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Forces for good: local benefits from

surplus military land

white paper from the Bill Sargent Trust

April 2012

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Registered Charity No: 1042611

Background

The Bill Sargent Trust carries out research on housing and related issues. It seeks to

influence policy with the outcomes of the research. The Trust was established to

commemorate one of the founders of Portsmouth Housing Association, the late

Reverend Bill Sargent.

Previous research projects have covered:

The Impact of Welfare Reform and Public Spending Reductions on Low

Income Households in Hampshire

In the Public Interest ? Community Benefits from Ministry of Defence Land

Disposals

The role of Housing Associations in supporting their residents to find

employment and training

The Impact of Credit on the Financially Excluded.

Living in Temporary Accommodation in Portsmouth;

Hidden Deprivation in Southsea;

The Extent of Youth Homelessness in SE Hants;

Community Development on Rowner Estate Gosport;

The SE Hants Housing Market;

The Needs of Asylum Seekers in Portsmouth;

Financial Exclusion among Housing Association Tenants.

The Trust operates with close support from First Wessex Housing Association. The

Trustees are Mark Mitchell, Kirsty Rowlinson, Ben Stoneham and Nigel Baldwin,

Maria Mills, Dina Gojcovic.

The Trust welcomes proposals for local research projects on housing, homelessness,

poverty and related issues. The Trust is also grateful for financial contributions to its

funds.

For further information on BST events and copies of this and other reports please

go onto our website www.bstrust.org.uk , for more information contact the

Secretary:

Geoff Phillpotts,

The Bill Sargent Trust

Peninsular House

Wharf Road

Portsmouth

PO8 9HB

E-mail: geoff.phillpotts@firstwessex.org Tel: 023 9289 6793

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Forces for good: local benefits from surplus military land

A white paper for the Bill Sargent Trust

Julian Dobson, May 2012

FORCES FOR GOOD: LOCAL BENEFITS FROM SURPLUS MILITARY LAND .................................. 1

SUMMARY ............................................................................................................................................................ 2

INTRODUCTION.................................................................................................................................................... 4

THE ISSUE .............................................................................................................................................................................. 4

HOW THIS REPORT CAME ABOUT....................................................................................................................................... 5

PRINCIPLES FOR PRACTICE ................................................................................................................................................. 6

TWO CONTRASTING EXPERIENCES: LINCOLNSHIRE AND ALDERSHOT ............................................................ 8

FORMER RAF BASES, LINCOLNSHIRE ............................................................................................................................... 8

ALDERSHOT URBAN EXTENSION ....................................................................................................................................... 9

OPPORTUNITY AND RISK: THE CHANGING SHAPE OF THE ARMED FORCES .................................................. 11

LOCALISM: A NEW WAVE OF CITIZEN ACTION? ............................................................................................... 14

1 PLANNING REFORM ....................................................................................................................................................... 14

SITE SPOTLIGHT: HMS DAEDALUS ................................................................................................................................ 16

2 ASSET TRANSFER ........................................................................................................................................................... 17

SITE SPOTLIGHT: MACHRIHANISH AIRBASE ................................................................................................................. 18

3 HOUSING POLICY ............................................................................................................................................................ 19

SITE SPOTLIGHT: ERSKINE BARRACKS, WILTON ......................................................................................................... 21

A NEW MODEL: HOW THE ARMED FORCES COVENANT COULD BRING COMMUNITIES TOGETHER.............. 23

THE ARMED FORCES COVENANT ................................................................................................................................... 23

SITE SPOTLGHT: ROYAL HOSPITAL HASLAR ................................................................................................................ 24

LONG TERM VALUE ........................................................................................................................................... 26

SITE SPOTLIGHT: WHITEHILL BORDON ........................................................................................................................ 28

NEXT STEPS: STARTING TO GET IT RIGHT ....................................................................................................... 30

APPENDIX: SUMMARY OF POLICY ROUND TABLE DISCUSSION ................................................. 32

Summary of key issues

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Summary

The reorganisation and scaling back of Britain’s armed forces over the next decade will affect communities all over the UK. The size of the armed forces will fall by at least one tenth by 20201, and number of civilians employed to support them will drop by one third in the next five years. As a result large numbers of former military sites will become surplus to Ministry of Defence requirements. Many of these sites will be in areas that have strong social and economic ties with the armed forces. Communities will lose employment and business opportunities; but they will also have a rare chance to benefit from new uses of the sites that become available. These benefits could include new business and economic activities; affordable housing; services and facilities for ex-service personnel; the preservation of heritage assets or the creation of new public green spaces. But they will only be realised if the Ministry of Defence builds long term partnerships with local communities. Such partnerships depend on the Defence Infrastructure Organisation, which is responsible for the MOD’s land and property, being released from pressure to obtain the maximum cash receipts as quickly as possible when disposing of assets. A longer term understanding of value needs to inform its actions, with the wider public benefit overriding narrow departmental interests. We suggest four key principles should inform the wave of asset sales that is expected to take place from 2013: • Assets purchased or created with public funds should be disposed of in ways that maximise public benefit; • Public value should be interpreted broadly, using concepts such as ‘total economic value’; • Communities affected by disposals should be party to decision-making; • Long term visions should be developed for the future use of ex-military sites. This paper argues that the government’s localism agenda, including community asset ownership and neighbourhood planning, should be aligned with the disposal strategy in order to obtain the best outcomes for everyone, meeting the needs of local communities and the armed forces alike. In particular, site disposals should be managed to meet the needs of ex-forces personnel wherever possible, enabling them to play as active a part in civilian life as they have during their time in the forces. The recently established Armed Forces Covenant should provide a framework for long term partnerships to create shared benefits both for veterans and for local residents. Echoing the themes of the Bill Sargent Trust’s previous work on the future of MOD land, we conclude that: • Central government needs to take a long term approach to valuing public assets, weighing up the costs and benefits of future use as well as immediate receipts;

1 HM Government (2010). Securing Britain in an Age of Uncertainty: the Strategic Defence and Security

Review. London: The Stationery Office

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• There need to be better mechanisms to ensure cooperation between government departments; • We need effective ways of sharing good practice and building networks of communities affected by military land disposals; • We need to learn from international experience and apply that learning in the UK from the start of the next wave of MOD disposals. Government needs to seize the opportunity to develop partnerships with local communities at the start of the process of selling surplus assets. Such an approach could bring widespread benefits from the next wave of asset sales; failing to do so may lead to expensive mistakes, with the costs of short-term thinking borne by already stretched public resources.

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Introduction

Observers of government find it a constant source of bafflement that what appears to be common sense should tie the brightest and best officials and political leaders in knots. Getting government departments to work together to shared visions and objectives has eluded the problem-solving abilities of successive administrations. Managing the land owned and used by our armed forces is one such knotty problem. While it has escaped public attention, this issue already affects many communities across the UK and will impact on many more as the Ministry of Defence, beset by budget cuts and the need to radically reorganise its assets, seeks to dispose of land and buildings on an unprecedented scale. It might seem common sense that such disposals should be managed in ways that achieve the best outcomes for the armed forces, for national government, and for the localities directly affected. But experience so far shows that this is much easier said than done, and there are high risks that future disposals will be managed less well because of financial and time pressures. This is likely to have long term cost implications for local and national budgets, both in terms of missed opportunities and in additional costs to other parts of the public sector. This paper seeks to outline a better way of achieving outcomes that benefit everybody. It is being published in advance of a new wave of land sales in the hope that it will influence debate, highlight good practice and encourage commonsense solutions.

The issue

The Ministry of Defence owns nearly 1% of the UK’s landmass, and much of its property is already or will soon become surplus to defence requirements, following the Strategic Defence and Security Review of 2010. By summer 2012 the MOD will have made final decisions on the size of the armed forces needed in 2020; these are likely to involve greater reductions than the loss of 17,000 military and 25,000 civilian personnel announced in October 2010.2 By spring 2013 a programme of disposals will be identified as the military decides which sites are needed and which are supernumerary. Following this review, the land used by the reserve forces will be examined, and it is estimated that around one third of the 300 Territorial Army centres nationwide will be vacated. In the past the MOD has been able to raise significant sums by making surplus land available for development - a total of £3.4bn between 1998/99 and 2008/09.3 This has played an important part in funding front line troops and equipment. With a rising tide of land values and property prices until 2007/08, it has also been possible to fund community infrastructure, from affordable housing at Caterham Barracks to the

2 www.mod.gov.uk (2010) ‘Strategic Defence and Security Review published’. 19 October 2010

3 National Audit Office (2010). Ministry of Defence: A defence estate of the right size to meet operational

needs. London: The Stationery Office

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preservation of heritage buildings at Royal William Yard, Plymouth, and Gunwharf Quays, Portsmouth. This has largely been achieved by using some of the surplus created through the uplift in property values following development to pay for the restoration of heritage buildings or the provision of community facilities. Since the onset of recession in 2008 it has become much harder to realise such gains, both for the MOD and for local communities. The government’s deficit reduction strategy has spurred most public bodies into reassessing their requirements for land and buildings, creating a potential glut of unwanted property.

