Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Accepted
Integrate volunteer estate needs into defence investment plan and report on RFCA VAT progress.
Conclusion
The Department does not have a modernised and fit-for-purpose volunteer estate to support the enhanced roles of the reserves and cadets. The reserve training sites are the basis for mobilising the reserves, while having accommodation for thousands of cadet units to operate across the UK provides an important, nationwide presence. However, the volunteer estate has been in a state of managed decline, and it has too many sites— around 2,500—some of which are not in the right places. The Department has started an estate optimisation programme, initially focusing on disposals. It now wants to consolidate some sites, establishing 5 super reserve centres with additional facilities such as car parking, accommodation and feeding facilities. This will require investment, but the Department has not yet secured funding for future phases of this work. Meanwhile, the Department has brought the maintenance of the volunteer estate into its wider defence estate maintenance contract. There have been teething problems with this contract, with one supplier not delivering what it should. The Department also misunderstood RFCAs’ liability to pay VAT on work done through this contract, meaning that RFCAs have had less money available for maintenance than expected. The Department is discussing the VAT issue with HM Revenue & Customs (HMRC). Resolving it may require either a site-by-site review of the ownership of RFCA sites or addressing it as part of forming the RFCAs into an NDPB. recommendation To establish and maintain an optimised volunteer estate the Department should: a. ensure due consideration is given to the volunteer estate in its balance of investment decisions as it develops its defence investment plan which it is committed to completing in autumn 2025; and b. write to the Committee alongside its Treasury Minute response, regarding progress on its discussions with HMRC relating to the RFCAs’ VAT status.
Government Response Summary
The government agrees and commits to providing updates on its progress with discussions with HMRC, which will consider the case and provide guidance on recovering VAT incurred on maintaining the volunteer estate.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. consider the case and provide further opinion and guidance on what evidence or actions are necessary to be able to recover VAT incurred by MOD on maintaining the volunteer estate. The department will provide updates on progress as requested by the Committee.