According to the Telegraph story, other parts of the plan are being continued with.
The quoted MoD source also said:
We are committed to widening entitlement to those in established long-term relationships and parents with non-resident children.
But we have listened to feedback and are therefore pausing the rollout of the elements of the policy related to service families’ accommodation, including the move to needs-based allocation and, in the short term, the widening of entitlement.