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Armed For Twenty-Sixth Report 2012ces’
Pay Review BodyChair: Jerry Cope
Forty-Fourth Report 2015
Chair: John Steele
Cm 9025
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ArmedForces’PayReviewBody
FortyFourthReport2015
Chair:JohnSteele
PresentedtoParliamentbythePrimeMinisterandthe
SecretaryofStateforDefencebyCommandofHerMajesty
March2015
Cm9025
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©Crowncopyright2015
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ArmedForces’PayReviewBody
TERMSOFREFERENCE
The Armed Forces’ Pay Review Body provides independent advice to the Prime Minister and the
Secretary of State for Defence on the remuneration and charges for members of the Naval, Military
and Air Forces of the Crown.
In reaching its recommendations, the Review Body is to have regard to the following considerations:
• the need to recruit, retain and motivate suitably able and qualified people taking
account of the particular circumstances of Service life;
• Government policies for improving public services, including the requirement on the
Ministry of Defence to meet the output targets for the delivery of departmental services;
• the funds available to the Ministry of Defence as set out in the Government’s
departmental expenditure limits; and
• the Government’s inflation target.
The Review Body shall have regard for the need for the pay of the Armed Forces to be broadly
comparable with pay levels in civilian life.
The Review Body shall, in reaching its recommendations, take account of the evidence submitted
to it by the Government and others. The Review Body may also consider other specific issues as the
occasion arises.
Reports and recommendations should be submitted jointly to the Secretary of State for Defence and
the Prime Minister.
ThemembersoftheReviewBodyare:1
JohnSteele(Chair)2
MaryCarter
TimFlesherCB
PaulKernaghanCBEQPM
ProfessorKenMayhew
JudyMcKnightCBE
VilmaPattersonMBE
RearAdmiral(Ret’d)JonWestbrookCBE
ThesecretariatisprovidedbytheOfficeofManpowerEconomics.
1 ViceAdmiralSirRichardIbbottsonKBECBDSCwasalsoamemberoftheReviewBodyuntilJuly2014.2 JohnSteeleisalsoamemberoftheReviewBodyonSeniorSalaries.
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Paragraph Page
Termsofreference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
Glossaryofterms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
Chapter 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 1
Context. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 1
Ourevidencebase . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8 2
Our2015report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.13 3
Chapter 2 ContextandEvidence . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 5
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 5
Governmentevidence. . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 5
–Generaleconomiccontext . . . . . . . . . . . . . . . . . . . 2.2 5 –MODevidenceonstrategicmanagement. . . . . . . . 2.4 5
Staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8 6
Motivationandmorale. . . . . . . . . . . . . . . . . . . . . . . . 2.11 6
Workload . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.15 7
–Operationalandothercommitments . . . . . . . . . . 2.15 7
–Workinghours . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.18 8
–NationalMinimumWage. . . . . . . . . . . . . . . . . . . 2.21 8
–Leavearrangements. . . . . . . . . . . . . . . . . . . . . . . 2.23 9
Paycomparability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.25 9
–PwCreport:Comparisonsofpaywiththeciviliansector . . . . . . . . . . . . . . . . . . . . . . . . . 2.28 10
–ComparisonswithdatafromtheAnnualSurvey
ofHoursandEarnings. . . . . . . . . . . . . . . . . . . . . . 2.31 10
–Graduatesinpublicsectorprofessions. . . . . . . . . . 2.32 11
Engineerresearch. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.33 12
DiversityandinclusivityintheArmedForces. . . . . . . . 2.38 12
ReserveForces. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.52 15
Chapter 3 PayandAllowances. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 17
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 17
Recommendationonbasepay . . . . . . . . . . . . . . . . . . . 3.5 18 RecruitmentandRetentionPayment. . . . . . . . . . . . . . 3.14 19
RRP(AeromedicalandEscortDuty). . . . . . . . . . . . . . . 3.25 22
Submariners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.29 22
AlliedHealthProfessionals. . . . . . . . . . . . . . . . . . . . . . 3.44 25
CommitmentBonuses. . . . . . . . . . . . . . . . . . . . . . . . . 3.57 27
NorthernIrelandResidents’Supplement. . . . . . . . . . . 3.61 27
MineCountermeasuresVesselsEnvironmental
Allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.65 28
ExperimentalTestAllowance. . . . . . . . . . . . . . . . . . . . 3.70 29
Reserves’BountiesandCallOutGratuity. . . . . . . . . . . 3.73 29
FinancialIncentivesconsideredoutsideourusual
timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.76 30
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RatesofCompensatoryAllowances. . . . . . . . . . . . . . . 3.85 31
ReviewofXFactorComponents. . . . . . . . . . . . . . . . . 3.86 31
Chapter 4 AccommodationandFoodCharges. . . . . . . . . . . . . . 4.1 33
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 33
Accommodation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 33
–Contextandvisitsevidence. . . . . . . . . . . . . . . . . .