How this report came about

This report has been commissioned by the Bill Sargent Trust, a Portsmouth based research charity which for several years has been aware of the likely impacts of future defence land sales on communities in Hampshire and southeast England. Local knowledge of poorly-managed disposals, especially the piecemeal sale of the Rowner Estate in Gosport in the late 1980s and early 1990s, prompted the trust to investigate the issue further. In June 2010, shortly after the change of government, the trust published In the Public Interest?4 This report examined how community benefits could be achieved from the sale of military land in a post-recession environment, examining the models used in previous years and recommending changes to the valuation and disposal of public land. The term ‘community benefits’ was deliberately defined widely. Such benefits may include affordable housing, opportunities to develop new businesses and economic activities, public open space and wildlife habitats, education and training, the preservation of cultural and heritage assets and retaining facilities for community use (or providing new ones). The underlying premise of the report was that land owned by the state should be disposed of so as to maximise its social, economic and environmental value, rather than simply on the basis of the capital receipt obtainable. The report found that aspirations for community benefits were unlikely to be achieved without changes in the MOD’s approach to land disposals: At the heart of the problem is the way HM Treasury deals with surplus public land: government departments must obtain market value and are set targets for asset sales which help to balance their departmental budgets. So if the MOD fails to achieve the expected value for a piece of land, savings must be found elsewhere. This forces the MOD to equate public benefit with departmental benefit: the future use of the site takes second place to achieving the maximum receipt. It added: ‘...without a resolution of central government’s approach to disposals of publicly owned land, we are likely to see continued conflict between the short-term demands of the MOD and the long-term needs of communities. This conflict may result in long-term blight caused by neglect or inappropriate development...’

4 Dobson, J. (2010). In the public interest? Community benefits from Ministry of Defence land disposals.

Portsmouth: Bill Sargent Trust.

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The report recommended a new approach to valuing publicly owned land, with an emphasis on the likely long term value to be gained from the future use of assets rather than on the immediate cash receipt achievable. It called for better methods of ensuring cooperation between different government departments and local stakeholders; and more effective ways of sharing good practice so that communities affected or likely to be affected by defence land sales could learn from each other. Since the publication of that paper, there have been significant developments that could help to provide new opportunities to achieve social and economic benefits from the disposal of defence land: • The advent of neighbourhood planning should enable local residents to promote their own

development proposals; • The Localism Act provides a new legal approach to asset transfer; • The reorganisation of the armed forces will make new land and facilities available; • The formal recognition of the ‘military covenant’ provides the basis for new partnerships

between local communities and the armed forces This paper builds on the findings of the Bill Sargent Trust’s previous work and recommends a new approach to military land disposals that fits the current legislative and policy framework and could provide real opportunities for locally generated solutions to housing and economic challenges. An initial discussion document circulated in January 2012 set out the core proposals. Following a policy round table in March and further research, this white paper sets out an updated framework for achieving best public value from future disposals.

Principles for practice

We believe it is helpful to set out from the outset some principles for shared benefit and best value that should apply to future land disposals. While they might appear to be truisms, they are not universally acknowledged and are often overridden by short term considerations. The result is practice that often falls far short of any meaningful concept of ‘best’. At the very least, articulation of these principles should stimulate a debate about how, and how far, they should be applied. Without such a foundation, the risk is that decisions will be taken on the basis of immediate paybacks or short-term convenience, and that local communities will be left to bear the costs of mistakes.

1. Public costs should bring public benefits. Property bought, developed and maintained at public expense – as is the case with the vast majority of military assets – should be disposed of in ways that maximise public value.

2. Public value is not the same as cash value. The receipt achievable by the property owner and the way it is spent is only one part of the equation. Disposals should balance development opportunities, capital receipts, the preservation of cultural and heritage assets, and long term local benefits including social, environmental and economic factors.

3. ‘Nothing about us without us’. Those who live with the consequences of decisions should play a central role in making those decisions. The local authority is key, but so too are community organisations and businesses. Decisions should be taken at the

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most appropriate level to ensure maximum participation over a long period; local communities should be equal stakeholders in setting the vision and direction for a site, and have access to expert support in building their capacity to do so effectively; and disposals, wherever appropriate, should maximise local ownership of and access to assets.

4. Play the long game. The disposal and subsequent use of land has consequences that can continue for generations. Disposals should be managed in ways that set out a long term vision but are flexible enough to respond to changing economic, social and environmental conditions. Central government in particular should see itself as a partner in this process, not as the sole arbiter of value.

If there are exceptional reasons why these principles should not apply, they should be clearly explained by those responsible for decision-making, whether in the Ministry of Defence, the Treasury, or at local authority level. Too often this discussion of how best to achieve shared value simply does not take place. The result is that Treasury rules or short-term political objectives may be used as reasons for acting in ways that risk eroding public value instead of creating it. Our argument in this white paper is that shared value should become the default objective when disposing of public assets. Instead of seeing community benefits as optional extras, they need to be at the heart of the conversation when the future use of land or buildings is being discussed. Not only will this benefit local people: it is also more likely to create appreciating assets that enrich both localities and the nation. There have been the beginnings of moves within central government to adopt more far-sighted approaches, including the investigation of wellbeing as an indicator of economic value, and recent Green Book guidance by HM Treasury including the development of ‘total economic value’ models. However, as we discuss below, progress has been slow and such approaches have not yet permeated operational decision-making to any noticeable extent.

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Two contrasting experiences: Lincolnshire and Aldershot

Two very different experiences serve to illustrate how a poorly managed disposal process can lead to long term harm, while one that is well thought through can benefit military and civilian interests alike.

Former RAF bases, Lincolnshire

The Royal Air Force has in the last two decades disposed of several former air bases in Lincolnshire, largely in isolated rural areas with few local facilities. RAF Scampton, home of the Red Arrows, is likely to follow. While they were operating as military bases, the sites at Brookenby, Hemswell Cliff and Newtoft included community centres, shops and social clubs. The housing was occupied by the families of serving armed forces personnel. Following the decision to close the bases, the housing was sold, much of it to ex-service families. Other homes were sold to absentee landlords and increasingly used to house people who were unable to get housing elsewhere. On-site facilities were closed and sold piecemeal, without any assessment of how this would affect people living there. A letter written by a local resident, quoted at our policy round table in March 2012, told one family’s story: ‘In 2002 when my husband was a serving soldier we were desperate to get on the housing ladder. Annington Homes offered forces personnel to move in for £99, all fees paid for. Seemed too good to be true but we did it. We camped out for ten days and got our wonderful home with a thriving community centre with a youth club, coffee shop, doctors, police office, pre-school, hairdressers and a decent Spar shop right on our doorstep, all of which we needed since we’re 12 miles from any town. ‘As time went on our community centre was closed. Our Spar shop was closed… one by one all our services gone when the military left. Phase three of the sale of the remaining 48 MOD houses was sold as a job lot to absentee landlords who we’ve never seen, and who’ve never seen the properties.’ The woman went on to explain that homes had then been let to ‘problem families’, causing disruption at the local school; the grass was no longer cut; buildings still owned by the Ministry of Defence had fallen into disrepair and were being vandalised. ‘My husband once said it’s easier to do a tour of Afghanistan than live here,’ she wrote. Although local people wanted to buy the Spar shop, we heard that the Defence Infrastructure Organisation had refused to accept a local bid, quoting a fee of £150,000. It was sold to a private bidder and is now empty. Parents were withdrawing children from the local school because of increasing problems of intimidation and antisocial behaviour. Local authorities were spending millions of pounds trying to deal with the social problems resulting from the MOD’s abandonment of these communities.

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A report to West Lindsey District Council indicates the need for coordinated action to rectify the damage done as a result of the disposal process: ‘Past history has shown that a great deal of time and public money has been spent on some of these communities but it has been piecemeal, short-term and uncoordinated and, consequently, most of it has failed or, at best, has only had a brief impact.’5 A local community development charity, Community Lincs, has been working with residents to prevent further decline and bring new life into these villages. Using a process of Appreciative Inquiry, Community Lincs has identified the strengths and capabilities of local residents and is building on this process to bring local issues to the attention of policymakers and politicians. A key aspect of this approach is the recognition that despite the damage caused by ill-considered asset sales, local residents have not given up and, given sufficient support, are willing and able to address the difficulties they face.6 The Lincolnshire case study, like the case study of the Rowner estate in Gosport in our previous report, shows the long term costs that can result from poorly managed disposals.7 Rowner is now undergoing an eight-year, £145m regeneration scheme which involves more than £17m of public investment, a cost to the public purse that was never factored into the MOD’s calculations when it sold the site in the 1980s.8 In the case of many ex-MOD communities, the situation is further complicated because the housing was transferred in 1996 to Annington Homes, an independent landlord, which can sell unwanted housing without reference to the MOD or local authority. However, much of the property in many ex-MOD communities is still owned by the government, and the problems of neglect and sales to absentee landlords are not limited to Annington Homes.

