THE privatised military “married quarters” housing is widely accepted to be of miserable quality, leaving service families in grim, damp, mouldy, sometimes vermin-infested properties. It’s a scandal referred to last week, but it’s worth more attention.

Looking closely, it’s remarkable how many “political insiders” are making money from the businesses behind the miserable houses. The whole affair shows that the politicians who like to talk about “patriotism” and “the importance of the armed forces” also seem happy to leave soldiers and their families to live in squalor.

In 1996, the then-Tory government sold all military “married quarters” houses to Annington Homes. The Ministry of Defence (MoD) then leases back the 38,000 homes to house military families. The houses are now known as service families accommodation, because servicemen and women can have families without being married.

The House of Commons public accounts committee described the deal as “disastrous for taxpayers.” The National Audit Office says the MoD lost up to £4.2 billion from the scheme, which leaves soldiers’ families in often grim conditions.

While Annington Homes was a key Tory privatisation, it is so bad that even the last Tory government finally lost faith in the scheme and launched legal action to take back the houses from Annington. In 2023, the government won its bid to take back the houses at the High Court, which described the sell-off as a “bad deal.”

Annington, which is ultimately controlled by financier Guy Hands and his Terra Firma group, is appealing against the High Court ruling. Annington is also trying to run a case in the European Court of Human Rights to stop moves to take the houses from them.

In the Annington deal, the MoD sold all its houses to rent them back. To make the deal even worse, the “maintenance and upgrading” of these houses “remains the responsibility” of the MoD.

Annington only has a limited responsibility for looking after the homes it bought from and now rents back to the MoD. Consequently, they are in grim condition. In 2023, then-shadow defence secretary John Healey commissioned a major report into armed forces accommodation, led by Lord Bob Kerslake.

The Kerslake Commission reported service families accommodation — mostly the Annington Homes — was “substandard, and in many cases unacceptable,” pointing to “long-standing problems in many places with insulation, damp and mould, heating and hot water, as well as with gas and electrical faults and pest infestations.” The commission said: “Thousands of service family accommodation homes are in need of urgent repair.”

Forcing soldiers, sailors and airmen to live in horrible houses with their families is a national disgrace — and when you look at the firms making money from this grim situation, they all have close relations with leading political figures.

First, Annington. The privatisation was planned by then-Tory defence secretary Michael Portillo under prime minister John Major. Financier Hands created Annington Homes — back then, he created the company for Japanese bank Nomura, which was the ultimate owner.

Hands own finance firm, Terra Firma, is now Annington’s owner: Annington is very much Hands company. Hands had good Conservative Party connections: William Hague, who sat alongside Portillo in John Major’s Cabinet in 1996 and went on to be Tory leader, was best man at Hands’ wedding.

Hands wasn’t fixed on only having Tory friends. In 2017, he hired Baroness Helen Liddell, a Labour lord and former energy minister under Tony Blair, as an Annington director. Baroness Liddell leads Annington’s fight to keep hold of the poor-quality military housing.

In February 2022, Liddell said Annington would spend £105 million to upgrade the houses. She admitted that “too many service families are forced to tolerate substandard living conditions” but claimed this was the MoD’s fault, not Annington’s.

However, she said the firm would only spend the money if the MoD dropped its court case. It refused, so Liddell withdrew the offer.
 
The political connections do not stop there. With Annington not maintaining the homes, the MoD has hired its own maintenance contractors. The residents of service families accommodation must contact Pinnacle’s “national service centre” to complain about central heating not working, broken electrics, leaks, mould, damp, and all the other, all-too-common problems.

Pinnacle will then inspect homes and organise the repair. The actual physical repair work is carried out by two other contractors, Amey and Vivo Defence Services (a consortium of Serco with a French-owned company called Equans).

Service families complain bitterly about all these companies, saying Pinnacle’s call centre doesn’t respond properly to inquiries and the Amey or Vivo contractors don’t repair them quickly enough.

These firms might not do a good job keeping military families in decent homes, but they are all quick to employ political insiders.

Claire Kober was the former Labour leader of Haringey Council. She lost her job after trying to outsource much of the London borough’s council housing to a “commercial vehicle.”

She now sits on the board of Pinnacle. Much of the press tried to claim Kober lost her job because of “sexist bullying” by leftwingers. They don’t like to talk about her new job with a firm letting down soldiers and their families over housing.

Amey, meanwhile, is part-owned by private equity firm Buckthorn Partners. Former Tory chancellor Phil Hammond and Lord Colin Moynihan, a Tory minister under Thatcher, are two of Buckthorn’s directors. Moynihan is also chair of Amey itself.

Meanwhile, Rupert Soames, grandson of Winston Churchill and brother of Tory Lord Nicholas Soames, was chief executive of Serco in 2021 when their joint venture, Vivo, won their £810m contract to maintain military houses.

Soames left Serco in 2023, and it doesn’t currently have a top politician on its board. For now, Serco has to make do with Dame Sue Owens, a former permanent secretary in the Department for Culture, Media and Sport, as its top political insider sitting on its board.

So, there are three striking features of the military homes scandal. First, the government doesn’t mind letting soldiers and their families live in horrible houses. Second, a lot of big corporations profit from the miserable houses. Third, they employ lots of political insiders.

Follow Solomon on X @SolHughesWriter.