..4.4 33 –MODproposalsforanewaccommodation
gradingsystem. . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11 35
–Changestomaintenancearrangements. . . . . . . . 4.19 37
–OurconsiderationofCAAS. . . . . . . . . . . . . . . . . . 4.21 37
–Recommendationsforchargesfrom1April2015. 4.28 38
ServiceFamilyAccommodationrentalcharges. . . . . . 4.33 39
–OthercomponentsofSFAcharges . . . . . . . . . . . . 4.34 39
SingleLivingAccommodationrentalcharges . . . . . . . 4.35 39
–OthercomponentsofSLAcharges. . . . . . . . . . . . 4.36 40
Othercharges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.37 40
D a i l y F o o d C h a r g e . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.38 42
–ThecoremealunderPayAsYouDine. . . . . . . . . . 4.41 42
Chapter 5 ConclusionsandLookingAhead. . . . . . . . . . . . . . . . . 5.1 45
Conclusionsandcostofrecommendations. . . . . . . . . . 5.1 45
L o o k i n g f o r w a r d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 45
O u r n e x t R e p o r t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.14 47
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.16 48
Appendix 1 1April2015recommendedmilitarysalaries . . . . . . . . . . . . 49
Appendix 2 1April2015recommendedratesofRecruitmentand RetentionPaymentandCompensatoryAllowances. . . . . . . 63
Appendix 3 AFPRB2014recommendations. . . . . . . . . . . . . . . . . . . . . . 70
Appendix 4 AFPRB2014visits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Appendix 5 Detailsonrecruitmentandretentionandfindingsfrom
the2014AFCAS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Appendix 6 RemitletterfromtheChiefSecretarytotheTreasuryand
letterfromtheSecretaryofStateforDefence. . . . . . . . . . . 81
Appendix 7 ReviseddefinitionsofXFactorcomponents . . . . . . . . . . . . 86
Appendix 8 AFPRB’sfiveyearworkprogrammeschedule. . . . . . . . . . . . 92
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GLOSSARYOFTERMS
AE AeromedicalEvacuation
AED AeromedicalandEscortDuty
AFCAS ArmedForcesContinuousAttitudeSurvey
AFPRB ArmedForces’PayReviewBody
AHL AnningtonHomesLtd
AHP AlliedHealthProfessional
ASHE AnnualSurveyofHoursandEarnings
BAME Black,AsianandMinorityEthnic
BMS BiomedicalScientist
CAAS CombinedAccommodationAssessmentSystem
CB CommitmentBonus
CCB ContinuousCareerBasis
CDP ChiefofDefencePersonnel
CDS ChiefofDefenceStaff
CMT CombatMedicalTechnician
COG CallOutGratuity
CPO ChiefPettyOfficer
CPOET ChiefPettyOfficerEngineeringTechnician
CRL Catering,RetailandLeisure
CST ChiefSecretarytotheTreasury
CTB CompletionofTaskBasis
CToS CommonTermsofService
DDIP DefenceDiversityandInclusionProgramme
DFC DailyFoodCharge
DIO DefenceInfrastructureOrganisation
DMS DefenceMedicalServices
DMSCAS DefenceMedicalServicesContinuousAttitudeSurvey
EGS EngineeringGeneralService
ET EngineeringTechnician
ETA ExperimentalTestAllowance
EU EuropeanUnion
FAMCAS TriServiceFamiliesContinuousAttitudeSurvey
FI FinancialIncentiveFRI FinancialRetentionIncentive
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FTRS FullTimeReserveService
GDP GrossDomesticProduct
GTS GainstoTrainedStrength
HCA HealthcareAssistant
HMNB HerMajesty’sNavalBase
HMS HerMajesty’sShip
ILA IndividualLeaveAllowance
JE JobEvaluation
JPA JointPersonnelAdministration
KPI KeyPerformanceIndicator
LSA LongerSeparationAllowance
MA MedicalAssistant
MASM MedicalAssistantSubmarines
MCMV MineCountermeasuresVessels
ML MountainLeader
MOD MinistryofDefence
MSO MedicalSupportOfficer
NATO NorthAtlanticTreatyOrganisation
NCB NonContinuousBasis
NEM NewEmploymentModel
NFF NavyFamilies’Federation
NHS NationalHealthService
NIRS NorthernIrelandResidents’Supplement
NMW NationalMinimumWage
NP NuclearPropulsion
NTM Noticetomove
OCFR OfficersCommissionedfromtheRanks
ODP OperationalDepartmentalPractitioner
OF Officer
OME OfficeofManpowerEconomics
OPP OperationalPinchPoint
OR OtherRank
