The fine detail eludes me but a similar piece of stupidity occurred c. 1995 with respect to Metpersons living in Officers' Messes.
Being MoD and thoroughly good people, we were permitted [if accepted!] to live in Mess on attachment, and for a very modest sum. Our subsistence rate was correspondingly small.
There was clear advantage to the RAF and the metperson ........... liaison was virtually continuous and good feedback was had by all.
Despite valiant efforts in high places, it was ruled that the metpersons would henceforth pay full whack, and receive full subsistence.
Now Messes can be great, but there are downsides [no, really!] so metpersons living-in ceased almost overnight, as they voted for a nice hotel with ensuite facilities and towels.
I don't think MoD made a net saving, and there was a tangible loss to the service.