Aldershot Urban Extension

Aldershot Urban Extension9 – now known as Wellesley – is one of the largest former military sites to be released for development. Just under 150 hectares of the 480-hectare Army barracks are to be developed as a residential suburb with two new primary schools and other community facilities. There has been a long process of planning and consultation, with an Enquiry by Design exercise in 2005 leading to the adoption of supplementary planning guidance by Rushmoor Borough Council in 2008. The Defence Infrastructure Organisation (and its predecessor, Defence Estates) has been a long term partner in the development process. Grainger plc has now been appointed to develop the site, which it has branded Wellesley, and conducted a consultation with local residents in autumn 2011. A new masterplan is being produced and planning applications are expected in mid-2012.

5 West Lindsey District Council (2011). Shaping the future for ex-MOD communities in West Lindsey:

progress so far and next steps. Report by Rachel North, director of strategy and regeneration, 1 September 2011. 6 Kipley, F. and Community Lincs. PhD research, currently in progress.

7 Dobson, J. (2010). Community benefits from Ministry of Defence land disposals: A literature review.

Portsmouth: Bill Sargent Trust 8 See www.rownerrenewal.com

9 See http://www.rushmoor.gov.uk/article/1458/Aldershot-Urban-Extension-AUE

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Wellesley is seen by Rushmoor and the Defence Infrastructure Organisation as a model of partnership and best practice. The local authority and DIO have already had a six-year working relationship, and the site will be released in a series of blocks, which means that the different partners will share both the risks and the profits. This long term arrangement means that while the DIO cannot be certain of its receipt, it accepts that more value is likely to be created through a partnership than through the unilateral sale of land to the highest bidder. The planning guidance is an important aspect of the development, setting out the local authority’s expectations of the developers. Another important factor is that the Army is not leaving Aldershot, even though it is giving up 150 hectares of land – it will continue to be an important local employer and landowner. The Hampshire Economic Military Partnership is looking to create an enterprise centre in or near the town, which will offer training and advice to service leavers and the wider community. A characteristic of the development is the creation of shared assets, such as the Aldershot Centre for Health, where the land was released by the DIO for £1 and there is now a new building with GP surgeries, military medical facilities and an outpatient unit for Frimley Park Hospital. Army sporting facilities in the town are also being shared with local communities. As one participant in our policy round table told us: ‘It’s not just about what you can give away when something’s disposed of, it’s about sharing assets you’ve both got and bringing them together. Once you start to do that you start to build different relationships.’

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Opportunity and risk: the changing shape of the armed forces

Britain’s armed forces are going through their most fundamental period of change since the end of the Cold War. At the same time, defence spending has come under extraordinary pressure as the government seeks to match its military commitments with radical cuts in public expenditure. The result is that the MOD is being forced to examine all its landholdings in order to maximise the use of its assets and realise what gains it can from the sale of surplus land. However, this exercise is being undertaken at a time when property values outside central London remain depressed and developers already have large land banks of sites where planning permission has been granted but work has not begun. These pressures will accelerate the process described in the 2010 report, In the Public Interest?. That report made the point that much MOD land is in areas that have been highly dependent economically on military activity, such as Aldershot and Whitehill Bordon in Hampshire. The release of land, which is set to escalate after 2013, creates an opportunity not only to meet housing need but also to reconfigure defence-dependent local economies. The MOD remains one of the UK’s largest landowners. Its estate is spread over 4,000 sites and covers some 230,000 hectares, plus another 205,000 hectares where there are military rights of access and use.10 This does not include land and buildings used by the Reserve Forces. The landholdings include more than 49,000 properties used as family accommodation, of which 6,000 are currently empty. The estate was valued at nearly £20bn in 2010, and costs £2.9bn a year to maintain.11 The 2006 report In Trust and On Trust set out a strategic goal of rationalising the estate to give fewer, larger sites, while smaller sites were to be sold.12 This was followed by the Defence Estates Development Plan 2009, which stressed the need to relocate away from southern England, stating that the department has a ‘disproportionately large presence there’.13 The Strategic Defence and Security Review14 published in October 2010 outlined two priorities: to protect the armed forces’ mission in Afghanistan, and to ‘make sure we emerge with a coherent defence capability in 2020’.15 But there was a third priority, which was to balance the books: in the 12 years since the previous defence review the MOD had accumulated a deficit of £38bn. In the next five years, the review revealed, the armed forces would lose 17,000 Army, Navy and RAF jobs, and 25,000 civilian posts. These cuts, however, turned out very quickly to be insufficient. The size of the ‘black hole’ in the MOD’s finances had been underestimated: the funding gap for 2010-2020 was closer to

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Ministry of Defence (2011). United Kingdom Defence Statistics 2011. London: DASA 11

National Audit Office (2010). Ministry of Defence: A defence estate of the right size to meet operational needs. London: The Stationery Office 12

Ministry of Defence (2006). In Trust and On Trust: The Defence Estate Strategy 2006. London: Ministry of Defence 13

Defence Estates (2009). The Defence Estates Development Plan 2009. London: Ministry of Defence. 14

HM Government (2010). Securing Britain in an Age of Uncertainty: the Strategic Defence and Security Review. London: The Stationery Office 15

www.mod.gov.uk (2010) ‘Strategic Defence and Security Review published’. 19 October 2010

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£74bn.16 A further wave of cuts was announced in July 2011, along with plans to rationalise the armed forces’ bases. The 20,000 service personnel based in Germany will return to the UK, and the regular Army will be centred on five ‘multi-role brigades’, based in Salisbury Plain, Catterick, Kirknewton near Edinburgh and Cottesmore in Rutland. These contractions will have a drastic impact on the MOD’s landholdings. A much smaller military sector will require far less property for accommodation, training and upkeep of equipment. The full scale of these reductions is likely to be known in early 2013. Following the SDSR, in April 2011 Defence Estates was merged into a new Defence Infrastructure Organisation. As part of this process 2,500 jobs are being lost. The aim is to improve efficiency and reduce costs, in the light of the recognition that the savings envisaged within the SDSR are only the beginning. However, the loss of professional staff will also affect the DIO’s capacity to devise solutions for sites that are complex or where the market is weak. In evidence to the Commons defence select committee in July 2011, former defence secretary Liam Fox undertook to assess the whole of the defence estate across the UK.17 This process, announced shortly before the summer recess, is likely to mean that only sites already earmarked for disposal will be sold in the immediate future, but that many more are likely to be declared surplus once the review is complete. On 5 October 2011 the DIO published its interim strategy for land disposal.18 This document spelled out three key objectives: • being transparent about landholdings and disposal principles and selling land in accordance with Treasury guidelines; • not holding land longer than necessary; • carrying out disposals on terms that both achieve value for money in disposal receipts and generally promote development, economic activity and growth. While the overriding principle behind the MOD’s approach to its land assets remains unchanged since our report of 2010 - ‘to get the best price reasonably obtainable’ - the land disposal strategy suggests a more flexible approach may be considered than in the past. Alongside value for money and the need to hold land required for military purposes, there is explicit reference to the value of using land to promote economic development and regeneration. The document states that disposal of land will be done ‘as swiftly as the market will allow’ and normally through open competition, unless it is required by other publicly funded bodies such as the Homes and Communities Agency, local authorities or registered social landlords. This offers the prospect of local councils or social landlords acting on behalf of smaller voluntary and community organisations to identify and acquire land for community benefit. The DIO will ‘seek market value according to the planning situation’, suggesting local planning considerations may take precedence. However, local authorities (or neighbourhood planning

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Chalmers, M. (2011). Looking Into the Black Hole: Is the UK defence budget crisis really over? London: Royal United Services Institute. 17

House of Commons Defence Committee (2011). The Strategic Defence and Security Review and the National Security Strategy: Sixth report of session 2010-12. London: The Stationery Office. 18

Defence Infrastructure Organisation (2011). Defence Infrastructure Interim Land and Property Disposal Strategy. London: Ministry of Defence

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forums) will almost certainly need to be proactive in setting out their aspirations for defence sites in advance of the disposal process. The strategy adds: ‘The DIO’s approach to future land use will be determined by local planning policies and the draft National Planning Policy Framework … with its strong presumption in favour of sustainable development. DIO will work with local planning authorities to help identify MOD sites capable of supporting future housing growth, making best use of previously developed land.’ The result, if the strategy is followed, should be a closer relationship between defence and the Department for Communities and Local Government and the Homes and Communities Agency than in the past. Only one paragraph in the strategy deals with economic development and regeneration. It acknowledges that the closure of MOD bases can have a detrimental impact on host communities, adding: ‘...apart from providing land with the capacity for much needed housing, the re-use of former MOD sites can often provide new and exciting opportunities for economic development and regeneration. DIO will work closely with interested parties to seek the best possible future for the site.’ While this statement is brief, it is important. The clear recognition that economic development and regeneration should be balanced against the need to maximise capital receipts should open the door to more constructive negotiations about the future use of land that may be of community value. The onus, however, will be on local communities to identify land that can be reused and put forward ideas for future uses. Given the reduction of staffing within the DIO, the organisation may struggle to incubate new ideas for the use of its assets. This underlines the need for a partnership approach, with more effective cooperation between defence and local interests than has been seen in the past.