PAYD PayAsYouDine
PBF ProfessionalBodyFee
PFI PrivateFinanceInitiative
PJI ParachuteJumpInstructor
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PO PettyOfficer
POET PettyOfficerEngineeringTechnician
PVR PrematureVoluntaryRelease
PwC PricewaterhouseCoopers
RAF RoyalAirForce
REME RoyalElectricalandMechanicalEngineers
ResCAS ReservesContinuousAttitudeSurvey
RM RoyalMarines
RN RoyalNavy
RPI RetailPricesIndex
RRP RecruitmentandRetentionPayment
SCAPE SuperannuationContributionsAdjustedforPastExperience
SDSR StrategicDefenceandSecurityReview
SFA ServiceFamilyAccommodation
SFF ServiceFamilies’Federations
SG SurgeonGeneral
SLA SingleLivingAccommodation
SLAM SingleLivingAccommodationModernisation
SM Submarine
SMSupp SubmarineSupplement
SNCO SeniorNonCommissionedOfficer
SSRP StandStillRatesofPay
STEM ScienceTechnologyEngineeringandMathematics
TechAc AircraftTechnician
UK UnitedKingdom
ULA UnpleasantLivingAllowance
VAT ValueAddedTax
VO VoluntaryOutflow
WO WarrantOfficer
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ARMEDFORCES’PAYREVIEWBODY2015REPORT–SUMMARY
Recommendations(from1April2015unlessotherwisestated):
• allratesofbasepaybeupliftedbyonepercent;
• Targetedpaymeasures:
–RecruitmentandRetentionPayment(RRP)ratesbeheldforthosereceiving
RRP(MountainLeader)andRRP(ParachuteJumpingInstructor);
–Unlessspecifiedseparately,allotherratesofRRPbeincreasedbyonepercent;
–FullreviewsofRRP(MountainLeader)andRRP(Flying)beconductednextyear;
–RRP(AeromedicalandEscortDuty)befrozenfrom1April2015inadvanceof
itswithdrawal;
–TheSubmarineGoldenHelloschemeshouldcontinueatitscurrentrate;RRP
(Submarine)beupliftedinlinewiththepayawardwithachangeatwhich
thehighestbandispaidwhenpersonneltakeuptheirmostseniorsea-goingroles(fromApril2017);thesinglerateofRRP(SubmarineSupplement)should
changetotwobands(£5.00perdayforpersonnelassignedtooperational
submarinesand£15.00perdayforpersonnelwhentheyareembarkedat
sea);RRP(NuclearPropulsion)forORsshouldmovetoadailyrateof£3.00
forCategoryC,£6.00forCategoryB,£12.00forCategoryB2and£40.00for
CategoryA2;CategoryA1RRP(NuclearPropulsion)shouldchangetoadaily
rateof£12.00forpre-ChargeOFsand£20.00forChargeandpostChargeOFs
(fromApril2016);asubmarineEngineerOfficers’Supplementbeestablished
forOFsservingatseaatadailyrateof£10.00forpre-Chargeand£20.00for
thoseinChargeandpost-Chargeappointments;
–ThethreeexistingCommitmentBonus(CB)schemesshouldremainastheyareuntilamorefundamentalreviewofCBshasbeencarriedoutbyMODbythe
endof2015;
–TheNorthernIrelandResidents’Supplementbeincreasedbyonepercent;
–AnewMineCountermeasuresVesselsEnvironmentalAllowancebeintroduced
atarateof£3.43perday;
–ExperimentalTestAllowanceshouldcontinue,andthattherateshouldbe
increasedeachyearinlinewiththeannualpayawarduntilournextreview;
–Reserves’BountiesandCall-OutGratuitybeincreasedbyonepercent;
–TheproposedFinancialRetentionIncentiveforREMEAircraftTechniciansat
CorporalClassOnelevelwasimplemented(from1October2014);
–Allratesofcompensatoryallowancesnotreviewedseparatelybeincreasedby
onepercent;
• Anincreaseof2.8percenttoallgradesofServiceFamilyAccommodationrental
chargesinlinewiththerentalcomponentofRPIasatNovember2014;
• Increasesof2.8percenttograde1,1.9percenttograde2,0.9percenttograde
3andzerotograde4forSingleLivingAccommodationrentalcharges;
• ADailyFoodChargeof£4.79(anincreaseof7pence,or1.5percent).
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ThisReportsetsoutourrecommendationsonmilitarypayfromApril2015.Ourworkwas
informedbyarangeofevidence:fromtheMinistryofDefence(MOD),includingtheSecretary
ofStateandChiefofDefenceStaffinoralevidence;fromtheServiceFamilies’Federations
(SFFs);fromtheDefenceInfrastructureOrganisation(DIO),andbyanupdatetothe
independentresearchonpaycomparabilitywecommissionedlastyear.Asusual,wealsoheard
directlyfromServicepersonnelandtheirfamilies,visitingsome30establishmentsintheUKand
overseas.
