New agency to run military housing in Ministry of Defense shake-up

Monday 03 November 2025 12:01
| Updated:

Sunday 02 November 2025 16:44

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Ministers are preparing to create a new quango to manage military housing after concluding that the Ministry of Defense is incapable of carrying out its duties.

The new Defense Housing Service, to be announced by Defense Secretary John Healey on Monday, will take over the management of the service’s accommodation after years of complaints about the poor quality of housing.

Healey said the new service would “deliver better value for taxpayers and deliver on our promise to provide decent homes for heroes”.

When formed, the company will be one of the largest providers of publicly owned housing in the country.

Sources said the Ministry of Defense (MoD) was “not very good” at operating the service’s accommodation itself, and would be better able to focus on its “core defense responsibilities” once housing was handed over to the new body.

Earlier this year, Prime Minister Sir Keir Starmer pledged to reduce the number of quangos (quasi-autonomous non-governmental organisations) to increase accountability and reduce red tape.

But defense sources said they were allowed to create new housing services because the Ministry of Defense was still a “net drain” quango, pointing to a “significant” consolidation of innovation agencies.

The creation of the new agency is part of a 10-year defense housing strategy, also launched on Monday, which will invest £9 billion in service accommodation and 100,000 homes built on excess Ministry of Defense land.

Healey said: “British troops and our veterans fulfill the best of public service. Our nation is proud of them. And the least they deserve is a decent home.

“This new strategy will take a ‘strengths first’ approach that tells our troops, our veterans and their families: we are on your side.”

The “strengths first” approach, announced at the Labor Party conference in September, would see military families given “first advantage” to buy new homes built on defense land.

The strategy would also upgrade or replace nearly all 47,700 military family homes, known as service family accommodation (SFA).

This follows a decision at the start of the year to return 36,000 homes in SFA to public ownership, which the Ministry of Defense says is saving taxpayers £600,000 a day.

The Ministry of Defense also promised to carry out an “immediate review” of single-living accommodation (SLA), which houses more than half of military personnel.

Healey described the strategy as “the biggest update of armed forces housing in more than 50 years”.

Military accommodation has been heavily criticized in recent years, with a Commons committee last year finding problems with maintenance and underinvestment meant two-thirds of SFA housing was “essentially no longer fit for purpose”.

Lawmakers also found about a third of SLA’s 133,000 spaces were not fit for purpose.

Complaints include persistent damp and mold problems, long delays in maintenance work, outdated facilities and furnishings, and poor communication from those responsible for operating the accommodation.

Poor accommodation has been cited as one of the reasons it is difficult for the military to retain personnel, with 40% of service members saying it makes them more likely to leave the armed forces.

By Christopher McKeon, PA Political Correspondent