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Localism: a new wave of citizen action?

On 18 November 2011 the Localism Act became law. Hailing the passing of nearly 500 pages of legislation and accompanying schedules, secretary of state for communities and local government Eric Pickles declared: ‘Today marks the beginning of an historic shift of power from Whitehall to every community to take back control of their lives.’ The mantra of the Coalition government since 2010 has been to devolve power to the people. New laws have established community rights to buy assets of public value and created the opportunity for local residents to become involved in neighbourhood planning. Public land and empty housing is to be handed over for development or repair. Some of these changes have already come into effect, including neighbourhood planning, the ‘community right to build’, and a ‘general power of competence’ allowing local authorities to do anything that is not prohibited by law. Three key areas of reform under the banner of localism could help local communities unlock the potential of surplus military land. These subjects are interlinked and overlap with each other, but for the sake of clarity are discussed separately.

1 Planning reform

A raft of planning reforms is being pursued by the current government. Especially important are the introduction of neighbourhood planning and the National Planning Policy Framework,19 which aims to simplify the planning process with a presumption in favour of sustainable development. The draft National Planning Policy Framework (NPPF) was published in July 2011 and the final version in March 2012. This framework reduces the hundreds of pages of planning advice and guidance from central government into a brief document intended to encourage flexibility and a planning culture of enabling development rather than enforcing standards. While the national framework has been criticised for tipping the balance in favour of the volume housebuilders and ‘big four’ supermarkets, its advocates argue that it will kickstart a housing and development market that has been bottlenecked by bureaucracy. At the same time the previous government’s approach to planning, which was based on detailed guidance on a host of matters, from heritage to mineral extraction, under the umbrella of regional spatial strategies, has been jettisoned. The government argues that incentives such as the ‘new homes bonus’, which rewards local authorities for approving development, will be more effective in encouraging housebuilding. ‘Sustainable’ is defined in the NPPF according to the Brundtland Commission’s dictum of meeting the needs of the present without compromising the ability of future generations to meet their own needs.

19

Department for Communities and Local Government (2012). National Planning Policy Framework. London: DCLG.

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The framework, which will guide all local planning in England, stresses several principles that informed previous planning guidance, including the use of previously-developed land, the importance of town centres, and the conservation of heritage assets and locally important green spaces. This strengthens the language of last year’s draft, specifically referring to the five principles set out in Securing the Future:20 • Living within environmental limits • Ensuring a strong, healthy and just society • Achieving a sustainable economy • Promoting good governance • Using sound science responsibly What the framework does not make clear is the emphasis within Securing the Future that all the principles need to be met, not just one or two of them. Critics of the new framework continue to fear that planning decisions will overwhelmingly be taken on relatively narrow economic grounds. The risk that a lowest-common-denominator approach will prevail remains, with a mentality of ‘development at all costs’ squeezing out considerations of sustainability, local economic development and community benefit. The government’s proposal to retrospectively remove planning obligations agreed under section 106 of the Town and Country Planning Act 1990 where developments have stalled raises questions about the value of such agreements in future. In the absence of clear guidance and with increasing pressure on local authorities to accept development they may not want, it is more important than ever that Local Plans are robust and reflect a process of strong community involvement, and that local authority planners receive the political and executive support they need to act as champions of their localities. Neighbourhood planning may also offer a safeguard. The principle behind neighbourhood planning is that decisions are best taken by the people closest to a proposed development. But while it enables local groups or organisations to influence and encourage development, it deliberately avoids creating tools that enable residents to oppose or frustrate development. Neighbourhood plans must be developed in accordance with the local authority’s Local Plan for the area. If approved in a local referendum, a neighbourhood plan must be adopted by the authority. Plans can specify certain types of approved development which will then receive automatic planning permission via a Neighbourhood Development Order. Plans can be drawn up by parish or town councils, or by neighbourhood planning forums set up for the purpose. A forum must consist of at least 21 people and must be broadly representative of the local community, including local businesses where relevant. A forum is required to set a vision for the locality and can draw up guidelines to steer future development. While the guidelines must be in line with district-wide priorities, they cannot be overturned at a higher level. A series of ‘frontrunners’ for neighbourhood planning were announced in April and August 2011, with a total of 126 areas piloting the scheme by the time the Localism Act was passed. There may be an opportunity here for communities affected by the disposal of surplus MOD land, or that have already been impacted by previous sales of land and assets to third parties. Particularly where land is vacant and awaiting development, a neighbourhood forum can set a

20

HM Government (2005) Securing the Future: delivering UK sustainable development strategy. London: The Stationery Office.

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vision for the area that must then be considered by the local authority when land is sold, and by new owners when managing and developing it. This assumes, of course, the existence of a community with an interest in the development of the area. Where there are few existing residents it may be harder to influence disposal decisions, although even in remote areas it may be possible to steer future development via parish councils. One potentially important aspect of the planning reforms is the introduction of a ‘duty to cooperate’ between neighbouring local authorities and other public bodies. This is particularly significant when large or strategically important sites are released. The duty will require the Defence Infrastructure Organisation to work closely with local planners to ensure the acceptability of disposal plans, and could help to avoid some of the complaints of poor communication that have been levelled at the MOD in the past.

Site spotlight: HMS Daedalus

The former Daedalus naval air base at Lee-on-the-Solent, Gosport, is a major site that has been awaiting reuse for well over a decade. The 80-hectare airfield, considered the best-preserved example of a seaplane base in the UK, was closed by the MOD in 1996 and was transferred to the South East England Development Agency (SEEDA) ten years later after being declared surplus to requirements. A series of consultations and masterplanning activities was then conducted by SEEDA in partnership with Groundwork Solent. Local residents highlighted employment and green space as particular concerns. Following the Coalition Government’s decision to abolish regional development agencies, the new Solent Local Enterprise Partnership nominated Daedalus as an enterprise zone. The zone was approved by ministers in August 2011. Enterprise zone status is intended to accelerate development at Daedalus, and the LEP claims 600 new jobs will be created by 2015. Companies moving to the zone are given a range of incentives, including zero business rates for five years (up to a limit of £275,000) and high-speed broadband. Planning processes will be ‘radically simplified’. The new enterprise zone intends to focus on advanced manufacturing, with particular emphasis on marine and aviation industries, replacing some of the low quality industries such as storage currently on site. Daedalus illustrates the considerable public investment needed to regenerate major military sites – investment that can more than offset the receipt to the military. Since the closure of the naval base public subsidy has been required in one form or another for well over a decade, and will continue for at least another five years in the form of business rate exemption and investment by the LEP. The disrepair of many of the buildings is a further drain on public resources, with substantial remediation of listed buildings and investment in infrastructure still required.

19

2 Asset transfer

The value of transferring surplus or under-used public assets to community and voluntary organisations has been accepted by all political parties since the publication of the Quirk Review in 2007.21 This follows consistent lobbying by the former Development Trusts Association (now Locality) and others, who have argued that community-owned buildings or infrastructure such as renewable energy installations create income streams (from hiring out meeting rooms and business space, for example) and collateral against which organisations can raise loans to develop services. Community assets have a long and varied history in the UK, from the early cooperative movement to mutually-owned building societies and insurance companies.22 In recent years they have been promoted as a means of financing community development, local service provision and training for unemployed or disadvantaged people. The agenda of community ownership has been particularly strong in Scotland, where large estates have historically been held by absentee landlords and the land rights movement stretches back for well over a century. But while Gladstone sent a gunboat to the Isle of Skye in 1883 to curb the protests of the Glendale Land Leaguers, more recently the devolved Scottish Government has led the way in promoting a ‘community right to buy’. Since 2004 there has been a legal right for community organisations to bid for land and assets earmarked for disposal, although only a handful of transfers of ownership to community groups have now taken place under the legislation.23 Examples of community ownership include the island of Gigha, where local housing has been improved, new homes built and the community now generates its own renewable energy; and a former bank in Neilston, East Renfrewshire, which is now being converted for community uses. A version of the community right to buy has now become law in England. While it has less clout than the Scottish legislation, it establishes the principle that local residents can nominate assets of community value and delay a sale or disposal while they put together proposals for their future use. This gives them a breathing space to raise funds to buy the asset when it comes on the market, although the legislation makes no provision for taking social value into account when the sale price is negotiated. Unlike the Scottish legislation, the Localism Act does not give community organisations in England a right of first refusal. Assets can be considered as being of community value if their current or recent use has been to ‘further the social wellbeing and interests of the local community’.24 ‘Operational land’ as defined in Part 11 of the Town and Country Planning Act (such as highways) is excluded from the legislation. In practice, there is likely to be limited scope for applying the community right to buy to military property, and these limits may well be established on a case by case basis.