TheoverallcontextforthisroundincludedtheGovernment’spolicyofcontinuingpublic
sectorpayrestraintandtheimpactonServicepersonnelofthecontinuedrestructuringtomeet
the2010StrategicDefenceandSecurityReview(SDSR)recommendations.TheGovernment’s
evidenceemphasiseditsviewthatpublicsectorpayrestraintcontinuedtoplayacrucialrolein
sustainingtheUK’seconomicrecovery.TheSecretaryofStateacknowledgedinhisremitletter
thattherewereparticularareasoftheArmedForcesexperiencingrecruitmentandretention
difficulties.Heconfirmedthatincrementalpayscaleshavebeenafundamentalpartofthesalary
structureandtheNewEmploymentModel(NEM)wouldlookathowpayprogressioncanbeas
efficientaspossible.
TheperiodcoveredbythisremitsawfurtherslowgrowthintheUKeconomy:GDPgrewby
0.7percentinthethirdquarterof2014anditwas2.6percentlargerthaninthesamequarterayearearlier.Employmentlevelscontinuedtorise,particularlyinlowerpaidsectors,and
unemploymenttofall.AverageweeklyearningsgrowthinthethreemonthstoOctober2014
was1.4percent,whileCPIinflationwasat0.5percentintheyeartoDecember2014,a
14yearlow.
ThenumberofRegularServicepersonnelcontinuedtoreducetomeetthenumbersrequired
underSDSR2010,includingthefinaltrancheofredundancies.Atthesametime,work
continuedtorecruitReservestomeettheFutureReserves2020targets,withimprovements
beingmadetotherecruitmentprocessandanincreasingnumberofmarketingcampaigns.
ProgresscontinuedontherebasingofArmyelementsfromGermanytotheUKandthe
remainingfrontlinepersonnelwithdrewfromAfghanistaninlate2014.Despitethemoveto
contingency,manyServicepersonnelandtheirfamiliescontinuedtofeeluncertainabouttheir
futuresandwhatthechangesunderNEMwillmeanforthem,particularlyregardingpayand
accommodation.Manypersonneltoldustheyfeltunderintensepressureduetohightempo
andincreasingworkloads,someduetogappingasunitsworkedaroundvacantposts.Wewere
surprisedattheseeminglyhighnumbersofpersonnelwhowereheldathighreadiness.We
noticedashiftinviewsonmotivationandmoraleinthisround.Whilepersonnelthoughtthat
thedemotivatingfactorssuchaspayrestraint,uncertaintyandoverstretchweretemporary,
theywererelativelysanguineaboutthem.However,assuchissuesappearedmorelikelyto
endure,therewasacorrespondingnegativeimpactonmoraleandmotivation.
TheSecretaryofStatemaintainedthattheArmedForcespackagewasstillattractive,with
theretentionofincrementalpayscales,thenoncontributorypensionscheme,subsidisedaccommodationandaccesstofreemedicalanddentalcare.However,itwasclearfrom
discussionsduringourvisitsandevidencereceivedfromtheSFFsthatServicepersonneland
theirfamiliesfelttheoverallofferwasdeterioratingandtheywerefeelingthecumulativeimpact
onlivingstandardsofafifthyearofpayrestraint.Manydidnotfeeltheywereadequately
rewardedforthesacrificestheyandtheirfamiliesmade,withimpactonspousalemployment
beingaparticularissueraisedonvisits.
Wecommissionedanupdatetotheindependentresearchcarriedoutforuslastyearcomparing
paylevelsintheArmedForceswithjobsofsimilarweightincivilianlife.Thisworkconcluded
that,overall,ArmedForcessalariesfor2014werecomparablewiththoseintheciviliansector.
Ourownanalysis,basedonacomparisonofearningsdatafordifferentagegroups,also
showedthat,formostpersonnel,salarieshaveremainedcomparablewiththeciviliansectoroverthelasttenyears.Wealsolookedatthelabourmarketforengineersandconsideredpay
comparisonsbetweenengineersintheArmedForcesandcivilianengineers.
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Weconsideredthispaycomparabilityevidencealongwiththefullrangeofotherevidenceput
tousbeforereachingaconclusiononourbasepayrecommendation.Wenotedthat,despite
somesignificantgapsincertainkeyskillsareas,MODdidnothaveanymajorconcernswith
recruitmentandretentionintheArmedForcesasawhole.Overall,weconcludethata
onepercentacrosstheboardincreaseinbasepayisappropriateforthisyear.
Targetedmeasuresplayanimportantroleinsupportingrecruitmentandretentioninareas
wheretherearestaffingpressures.ForthisReportwecompletedreviewsonAlliedHealthProfessionals,CommitmentBonuses,ExperimentalTestAllowance,NorthernIrelandResidents’
Supplement,Submariners,andReservesBountiesandapprovedtheintroductionofaMine
CountermeasuresVesselsEnvironmentalAllowance.Duringthecourseoftheyearwealso
endorsedaseriesofFinancialRetentionIncentivesaimedatincreasingtherecruitmentand
retentionofMedicalAssistants(Submarines),EngineeringGeneralServiceOfficers(RoyalNavy),
REMEAircraftTechnicians,andexRegularstotheArmyandRAFReserves.
