Ministry of Defence accused of giving contradictory information to MPs over £8bn military homes legal battle

A company which owns more than 3,000 military homes in Yorkshire has won the first stage of a legal challenge attempting to block the Government from forcibly buying back the properties - as it accused the Ministry of Defence of providing contradictory information to MPs about its plans.

A judge has ruled Annington Homes can apply for a judicial review in the case, which relates to the future of more than 38,000 military properties across the country valued at about £8bn.

The Government originally sold off 55,000 properties in 1996 for £1.7bn in one of the nation’s largest-ever privatisation deals but a number of the leases have been returned since then.

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Annington says the Ministry of Defence and UK Government Investments are now seeking to forcibly buy back the remaining properties, where it still has responsibility for leasehold and maintenance agreements.

Thousands of military homes in Yorkshire are connected to the legal dispute.

The company argues the Government’s plans are unlawful.

Court papers released to The Yorkshire Post reveal lawyers for Annington, which is now partly owned by private equity firm Terra Firma, claimed evidence recently given to MPs by Ministry of Defence permanent secretary David Williams was “difficult to reconcile” with other Government announcements on its plans.

Mr Williams told the Public Accounts Committee in February that the MoD had made “no policy decision” on the issue.

Defence Procurement Minister Jeremy Quin had previously told Parliament in January the government would explore whether leasehold enfranchisement deals, designed for individual tenants to buy properties off their landlords, could be used to buy back the homes - initially through a test case purchase of two properties, in Lincolnshire.

The Annington claim for a judicial review said: “The Quin statement confirmed that the First Purported Notice forms part of a broader scheme, stating that it represents a “test case” in respect of the MOD’s intention to “explore the exercise of its statutory leasehold enfranchisement rights to buy out Annington’s interest in the homes and gain full ownership rights”. He went on to state: ‘MoD can confirm that the Department will explore the exercise of its statutory leasehold enfranchisement rights to buy out Annington’s interest in the homes and gain full ownership rights’.”

It added: “On 28 February 2022, in giving evidence to the Public Accounts Committee, Permanent Secretary at the MoD, David Williams, stated that the service of the Purported Notices was ‘an exploratory act...to understand the extent of [the MoD’s] rights around enfranchisement’ and that the MoD ‘had made no policy decision that [it] would progress to enfranchisement of the full Annington Homes estate’.

“The position taken before the Public Accounts Committee is difficult to reconcile with what was said in the Quin Statement, and the position taken in pre-action correspondence. It is clear from the Quin Statement, and the pre-action correspondence, that the context of the Purported Notices and the “test case” is the MoD’s intention potentially (if legally able to do so) to enfranchise all (or a significant part) of the Annington estate.

“The MoD has made no attempt to contact the claimants to advise them that the MoD is no longer pursuing the scheme, and has refused to provide an undertaking that it would not seek to enfranchise further properties. To the contrary, in its pre-action response dated 25 February 2022, the MoD took no issue with the claimants’ description of the Purported Notices as forming part of a scheme to effect a compulsory acquisition of Annington Property Limited’s interests through enfranchisement.”

The Ministry of Defence said it would not comment on ongoing legal proceedings.

Prior to the legal action beginning in March, Annington said it was offering a £105m fund to improve and modernise service personnel homes - which are maintained by the Government as part of the initial sale agreement - if legal action could be avoided.

At the same hearing where Mr Williams gave evidence, Tory MP Geoffrey Clifton-Brown showed pictures of extensive green mould in some of the properties and described the maintenance situation as an “utter disgrace”.

On May 9, Mr Justice Choudhury granted permission for Annington to apply for a judicial review and also refused an MoD request to restrict public access to court documents in the case.

A spokesperson for Annington said: "Annington confirms that the High Court of Justice (Administrative Court) has granted it permission to proceed with a Judicial Review application against the Ministry of Defence.

"The Judicial Review seeks to challenge on various grounds the legality of the MoD’s attempt to enfranchise certain properties which form part of the Married Quarters Estate leased to the MoD by the Annington group. Among other things, Annington seeks declarations that the MoD is acting outside its statutory powers and that purported notices issued by the MoD seeking to enfranchise certain properties be quashed as unlawful.

"The High Court has granted permission for the Judicial Review to proceed on all grounds and has also denied an application by the MoD to restrict access to court filings by non-parties to the proceedings.

"Annington’s application will now proceed to a full substantive hearing to be scheduled at a later date."

Ministry of Defence 'seeking value for money for taxpayers'

The Ministry of Defence said it would not comment on ongoing legal proceedings.

The Government has said previously its approach “offers a significant opportunity to deliver value for money for the taxpayer”.

Existing ownership arrangements on the military properties have cost taxpayers billions, Minister Jeremy Quin said in January. He highlighted that in 2018 the National Audit Office had concluded taxpayers were between £2.2bn and £4.2bn worse off as a result of the 1996 sale and leaseback arrangements.

He said the review of arrangements was part of the Government’s “obligations to secure value for money”.

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