21

Department for Communities and Local Government (2007). Making Assets Work: The Quirk Review. [online] http://www.communities.gov.uk/publications/communities/makingassetswork 22

See http://www.jrf.org.uk/events/community-assets-seminar-series for reports and background papers on community assets. 23

Holmes, H. (2010). Providing opportunities for rural communities in Scotland: the community right to buy policy in Scotland. York: Joseph Rowntree Foundation. 24

DCLG (2011). Assets of Community Value: policy statement. London: DCLG.

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While legislation has proved something of a blunt instrument in Scotland, it has created a climate in which transfers to community ownership are becoming part of the culture. In England, the rate of asset transfers has accelerated in advance of legislation as public bodies - local authorities in particular - seek to dispose of surplus land and buildings. There has been strong criticism from some quarters that communities are often being handed liabilities rather than assets, and having to cover costs that would previously have been spread across a much wider base of local taxpayers. However, there are also striking examples of neglected buildings being brought back into use. Hebden Bridge Town Hall in West Yorkshire, for example, had been surplus to Calderdale Council’s requirements for many years before being taken over by Hebden Bridge Community Association, which now plans to use the building for community and civic functions, arts events and start-up business space. The government-funded Asset Transfer Unit has now helped organisations in more than two-thirds of English local authorities with advice, information and expertise and is heavily involved in work to convert many libraries to community ownership. A recent evaluation of the Unit’s work suggested more than 1,000 transfers are now in progress.25 Parks, community centres, village halls and even castles and piers are being taken over by community organisations. This suggests there is plenty of scope for transfers outside the provisions of legislation, given a willing seller and local enthusiasm to take over an asset. The Department for Communities and Local Government suggests a ‘right of first offer’ may apply in such cases, where an owner agrees to sell to a community organisation before placing the property on the open market. In such circumstances there may be scope to negotiate with the Defence Infrastrructure Organisation the transfer of assets at less than book value, if it can be demonstrated that greater value will be created (and MOD liabilities reduced) through an alternative disposal route that can quickly bring an asset into community use. The transfer of military assets to communities is relatively uncharted territory in the UK. The main current example is the plan to transfer the Machrihanish air base on the Kintyre peninsula in Scotland to a community association [see below]. However, because this is being done under Scottish legislation it is not likely to be replicable outside Scotland. Important lessons may be learned, however, about the practicalities of negotiating asset transfers that may be applicable elsewhere.

Site spotlight: Machrihanish Airbase

Machrihanish Airbase, on the Kintyre peninsula in Scotland, is one of the largest airfields in Europe. A former base for the US Navy, it was returned to the MOD in 1995, and in 2009 the MOD announced it was selling the 415-hectare site. As well as being used by the military, one end of the airbase is also used for civilian flights between Kintyre and Glasgow, and for business activities including a wind turbine factory.

25

SQW (2011). Final Evaluation of the Asset Transfer Unit. Car Parks and Castles: giving communities the keys. [online] http://www.atu.org.uk/Document.ashx?ID=321

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Since 2008 local residents have been campaigning to take over the airfield for community use, in the hope that it would bring employment and trade to the isolated Kintyre community and provide revenue to support local services and activities. The airfield is close to the island of Gigha, which was taken over by its residents in 2002. The Machrihanish buyout is being undertaken under the right-to-buy provisions of the Land Reform (Scotland) Act 2003. While the buyout process is only relevant in Scotland, the story so far illustrates some of the practicalities of transferring former MOD assets to community use. The airfield was valued at £1 in recognition of the degree of remedial work required. After a first vote in favour of a community buyout, in May 2010, was rejected by the Scottish Government, a second vote was held in December 2010 and approved in January 2011. Both votes were overwhelmingly in favour of the proposals developed by Machrihanish Airbase Community Company (MACC). The community company says its ideas for sustainable development offer an alternative to the boom-and-bust economics that have adversely affected South Kintyre, and it hopes to maximise the good air, road and sea links of the peninsula to bring in new investment. However, the site needs extensive upgrading, including the renewing of its water supply, drainage and electrical infrastructure. In other countries such as the US, sites in such condition have been handed over with a ‘dowry’ to cover the costs of essential upgrading. Since January 2011 there have been a succession of meetings with officials, funding agencies, the MOD and solicitors to try to progress the plans. While the meetings have been constructive, dealing with issues such as improving the infrastructure and utilities has been complicated and time-consuming. These issues will need to be resolved before a sale agreement can be reached.

3 Housing policy

UK government housing policy for the last 30 years has sought to encourage private home ownership. While this broad thrust has remained unchanged despite the stagnation of the property market and the collapse of credit, there are signs of a more flexible approach and a readiness to consider new ways of meeting housing need. The Department for Communities and Local Government’s housing strategy, published in November 2011, makes it clear that housing has a key role in the economy, providing jobs and training as well as homes.26

It emphasises the need to incentivise housebuilding, with plans to underwrite 95% mortgages for first-time buyers and to make public land available for construction on a ‘build now, pay later’ basis. There is particular support for bringing empty homes back into use, with a £150m fund to convert empty property, and backing for self-build approaches (now styled ‘custom homes’), citing the example of Almere in the Netherlands, where a 100-hectare zone has been made available to self-builders.

26

HM Government (2011). Laying the Foundations: a housing strategy for England. London: DCLG

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The approach to public land is particularly interesting for communities likely to be affected by the disposal of MOD sites. The usual Treasury objective of achieving maximum capital receipts has been significantly qualified by the emphasis on making land available at an early stage for development, with payment deferred until after building has taken place. The ‘build now, pay later’ approach aims to make land available for an additional 100,000 homes that might not otherwise have been built because of difficulties in accessing finance. The government estimates that 40 per cent of all previously used land suitable for development is owned by the public sector, and is keen to speed up its release. The Defence Infrastructure Organisation’s disposal strategy is intended to complement this programme, which began with a similar strategy published in June by the Homes and Communities Agency. There are some caveats: there has to be market demand, the proposals have to represent value for money and they have to be affordable, though affordability is not defined. But there are also moves to speed up the release of more complex sites, and ministers have appointed a group of experts led by Tony Pidgley, chairman of the Berkeley Group, to advise on these issues. The Government Property Unit will support the ‘build now, pay later’ approach by releasing updated information about public sector landholdings across England. ‘This will enable communities and developers to identify development opportunities and challenge landholders to bring derelict land and property back into productive use,’ the housing strategy comments. In addition to the ‘build now, pay later’ policy, the strategy emphasises the community right to reclaim land, first announced in February 2011 by housing minister Grant Shapps. This ‘right’ is an important development of the existing Public Request to Order Disposal (PROD), which applies when a public body is holding onto land and property assets that could have an alternative public or community use. Mr Shapps pledged to introduce a ‘one-stop shop [which] will provide citizens with information about empty land and buildings they can develop to improve their local area’. The Homes and Communities Agency will now publish regular lists of the land it owns and manages.27

The reformed PROD mechanism creates a potentially powerful method for citizens to bring under-used property back into use by triggering an order that the owner should dispose of it. The scheme covers a range of public bodies set out in Schedule 16 to Part X of the Local Government, Planning and Land Act 1980. These include all local authorities and a handful of quangos, but not central government departments. Where a public body is not included in Schedule 16, DCLG intends to sign a memorandum of understanding enabling its land to be treated in a similar manner. If the secretary of state for communities and local government considers that evidence supports a request, he can serve a disposal notice on the owner (or, in the case of bodies not covered by Schedule 16, write a letter recommending disposal). Extending the community right to reclaim land to MOD property may be problematic legally, particularly given that significant areas of MOD land are affected by the Crichel Down rules,

27

See http://www.homesandcommunities.co.uk/land-and-property-assets

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which require that land acquired by compulsion must first be offered back to the former owners or their successors. The DIO disposal strategy notes: ‘MOD should also be afforded an exemption in certain circumstances (e.g. on grounds of national security, operational land, training areas, Service Families Accommodation and other residential property etc.).’ However, a qualified right to reclaim or a strong memorandum of understanding between DCLG and MOD could provide a basis for accelerating the transfer of land that no longer has any military use, advancing both the MOD’s objective of estate rationalisation and the localism agenda of DCLG. There are a number of potential pitfalls in the housing strategy. It suggests, for example, that s106 ‘planning gain’ agreements could be retrospectively renegotiated where development has not yet begun. This could make it difficult to secure the kind of local benefits and environmental and heritage protection agreed in the masterplanning of developments such as the Aldershot Urban Extension. It could present developers with a trump card, allowing them to claim they cannot adhere to existing agreements because of market conditions. Despite the housing strategy’s emphasis on the economic role of building, there is little attempt to integrate housing fully with economic development. It is unclear, for example, how ‘build now, pay later’ or the community right to reclaim land would apply in the case of mixed-use or industrial developments, or where assets are being converted to new uses. These issues will need to be clarified as work to implement the housing strategy proceeds.