WeusedtheprocessforreviewingRecruitmentandRetentionPayment(RRP)thatwas
introducedlastyear.WereceivedevidencefromMODrecommendinganincreaseofoneper
cent,inlinewithitsproposalontheoverallpayaward,formostcadres’RRPrates.Wecarried
outanindepthreviewforRRP(AeromedicalandEscortDuty).Werecommendanincreaseof
onepercentinRRPformostcadreswithaholdingoftheratesofRRP(MountainLeader),RRP(ParachuteJumpingInstructor)andRRP(AeromedicalandEscortDuty).Furtherdetails
onthesemeasuresarediscussedinChapter3.We recommendanincreaseofonepercentin
theratesofcompensatoryallowancesnotreviewedseparately.
WearegratefulforthecommentsreceivedfromtheSFFsandMODontheproposed
amendmentstotheXFactorcomponentsdetailedinour2014Report.Wetookaccountof
thesewhenproducingtherevisedlistofXFactorcomponentswhichwillbeusedforthenext
reviewin201718andwhichareincludedinChapter3ofthisReport.
Theprovisionofsubsidisedaccommodationcontinuestobeakeyelementoftheoverall
militarypackage.Wealwaystrytoseefirsthandthefullrangeofaccommodationwhenon
visits,aswellashearingtheviewsofpersonnelandfamilies.WealsoreceivedwrittenandoralevidencefromtheSFFsandDIO.Themainissuesregardingaccommodationcontinued
tobeconcernsaboutcharges,maintenance,theallocationsprocess,thecomplaintsprocess,
supplyandlackofchoice.Anewnationalhousingcontractcameintoeffectinlate2014,
whichincludedthemaintenanceservice.Thenewcontract,togetherwithplannedchanges
totheaccommodationgradingsystem,meansourReportthisyearcoverstheusualannual
recommendationswithinthecontextofthechangesthatwilltakeplaceoverthenextfew
years.
MODsharedwithusitsproposalsfortheimplementationofthenewaccommodationgrading
system,theCombinedAccommodationAssessmentSystem(CAAS),whichisintendedto
replacetheexistingfourtiergradingsystem(4TG)forSFAfrom1April2016.Wehave
commentedoveranumberofyearsthattheexistinggradingsystemneededreformasitwasregardedasunfairandnottransparent.WewelcomethatMOD’sproposednewgradingsystem
isbasedonthenationallyrecognised‘DecentHomesStandard’andthatanyadditionalmoney
received,asaresultofcorrectingundercharging,willbespentonimprovingthequalityand
maintenanceofServiceFamilyAccommodation(SFA).However,carewillneedtobetaken
toensurethatpersonnelandtheirfamiliesunderstandthatanyincreasesinaccommodation
charges,asaresultofthenewsystem,areduetothecorrectionofthefailingsoftheoldsystem
andnotpartofamovetoincreasetheirrentstomarketrates.Evidenceofimprovementstothe
overallqualityofthehousingstockandtheresponsivedeliveryofmaintenanceserviceswillbe
keytoensuringpersonnelacceptthenewsystem.
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WhilewewelcomeCAAS,weareconcernedoverhowMODintendstotransitiontothenew
systemandthepotentialfinancialimpactonServicepersonnel.Wearethereforenotatthis
stagepreparedtoendorseMOD’sproposalthattherateofchargeforthetopCAASband
shouldbesetequaltothetopchargeofthe4TGsystemon1April2016,northatthelevelsof
adjustmentforthesubsequentbandswouldreduceinstepsoftenpercentofthattoprate.We
appreciatethatMODhaskeptusinformedofitsdevelopingplansandsupporttheintentand
overalldesignofCAAS.MODshouldcontinuetoengagewithusontransitionalarrangements
sothatweareinapositiontomakerecommendationsonthesefiguresbyournextReport.
Forthisyear,MODaskedustoendorseauniformincreaseinrentalchargesforallgradesof
accommodationfrom1April2015,linkedtoourusualbenchmarkoftherentalcomponent
oftheRetailPricesIndex(RPI).Weweremindfulthatthiswouldresultinahigherpercentage
increasethanthepayaward,afactthatisoftenraisedbyServicepersonnelonvisits.However,
theseincreasesmirrorthoseincivilianlifeandourapproachisdesignedtoreflectthisand
maintain(ratherthanincreaseordecrease)therelativediscountforServiceaccommodation.
Wesawnoreasontodeviatefromthisapproachandconcludedthattheimprovementsmade
toSFAoverrecentyearsjustifiedarecommendationofauniformincreaseof2.8percent,
linkedtotherentalcomponentRPIasatNovember2014,forallgradesofSFA.
GiventhelimitedevidenceofimprovementstoSingleLivingAccommodation(SLA)overall,andtheabsenceofaccuratemanagementinformation,weconsideritappropriatetoretainour
existing,tieredapproachtoSLA.Wethereforerecommendanincreaseof2.8percentinthe
chargeforgradeoneSLA,butwithlower,tieredincreasescontinuingtoapplyforlower
gradeSLA.
