Defence chiefs have bought back tens of thousands of military houses that were sold off to developers. The Ministry of Defence will pay £6billion for the properties, 28 years after they were traded in a move that was described by MPs as ‘disastrous’.
Defence Secretary John Healey unveiled the purchase yesterday, claiming it will pave the way for desperately needed repair work to be undertaken.
Mr Healey said: ‘In 1996 ministers conducted a fire sale of 56,000 defence homes for £1.7billion. Today ends one of the worst-ever government deals.
‘From day one it will save the public purse over £600,000 a day. It is also a once-in-a-generation opportunity to fix the long-term decline in military housing.
‘We are buying the houses, valued at over £10billion, for £6billion but, as the deal buys out liabilities the government has already accounted for, the public spending impact is £1.7billion.’
The houses were owned by a private fund, to which the MoD paid rent and minor maintenance costs.
Most were built before 1965, and are regarded as no longer fit for purpose. The MoD will buy back 36,347 homes. Developers sold off the other properties and banked the profits as house prices soared in recent decades.
Earlier this month, the Defence Secretary said Britain needs to be capable of ‘innovation at a wartime pace’.
John Healey during a visit to see military housing which is in disrepair, near RAF Northolt
The Ministry of Defence will buy back 36,347 homes from property firm Annington
The purchase reverses the 1996 privatisation process, where the houses were sold off to developers
John Healey admitted the UK’s Armed Forces need to be ‘better equipped’ and the country’s defence industry ‘better able to produce what they need’.
The new defence industrial strategy is being developed alongside the Labour Government’s strategic defence review.
During a visit to the Honourable Artillery Company to see drone technology, the Defence Secretary told journalists: ‘What we’re doing for the first time today is that approach, war gaming, but with industry figures.
‘And the reason behind this is that we need together – Government and industry – to be capable of innovation at a wartime pace.
Asked if Britain is ‘war ready’, Mr Healey said: ‘What I’m doing is recognising that our forces need to be better equipped.
‘Behind them needs to be an industry that is better able to produce what they need and innovate at the pace of wartime pressures.’