Site spotlight: Erskine Barracks, Wilton

Erskine Barracks in Wilton, Wiltshire, is the former UK Land Forces headquarters. It became vacant in March 2011 when the HQ moved to Andover. There are two alternative proposals for the site. The MOD has sought outline planning permission for a housing estate of 450 homes; a local residents’ group wants to create an ‘eco-park’ on the site, showcasing environmental technologies and providing affordable housing, owned and run by a community land trust. The Defence Infrastructure Organisation wants the 13.5 hectare site developed quickly as it sees it as an area where there is demand for housing, and it argues that its plans comply with existing planning guidance. In contrast, the Wilton Eco-Park Development Community Association claims the plans are a missed opportunity to provide new activities that benefit local people. The community association’s plans include 300 affordable homes alongside 50 homes for sale; new offices and industrial units; and 25 converted buildings showcasing green technologies. The community association is working with Our Enterprise, the company that has bought the Royal Hospital Haslar (see page 24), and intends to set up a community land trust to provide affordable housing for local people. The success of the community association’s proposal is likely to depend on its ability to obtain the backing of Wiltshire Council. There is currently a three-way debate between the DIO’s plans, those of the community association and the local authority’s desire for more employment uses on the site. The fear among the eco-park’s backers is that as a non-statutory

24

body they risk being excluded from negotiations, despite significant local interest in their proposals.

25

A new model: how the Armed Forces Covenant could bring communities together

For many years there has been concern that on leaving the forces, ex-service personnel can face difficulties in adjusting to civilian life. Some may suffer mental health problems as a result of their time in the forces, and many experience homelessness. A survey by the Howard League for Penal Reform found that around 3,000 former members of the armed forces end up in prison.28 While the incidence is slightly lower than among the civilian population, the offences for which they are jailed are often more serious. The study points out that while for many, life in the armed forces significantly improves a person’s life chances, there are some who struggle to manage the transition to civilian life: ‘Leaving the Services is unlike simply changing jobs; it is a wholesale life change in which the Service leaver discards more than just employment. He also relinquishes his accommodation and the camaraderie of Services life. He undergoes a radical change in lifestyle. He enters civilian life having to discard the familiar trappings of the Services including the relationship between different ranks and the discipline of an organised and relatively institutionalised existence.’ Failure to manage this transition can lead to drug or alcohol problems, poor health, petty crime or homelessness. Prison may be the last stage of this journey. While it is important to note that prisoners who have not served in the forces are as likely to have experienced such problems, there is strong political and public concern that this should not be the fate of people who have served their country in the armed forces.

The Armed Forces Covenant

In recent years the idea of the ‘military covenant’ between the citizens of the UK and its armed forces has gained momentum, with a strong campaign by the Royal British Legion. In July 2010 the prime minister established an Armed Forces Covenant Task Force, led by Professor Hew Strachan, to examine how the bonds between the armed forces and society could be strengthened. The task force recommended an ‘Armed Forces Community Covenant’, based on a US scheme in which local municipalities, businesses and voluntary organisations pledge their support to the military community in their area. In particular, this would strengthen the links between public services such as health and education and the local military.29

Among the recommendations were better use of the MOD estate to provide ‘mixed economy housing which would include priority for Service personnel’, improved access to home ownership and financial services, and a ‘veterans’ privilege card’ providing discounted goods and services.

28

The Howard League for Penal Reform (2011). Report of the Inquiry into Former Armed Service Personnel in Prison. London: The Howard League for Penal Reform. 29

Ministry of Defence (2011). The Government’s Response to the Report of the Task Force on the Military Covenant. London: MOD

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The Armed Forces Covenant has now been enshrined in law for the first time, with the passing of the Armed Forces Act in November 2011.30 Local covenants have been signed in several areas, including Oxfordshire, Hampshire and Portsmouth, stressing the importance of the links between the military and local communities. The legislation requires an annual report to Parliament setting out how the government is supporting the armed forces, their families and veterans through public services such as housing, health and education. The Covenant states: ‘...the whole nation has a moral obligation to the members of the Naval Service, the Army and the Royal Air Force, together with their families. They deserve our respect and support, and fair treatment. Those who serve in the Armed Forces, whether Regular or Reserve, those who have served in the past, and their families, should face no disadvantage compared to other citizens in the provision of public and commercial services. Special consideration is appropriate in some cases, especially for those who have given most such as the injured and the bereaved.’ When leaving the services, armed forces personnel should have the same access to housing and employment and the same opportunities to take part in civilian society as other members of the public, and where appropriate receive special treatment. Some of the measures already agreed include plans to improve mental healthcare for service and ex-service personnel, university scholarships for the children of bereaved armed forces families, and help for former members of the forces in accessing further and higher education. Ex-forces personnel will also get additional help in accessing social housing. The Armed Forces Covenant seeks to strengthen the ties between the forces and the wider community, especially in areas that host defence activities. To turn the idea into practice, the government has created a £30m ‘community covenant grant scheme’ over four years to encourage local activities that build bridges between the military and civilian population. The first projects funded by the grant were announced on 1 November 2011, and included a new Scout and Guide headquarters in Bedale, North Yorkshire; an office for a community link project in Aldershot; activity days at military bases in Oxfordshire; and a £7,000 scheme to prevent social exclusion among ex-service families in Wiltshire. While the thinking behind the Armed Forces Covenant has not yet been applied to land disposals, it could provide an important framework for considering the future use of surplus assets. Former military buildings could be reused to provide housing or business premises for ex-service personnel and their families; some of the proceeds of land sales could be channelled into initiatives such as community land trusts, which could provide affordable homes for ex-service personnel as well as for the local population; and community initiatives involving ex-service personnel could be given help and support in bidding for surplus property.

Site spotlght: Royal Hospital Haslar

The Royal Hospital Haslar, in Gosport, was earmarked for sale in the late 1990s. Local councillors led a campaign to keep the hospital as a centre of healthcare.

30

Ministry of Defence (2011). The Armed Forces Covenant. London: MOD.

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The site was sold for £3m in November 2009 to Our Enterprise, the social enterprise consultancy currently advising the Wilton Eco Park Development Community Association (page 21). Our Enterprise is working with Harcourt, developers of major projects including Belfast’s Titanic Quarter. Our Enterprise has promised to create a 'veterans’ village' for ex-servicemen and women, working with employment agency Tomorrow’s People. A company, Our Enterprise Haslar Ltd, has been formed to oversee the development. Director Matthew Bell has promised that Haslar will be an ‘exemplar’ project, with ‘a continuing care community for our veterans and ex-forces personnel, a strong community healthcare hub, a student quarter for postgraduates and a host of cultural, heritage and arts facilities’. Since the sale various meetings have been held with the local authority, English Heritage and others to discuss the plans and the interim upkeep of the site, but no planning application has yet been submitted. The local authority has been frustrated by the apparent lack of progress, but the terms of the sale do not enable it to be party to discussions. The future of Haslar is currently uncertain, with growing concerns over the apparent lack of accountability of the new owners and the failure to involve the local authority and local residents, despite the promises of local benefits.

