Background
In 1996 the Ministry of Defence (MoD) sold much of its service family accommodation (SFA) estate to Annington Homes for a price of £1.7 billion. The MoD then leased the properties back, paying £230 million a year by 2024, while retaining maintenance and management responsibilities for the properties. The MoD’s stated aims of the sale were to more effectively dispose of properties it no longer needed and to improve the standard and management of accommodation through greater involvement of the private sector.
In 2018 we reported that, as a result of the 1996 deal, the MoD had lost out on billions of pounds in asset value and that it had not been properly carrying out its retained management and maintenance responsibilities for the estate. In December 2024, the MoD announced that it had agreed to repurchase over 36,000 SFA properties from Annington Homes at a cost of £6 billion. It said this deal would save the taxpayer billions of pounds in rent and allow it to undertake a major redevelopment of the estate.
Scope
This report will examine whether the MoD’s repurchase of its service family accommodation estate represented good value for money. The report will examine whether the MoD
- had a strong rationale for the repurchase
- followed good practice in preparing for and carrying out the repurchase
- achieved a good price for the estate
NAO team
Director: Helen Holden
Audit Manager: Hedley Ayres