WealsoconsideredwhatincreasetotheDailyFoodCharge (DFC)wasappropriateduringthis
periodofcontinuedpayrestraint,whilealsobeingawarethatfoodpriceincreasesaffectboth
Servicepersonnelandtheirciviliancounterparts.Weconcludedthatweshouldcontinuewith
theapproachwehaveusedinrecentyearswhichlinkstheDFCtothechangeinthecostof
foodtoMOD.WethereforerecommendanincreaseintheDFCto£4.79(anincreaseof
7pence,or1.5percent).
Lookingahead
TheGovernmentconfirmedthatthecurrentpolicyonpublicsectorpayrestraintwillcontinue
until2015–16andweacknowledgethatitmaywellextendfurtherintothenextParliament.
ContinuedpayrestraintwillputpressureonthemilitaryofferandMODwillneedtomake
suretheemploymentpackageremainsattractiveandcompetitive,particularlyforpersonnel
inkeyareaswhoseskillsarehighlysoughtafterbycivilianemployers.MODshouldpursuea
proactiveapproachtomonitoringworkloadsandoutflowrates,andtorecruitingandretaining
keypersonnel.EffectivecommunicationofalltheproposedchangesunderNEM,especiallyon
accommodationandpaywillbecrucialinmaintainingthecommitment,motivationandmorale
ofServicepersonnelandtheirfamilies.MODmustensurethenewnationalhousingprimecontractdeliverstheimprovedqualityofaccommodationandimprovedmaintenanceservices
ithaspromised.Astheeconomypicksup,theArmedForcesmustbeabletoattractandretain
bothRegularandReservepersonnelfromarangeofdifferentbackgroundsandcommunities.
Althoughsomeprogresshasbeenmadeandsomepositiveinitiativesareinplace,thereisstill
muchtobedoneasregardsmonitoringandincreasingthediversityoftheArmedForcesso
theyaretrulyreflectiveofthesocietytheyserveanddefend.
Welookforwardtoreceivingfutureproposalsandbeingkeptuptodatewithprogressonall
theseissues.
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Chapter1
INTRODUCTION
Introduction
1.1. ThisReportsetsoutourrecommendationsonmilitarypayfor201516.Initsresponseto
ourlastReport,theGovernmentacceptedourrecommendationsforpayfrom
1April2014.Thesewere:aonepercentincreaseinbasepay;aonepercentincreasein
mosttypesofRecruitmentandRetentionPayment(RRP),CompensatoryAllowancesand
Reserves’Bounties;twoadditionallevelsofLongerSeparationAllowance;andanumber
oftargetedmeasures.
1.2. Insettingouttheremitforthisyear’sroundtheSecretaryofStateforDefencesaidthat
theArmedForcesremainedinastateoftransition,faceduncertaintiesandthatthere
wererecruitmentandretentionissuesinparticularareas(letteratAppendix6).Hestated
thatincrementalpayscaleshavebeenafundamentalpartofthesalarystructure,andthe
NewEmploymentModel(NEM)willlookathowpayprogressioncanbeasefficientas
possible.Hetoldusthatheconsideredtheoveralloffertobeattractive–ArmedForcespersonnelretainedincrementalpayscales,hadanoncontributorypensionandaccessto
subsidisedaccommodationandfreemedicalanddentalcare.Onaccommodation,the
SecretaryofStatenotedthattherewasworktodotoincreasesatisfaction,butthatthe
changestoDefenceInfrastructureOrganisation(DIO)managementandthenewnational
housingprimecontractwerestepsforward.
1.3. Inadditiontoconsideringanoverallpayupliftandchargesasusual,ourwork
programmethisyearincludedanumberofreviews:Submariners;AlliedHealth
Professionals;RRP(AeromedicalandEscortDuty);CommitmentBonuses;Northern
IrelandResidents’Supplement;MineCountermeasuresVesselsEnvironmentalAllowance;
ExperimentalTestAllowance;andReserves’Bounties.Wealsoreportonanumberof
measuresweendorsedoutsideourusualroundanddetailtherevisedcomponentsthatunderpintheXFactor.
Context
1.4. TheperiodcoveredbythisremitsawfurtherslowgrowthintheUKeconomy:GDPgrew
by0.7percentinthethirdquarterof2014anditwas2.6percentlargerthaninthe
samequarterayearearlier.Employmentlevelscontinuedtorise,particularlyinlower
paidsectors,andunemploymentcontinuedtofall.Averageweeklyearningsgrowthin
thethreemonthstoOctober2014was1.4percent,whileCPIinflationwasat0.5per
centintheyeartoDecember2014,a14yearlow.
