applying for assistance has a local connection with their district. Under current legislation, serving personnel and anyone who normally lives with them do not establish a local connection while serving there in the Armed Forces. This can disadvantage any Service Leaver who wishes to reside in the area where they served and who is entitled to assistance from the local authority.[40] The Housing Regeneration Bill currently before Parliament should allow Armed Forces personnel to establish a local connection with the area in which they serve.[41]

22. Some local authorities consider that Service Leavers who move out of Service Family accommodation on their last day of service have made themselves intentionally homeless. In recognition of this, the Department allows Service Leavers to remain in their accommodation for a limited time to allow them to have their application for assistance considered. A few local authorities are delaying acceptance of any responsibility until the courts grant the Department an order for possession and the Service Leaver is 'evicted'. This results in increased costs for the Service Leavers, and also a period of unnecessary stress and anxiety.[42] The Department is working with the Department for Communities and Local Government to prevent this happening by tightening up the guidance which, even in its current form, makes it clear that local authorities should not wait for the Department to evict people before they engage with them.[43]

23. The Department is currently funding research into the extent of rough sleeping and homelessness among ex-Service personnel in London and the effectiveness of interventions to prevent this arising. The research currently estimates that 6% of the single homeless population (rough sleepers and hostel dwellers) in London have at some time in the past served in the Armed Forces. This is a significant reduction from the figure of 25% quoted by certain charities in 1999.[44] The Department believe homelessness amongst veterans is a small problem in relation to the total homelessness population in the United Kingdom, and that these people may well have been through many experiences since leaving the Armed Forces which may have lead them to become homeless.[45]

26 C&AG's Report, paras 3.3-3.4 Back

27 C&AG's Report, para 3.4; Figure 10 Back

28 Qq 123-124 Back

29 C&AG's Report, para 3.5 Back

30 Qq 15-18 Back

31 C&AG's Report, paras 3.10-3.12 Back

32 Qq 40; 125-126 Back

33 C&AG's Report, paras 3.6-3.9 Back

34 Q 41 Back

35 Ev 18 Back

36 C&AG's Report, paras 3.14-3.16 Back

37 Qq 42, 91-92; Ev 18 Back