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Long term value

Taken together, the new emphasis on the armed forces covenant, combined with the greater flexibility implied by changes to the housing and planning regime, the recognition of the importance of economic development and regeneration within the DIO’s disposal strategy, and the government’s backing for the development of community assets, could provide the basis for a new partnership approach where the MOD works with local communities to achieve mutually beneficial outcomes. There have been important moves within HM Treasury and across government to begin to resolve the dilemma of how to get departments working together to create long term value, recognising that this is not always the same as immediate cash gain. However, as contributors to our round table pointed out, all parts of government are currently ‘asset rich and cash poor’ – a situation with the potential to entrench perverse incentives. There is growing interest in the idea of wellbeing as a measure of the nation’s economic and social health. Following the actions of the French Government in commissioning economists Joseph Stiglitz and Amartya Sen to consider measurements of wellbeing,31 the UK Government has asked the Office for National Statistics to undertake a consultation on how to assess wellbeing.32 Underlying this work is a growing understanding that a well functioning society is one where people feel good about themselves and their localities, not just one where financial value and productivity is maximised. Treasury guidance on asset ownership issued in 2008 defines value for money as ‘optimising net social costs and benefits… based on the interests of society as a whole’.33 While it assumes that assets are employed most efficiently in private ownership, it warns that ‘externalities’ affecting social welfare should be taken into account. However, it is of limited help when weighing up different disposal options, as opposed to deciding whether an asset should be public or private. Annex 2 of the Treasury’s Green Book, updated in 2011, makes it clear that policymakers should value ‘non-market impacts’ of policies or projects. ‘The full value of goods such as health, educational success, family and community stability, and environmental assets cannot simply be inferred from market prices, but we should not neglect such important social impacts in policy making,’ it explains.34 Time, health, design quality and environmental impacts can all be valued using different methodologies. Recent guidance on accounting for environmental impacts outlines how ‘total economic value’ can be used as a methodology for decision-making.35

31 Stiglitz, J., Sen, A. and Fitoussi, J-P. (2009), Report by the Commission on the Measurement of Economic Performance and Social Progress, Available from: www.stiglitz-sen-fitoussi.fr 32

Office for National Statistics (2011). Measuring National Well-being: Discussion paper on domains and measures. [online] http://www.ons.gov.uk/ons/dcp171766_240726.pdf 33

HM Treasury (2008). Value for money and the valuation of public assets [online] http://www.hm-treasury.gov.uk/d/9(2).pdf 34

HM Treasury (2011). The Green Book: Appraisal and Evaluation in Central Government. [online] http://www.hm-treasury.gov.uk/d/green_book_complete.pdf 35

HM Treasury (2012). Accounting for environmental impacts. Supplementary Green Book guidance. [online] http://www.hm-treasury.gov.uk/d/accounting_environmental_impacts.pdf

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While these methodologies are still being tested, there is acceptance at the heart of government that cash values alone are an inadequate way of ascertaining the costs and benefits of different policy options. It is also clear from the Green Book guidance that a more rounded picture of value cannot be gained without ascertaining the benefits and costs to key stakeholders. This should imply a consultative and participative approach to land and property disposals, particularly of large sites where there are likely to be significant economic and social impacts. In practice, however, this is not always the case, notwithstanding examples of enlightened approaches cited by the Defence Infrastructure Organisation – including the sale of Rainham Marshes to the Royal Society for the Protection of Birds and St Eval in Cornwall, where a development brief for the surplus land has been prepared that includes the need for facilities formerly provided by the MOD, including a shop, a community centre, and room for a hairdresser. The Government Property Unit, established in 2010, exists to provide a coordinated approach to the management and sale of public sector property. Alongside the Register of Surplus Public Sector Land, it is part of an attempt to end the interdepartmental wrangling and narrowly-focused decision-making that has characterised many disposals (not only of Ministry of Defence assets). The unit’s record to date has been instructive, and illustrates the difficulties of getting government to work in a coordinated fashion. A report by the National Audit Office in March 2012 found that while the unit had been effective in identifying savings, it had not resolved the problem of conflicts between departmental budget responsibilities and wider taxpayer interests. The unit had been slow to change the way the government as a whole manages its estate, had spent much of its first year developing plans for property management vehicles that had failed to gain support, and had ‘struggled to assert influence across government and integrate systems’.36 The NAO’s findings echo our own comment in our 2010 report that ‘Central management of assets on its own will not help unless individual departments are freed from the need to maximise the return on land disposals. There needs to be a separation between the value credited to a government department when assets become surplus to requirements, and the wider view of best value associated with the asset’s future use.’ The establishment of the Government Property Unit is a brave attempt to bring different departments together under a wider strategic approach, and its difficulties indicate the continuing battle within government to achieve wider value from its work and decision-making. Government has been enthusiastic about the potential of community budgets at local authority level, bringing together different public bodies to work for the common interest, but has found it much more difficult to put its own house in order. Nevertheless there are signs of a positive direction of travel. Government support for Chris White MP’s Public Services (Social Value) Bill,37 now enacted, flags up the importance of considering economic, social and environmental wellbeing when letting contracts.

36

National Audit Office (2012). Cabinet Office: Improving the efficiency of central government office property. London: The Stationery Office. 37

UK Parliament (2011). Public Services (Social Value) Bill. Available at http://www.publications.parliament.uk/pa/bills/lbill/2010-2012/0113/2012113.pdf

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This echoes a recent declaration by the European Parliament that ‘the criterion of lowest price should no longer be the determining one for the award of contracts, and that it should, in general, be replaced by the criterion of most economically advantageous tender, in terms of economic, social and environmental benefits – taking into account the entire life-cycle costs of the relevant goods, services or works.’38 While the new legislation is unlikely to affect land disposals directly, it could help to create a culture where ‘social return on investment’ is factored into public service commissioning and contracts. This could include contracts to provide developments or services on former MOD land. The government appears willing, at least in principle, to apply a broader understanding of value to public finance than has traditionally been the case. The continuing economic challenges nationwide, coupled with the climate of uncertainty and low business confidence that has been exacerbated by problems in the eurozone, suggest that there will be no swift return to the boom of the first seven years of this century. Indeed the International Labour Organisation has predicted that there will be no return to pre-recession employment levels worldwide until 2016.39 This challenging climate underlines the need to explore new approaches and to seek innovative solutions to the future use of military land. Solutions that factor in long term social, economic and environmental value, seek to maximise wellbeing and offer the opportunity to strengthen the Armed Forces Covenant, may prove to be of far greater long term benefit than traditional open market approaches. Such solutions could involve the creation of local asset-backed vehicles (LABVs) where several parties have a long term stake: the DIO contributes land, a development partner takes financial risk, the local authority invests in cash or kind, and community organisations help ensure long term local benefits. Such approaches build on the partnership model developed at Aldershot and can be developed under existing rules. However, they are unlikely to be helpful in the case of small, difficult or low value sites and different approaches will be required here, recognising the costs and risks to all involved.

Site spotlight: Whitehill Bordon

Whitehill Bordon is a survivor of the last government’s eco-towns programme. The former Bordon army base is to be vacated, releasing 230 hectares of land. A long-term partnership between the MOD and other public agencies will see a comprehensive redevelopment of the base into a new low-carbon community. The Coalition Government has withdrawn its backing from the national eco-towns programme and believes local communities should decide whether or not to pursue such ventures. An initial masterplan for the Whitehill Bordon scheme, which envisages 5,500 new homes, has won broad support and a series of consultation events was held in October and November 2011. A revised masterplan will be published in summer 2012. 38

www.thesrionetwork.org: ‘Social Return on Investment principles gain momentum as government policy continues to emphasise the importance of social value.’ http://www.thesroinetwork.org/component/content/article/174-all-regions/250-social-return-on-investment-principles-gain-momentum-as-government-policy-continues-to-emphasise-the-importance-of-social-value 39

International Labour Organisation (2011). World of Work Report 2011: Making markets work for jobs. Geneva: International Labour Organisation.

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The scheme includes an ‘eco-station’ with community facilities on the site of a former fire station, a new railway station, and energy efficiency measures for existing housing. A network of charging points for electric cars has also been proposed. Whitehill Bordon, like Aldershot Urban Extension, is a long-term project and current plans are for the military to leave the site in 2014 or 2015. Possible joint venture development models, discussed in our earlier research in 2010, have yet to be finalised and a range of options is still under consideration. The story of Whitehill Bordon illustrates the importance of a long term relationship between the military landowners, the local authority and local residents. The area was identified as a key regeneration priority for East Hampshire District Council at an early stage because of its wider economic impact, creating the foundations for a long term partnership and the confidence to enable masterplanning to proceed. The existence of a governance structure that includes both the DIO and local residents enables conflicts to be resolved. Participants in our round table contrasted the effective negotiations between different stakeholders at local level with the apparent lack of communication between the different government departments concerned.