1.5. ThecontextforDefenceactivitycontinuedtobetheimplementationofthe2010StrategicDefenceandSecurityReviewwithongoingaffordabilityconstraints.Numbers
ofRegularServicepersonnelcontinuedtoreducetodeliverthelevelsrequiredunder
FutureForce2020,includingthefinaltrancheofredundancies.Workcontinuedtorecruit
thesignificantnumbersofReservesrequiredonthesametimescales.Inparallelwith
changesinnumbers,workcontinuedtorebaseArmyelementstotheUKfromGermany.
1.6. TheremainingfrontlineforceswithdrewfromAfghanistaninlate2014,another
significantstepinmovingtheArmedForcestoacontingencyfooting.Atthesametime
newdemandsarose,includingmedicalstaff,logisticiansandengineersbeingsentto
AfricatosupporttheworkcontainingtheEbolaoutbreak.
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1.7. Despitegreaterclarityonsomeissuesfromayearearlier,theimplicationsofthese
changesforindividualsandtheirfamiliesremainedunclear.Todevelopanoverall
employmentoffertomatchtheneedsoftheArmedForceswiththeexpectationsof
personnel,MODcontinueditsworkontheNEMprogrammetodevelopchangestopay,
accommodation,allowances,andothertermsandconditions.Thisisofgreatimportance
totheremitgroup.
Ourevidencebase
1.8. WereceivedwrittenandoralevidenceasusualfromMOD,theindividualServices,DIO
andtheServiceFamilies’Federations.Wealsocommissionedanupdatetoourprevious
independentreportonpaycomparabilitytocontributetoouroverallassessmentofthe
broadcomparabilityofServicepaywithcivilianpaylevels.
1.9. Ourvisitsremainavitalpartofourevidencegathering,enablingustounderstandbetter
thecontextforourworkandinparticulartheconcernsandpressuresonpersonnel
andtheirfamilies.Wevisitedsome30militaryestablishments,travellingthroughout
theUKandtooverseaslocationsincludingnorthernEurope,Gibraltar,Kenyaandthe
MiddleEast.Wemetover3,100Servicepersonnelin283discussiongroupsandheld
anadditional32withfamilies,meeting280spousesandpartners.WearegratefultoallthosewhotookpartandtoMODandeachoftheServicesfororganisinganother
successfulprogramme.Werecordmuchofthedetailedfeedbackfromthesevisits
insubsequentchaptersofthisReport,butnoteheresomeofthemainthemesthat
emergedduringthisround.
1.10. Continuingchangeanduncertaintyremainedthepredominantthemesweheardon
visits.WhileoperationalcommitmentremainedinAfghanistanandelsewhere,the
Serviceswererestructuring,rebasingandmovingtowardsacontingencyfooting.
Manypersonnelfeltworndownbytheconstanttempo,changeanduncertainty.The
ArmedForceswerebeingaskedtodomorewithlessresource,andoverstretchwasa
majorproblem.Themovetoacontingencypostureaftertheprolongedcommitments
tooperationsinIraqandAfghanistannecessarilyrequiresadditionaltrainingto
ensurepersonnelareproperlyequippedfortheirnewrolesandfuturechallenges.
Notwithstandingthisrequirement,wenotedthatpersonnelseemedtobeoverstretched,
therewereincreasednumbersonshortnoticetomove,andtherewaslittleevidencethat
themovetocontingencyoperationswoulddeliverareducedoperationaltempo.Local
commandersoftenfeltthattheirabilitytomitigatetheimpactofthesepressureswas
verylimited.However,MODsurveydatashowedthatpersonnelworked,onaverage,
fewerhoursthaninthepreviousyear.ItwasapparentthatMODfacesarealchallengeto
ensurethatpersonnelremainengagedandchallengedbutalsobenefitfromthereality
that,forthefirsttimeinageneration,theArmedForcesarenotundertakingamajor,
longtermoperationalcommitment.Inessence,attentionmustbepaidtodeliveringa
realisticandsustainablework/lifebalancewhiletheoperationalrealityallows.
1.11. Furtherconcern,uncertaintyandsomeexpectationaccompaniedtheforthcoming
changesunderNEM,Army2020andFutureReserves2020.Spouseemploymentand
careerswereoftenmentionedaskeyconcerns.Generally,personnelfeltthatthevalue
oftheoverallofferhadcontinuedtodeclineinrecentyears,withasignificantnegative
cumulativeimpactfromcutstoallowances,payrestraint,increasestocharges,concerns
overthepossibleimpactoftheforthcomingpensionschemeandtherisingcostofliving.
Thereweremanyexamplesgivenwherepostsweregapped,placingextrapressureon
thosewhoremainedastherequiredoutputwasnotreduced.Personnelthoughtthatthis
couldfurtherworsenmoraleasthosefacedwithtoogreataworkloaddecidedtoleave
theArmedForces.Allofthesefactorsledtomanypersonnelfeelingdemotivatedand
undervalued.