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Next steps: starting to get it right

During our initial research and again in recent discussions, we have been reminded that the UK’s approach to military land disposals falls far short of international best practice. Even where there has been a history of neglect and error, other nations have found ways of creating economic and social value for local communities. These have included ‘dowries’ to cover the cost of restoration of sites to a safe and usable condition, and in the US, a self-help and information network of former military communities. The in Navy Yard in New York is a good illustration. Decommissioned by the US Federal Government in 1966, it was acquired by the City of New York three years later in an attempt to replace the mass industrial employment of the shipyard. The strategy failed. It was not until the late 1980s, under the management of a newly formed development corporation, that it began to recover. The Brooklyn Navy Yard reinvented itself as a hub for creative industries and small businesses, from green technologies to maritime services. Instead of relying on one or two large manufacturers, it now hosts 275 businesses employing around 6,000 people, and is set to expand. The community benefits are felt both in the governance of the yard – it is managed by a not-for-profit corporation with local residents and business interests on the board – and in the economic impact, with 35 per cent of jobs filled by people in the surrounding neighbourhoods and half by Brooklyn residents. Improved public access, a focus on sustainability and the preservation of historic buildings are additional benefits.40 Some of the key characteristics of the Brooklyn approach are readily adaptable to the UK context, given the political will. The creation of a non-profit holding vehicle balances commercial and community interests, while the long term approach ensures reinvestment in the site. For major sites in the UK, such a partnership approach can create both market confidence and the opportunity to generate additional value and opportunities for local communities. The approach adopted in Aldershot demonstrates how this can be done in an area of relatively high housing demand; in areas like rural Lincolnshire, there needs to be an acceptance that there may be more value to the public purse in avoiding escalating social costs than in achieving a small but immediate capital receipt. The costs to the DIO of engaging in long term development partnerships in such areas need to be factored into departmental budget setting in order to reduce the incentive to offload difficult sites prematurely. Aldershot, Whitehill Bordon and some of the case studies highlighted in our original report also show the crucial importance of local leadership. Local authorities that take a strategic view and set out clearly their ambitions for former military sites within their local plans are in a better position to exercise influence over the terms of sales and future uses than those that only respond when a site is released to the market. Given the scale of the disposals likely over the next decade, councils should identify military sites in their areas now and begin to explore potential scenarios for their future use. These options should include shared arrangements

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Kimball, A. and Romano, D. (2012). ‘Reinventing the Brooklyn Navy Yard: a national model for sustainable urban job industrial creation.’ Defence Sites: Heritage and Future 2012. Wessex Institute of Technology, June 2012.

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that enable different partners to have a stake in the future use of a site, and in the revenue and capital appreciation that may be obtainable from it. Many local authorities have already begun to use the funding crisis that is upon them as an opportunity to pool budgets, rethink priorities and take a more holistic approach to service commissioning in order to achieve long term value. Central government, despite its rhetoric, lags behind and continues to act in ways that risk increasing the burden on the public purse. These risks are avoidable. We return to the four themes of our original report, which are not only still valid but increasingly urgent as the scale of the armed forces’ reorganisation becomes clearer: • Central government needs to take a long term approach to valuing public assets, weighing up the costs and benefits of future use as well as immediate receipts; • There need to be better mechanisms to ensure cooperation between government departments; • We need effective ways of sharing good practice and building networks of communities affected by military land disposals; • We need to learn from international experience and apply that learning in the UK from the start of the next wave of MOD disposals. Localism and the Armed Forces Covenant provide a framework that can be used to identify shared interests and objectives at both a local and a national level, and adapted to the very different social, economic and physical contexts of different sites. This work needs to begin now and be used to inform the DIO’s plans for the next wave of disposals, rather than being ignored or clumsily retrofitted after the event.

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Appendix: Summary of policy round table discussion A policy round table was organised by the Bill Sargent Trust and hosted by the Portsmouth Naval Base Property Trust on 23 March 2012. Participants discussed an earlier draft of this report and their views have helped to inform the final document, as well as being summarised in this appendix.

Attendees: Samer Bagueen: lecturer in town planning, University of Brighton Dr Celia Clarke: academic and researcher on military heritage Tracey Coleman: project coordinator, Aldershot Urban Extension Julian Dobson: report author Daphne Gardner: director, Whitehill Bordon ecotown Peter Goodship: chief executive, Portsmouth Naval Base Property Trust Tom Horwood: executive director, Havant Borough Council/ East Hampshire DC Richard Jolley: director of planning, Fareham Council Fen Kipley: community development practitioner, Lincolnshire, and undertaking PhD research in decommissioning Cllr Michael Lane: chair of economic development, Gosport Council Penny Mordaunt: MP for Portsmouth North Mark Mitchell: chair, Bill Sargent Trust Martin Lloyd: head of disposals (south), Defence Infrastructure Organisation Geoff Phillpotts: secretary, Bill Sargent Trust Stephen Rolph: Asset Transfer Unit Rose Seagrief: Wiltshire Community Land Trust Cllr Gerald Vernon-Jackson: leader, Portsmouth Council Bruce Voss: Area manager, Homes and Communities Agency

Summary of key issues

Scale and timing The key factor influencing the scale and timing of defence land disposals will be the return of the armed forces from Germany, with a phased withdrawal (half by 2015, and half by 2020). This will require a reconfiguration of almost the entire defence estate, alongside the reductions in military and civilian personnel announced in the Strategic Defence and Security Review. The size of the armed forces will be known by summer 2012 and the likely configuration of the defence estate by early 2013. This will include the scaling back of the reserve forces, with around one third of sites likely to be surplus. A programme of disposals for the next five to six years should be decided by spring 2013.

Treasury rules The MOD is funded to defend the nation, and its use of land is seen as incidental. The Defence Infrastructure Organisation is expected to sell surplus land within three years unless there is

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a good reason to hold onto it, and to obtain market value. On several occasions it was suggested the DIO’s hands are effectively tied because of the requirement to meet these guidelines, and to raise funds to reinvest in current military needs such as soldiers’ accommodation and defence equipment. Attendees highlighted the failure of Treasury guidance to take into account either the long term investment of public money in military sites over decades or sometimes centuries, and the requirement for reinvestment after disposal, which often falls on the public purse in one form or another. Valuing sites purely in terms of cash receipts failed to factor in such costs and investment.

Government communication failures Several participants referred to the difficulties of getting different government departments to work together to a common agenda on the reuse of military land. Disagreements between departments had resulted in costly aborted work. Following the abolition of regional spatial strategies, there was no mechanism to link local developments with their wider effects on transport infrastructure, healthcare or water resources. Central government efforts to coordinate asset disposals via the Government Property Unit had made little impact at local level.

Local authority leadership While the DIO is obliged to meet departmental and Treasury requirements, its disposals of land and assets have to adhere to local plans. It was suggested that where effective partnerships had been formed, this was often the result of good local leadership: local authorities had been aware of the potential future uses of surplus sites at an early stage and had articulated their intentions clearly. DIO cannot sell sites for purposes that contravene local plans, participants stressed. Such plans should take into account the wider economic potential of surplus military sites. In East Hampshire, Whitehill Bordon has been earmarked as a key area of economic opportunity and has been given a high priority by the local authority.

Long term partnerships The round table heard of some successful long term partnerships between the MOD and local authorities, particularly at Aldershot Urban Extension and Whitehill Bordon ecotown. Although these are both at a relatively early stage of development (Whitehill Bordon still has to receive planning permission at the time of writing) current progress has been the result of strong relationships between DIO and its predecessors and local authorities over a number of years. One characteristic of the Aldershot partnership has been the creation of shared facilities used by both the military and the local civilian population. The Hampshire Economic Military Partnership is also addressing the issue of employment for ex-service personnel. It was suggested more formal partnership arrangements involving ‘local asset backed vehicles’ (LABVs) should be a preferred model for future large-scale disposals. Such arrangements would involve DIO contributing land to a development partnership with the local authority and others, and receiving income as development proceeds. LABVs can be established under current rules but do require a long term commitment from all key partners. Councils also have the powers to borrow to buy land and assets, as long as they can show how such borrowing can be repaid.

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Maintenance and site condition A recurring problem with many MOD sites is the state of disrepair of buildings and infrastructure. Sites that are surplus to requirements receive minimal investment when they are vacated, as the DIO’s priority is the property in current use. The result is that key buildings, such as Cambridge Military Hospital in Aldershot, can deteriorate rapidly. The cost of security can also be a disincentive to long term planning. To keep a site mothballed and secure can cost up to £250,000 a year, creating pressure for quick disposals when a longer term approach may be more beneficial.

Poorly managed asset sales In contrast with the partnership approaches at Aldershot and Whitehill Bordon, the round table heard of examples of poorly managed disposals where assets were sold over the heads of local people to absentee landlords or to new owners who closed down facilities and failed to maintain them. In rural Lincolnshire the result had been a spiral of decline; in other areas, such as Gosport, promises of improvements had not been delivered by new owners. The situation is further complicated by the transfer of MOD housing in 1996 to Annington Homes, which is able to resell surplus housing to any buyer without reference to the MOD or local community. A key issue has been the lack of information, with examples of poor or non-existent liaison between the Defence Infrastructure Organisation and the local authority at the point of sale.

International experience The US model, where a Base Reuse Authority takes control of surplus sites and transfers them to the local community if there is a local need, was cited as an example of good practice that could be adopted in the UK. The US also has a lively network of former military communities that share information and good practice. However, it was suggested the Swedish approach, which also involves handing surplus sites back to the local community, resulted in ‘warts and all’ handovers that transferred liabilities as well as assets. The importance of military heritage as an economic opportunity was also highlighted: replica historic ships had become an important attraction at Gothenburg, for example.