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1.12. Onpay,whilemanypersonneltoldusthattheyunderstoodtherationalebehindtheone
percentpayaward,almosteverygroupconsideredittobeunfairwhencomparedwith
thegeneralincreaseinthecostoflivingandtheincreasesinServiceaccommodation
costs.Personnelperceivedonepercentasarealtermspaycutandfeltthatitdidnot
properlyreflectthecontributiontheymadetosociety,bothonmilitaryoperationsand
providingsupporttocivilianservices,suchashelpingwithfloodreliefandproviding
coverforstrikes.
Our2015Report
1.13. AsforourpreviousReports,wecontinuewiththeapproachofconsideringalltherelevant
evidenceavailabletous,ratherthanbeingdirectedbyGovernment.Wehavetakenfull
accountofMOD’saffordabilityconstraintsandtheGovernment’swiderevidenceonthe
economyandpayrestraint.Wehaveconsideredrecruitmentandretentionevidence,
motivationandpaycomparability,adheringtoourtermsofreference.Wereachedour
recommendationontheoverallpayawardafterassessingallthevariousandcompeting
arguments.
1.14. WehavebeenmindfulthroughoutourdeliberationsoftheconcernsofServicepersonnel,
includingtheimpactofsuccessiveyearsofpayrestraint,andthewiderchallengesforthemandtheirfamiliesasDefenceundergoessignificanttransformationalchange.In
recentreportswehavestressedtheimportanceofeffectivecommunicationofchanges
affectingpersonnelandwerepleasedtohearonvisitsofthesubstantialeffortMODhad
putintocommunicationonpensionchangesandtheredundancyprogramme.Giventhe
importanceofplannedchangesonpayandaccommodationundertheNEM,wehope
MODwillbuildontherecentexperienceofwhatworkswellincommunicatingcomplex
issuestotheremitgroup.Clearlyexplainingtheimpactoftheseimpendingchangeswill
befundamentaltoensuringthattheArmedForcescancontinuetorecruit,retainand
motivateablepersonnel.
1.15. InChapter2ofthisReportweconsider(asusual)evidenceon:theeconomyfromthe
Government;strategicmanagementfromMOD;staffing;moraleandmotivation;pay
comparability;andReserveForces.Wealsoconsiderengineersandanupdateonprogress
intheareaofdiversityandinclusivityasweregardtheseasveryimportant.
1.16. InChapter3wereviewtheevidenceandmakerecommendationsontheoverallpay
awardandonspecificgroups.
1.17. InChapter4wemakerecommendationsonaccommodationandfoodcharges.
1.18. InChapter5welookaheadtotheissueswhicharelikelytoariseasMODcontinuesto
implementchangesundertheNEMandconsiderthewiderissuesandprospectsforour
nextround.
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Chapter2
CONTEXTANDEVIDENCE
Introduction
2.1. ThischaptercoverstheGovernment’seconomicevidenceandMOD’sevidenceonthe
strategiccontext.Wealsoreportonstaffing,motivationandmorale,workload,andpay
comparability.Wereflectonprogressmadeinpromotingdiversityandinclusioninthe
ArmedForces,coverReserveForces,andconsiderengineersinthemilitaryandincivilian
life.AmoredetailedsummaryofthedataweconsideredisinAppendix5.
Governmentevidence
General economic context
2.2. TheGovernment’sevidenceonthegeneraleconomiccontextstatedthattheeconomy
grewby0.8percentineachquarterof2014,andwasforecasttobe2.7percenthigher
overallthanthepreviousyear(laterofficialdatastatedthateconomicgrowthwas0.7per
centinthethirdquarterof2014anditwas2.6percenthigherthaninthesamequarterayearearlier).TheUKeconomywassaidtobeonthepathofrecoverywithgrowthsince
thesecondquarterof2013.Employmenthadincreasedmarkedlyoverthelastyearand
unemploymentcontinuedtofall.Inflationremainedlow,withaverageearningsgrowth
remainingweak.TheGovernmentconsideredthatitspolicyofpublicsectorpayrestraint
hadbeenakeypartofthefiscalconsolidationsofar,althoughthedeficitanddebt
remainedatunsustainablelevels.Theevidenceagainreferredtotheannouncementin
the2013BudgetthatGovernmentpolicywasthatpublicsectorpayawardsin2015–16
wouldbe“limitedtoanaverageofuptoonepercent”.
2.3. MODstatedthatalltheproposedmeasuresonwhichithadsubmittedevidencewere
affordablewithindefencespending.TheletterwereceivedfromtheChiefSecretary
totheTreasurystatedthatthecaseforcontinuedpayrestraintacrossthepublicsectorremainedstrong(Appendix6).Itsaidthatpayawardsshouldbeappliedtothebasic
salarybasedonthenormalinterpretationofbasicsalaryineachworkforce.
MOD evidence on strategic management
2.4. Initsstrategicmanagementevidence,MODproposed,aslastyear,thatwerecommend
auniformincreaseinlinewiththeGovernment’spublicsectorpayrestraintpolicy.MOD
alsoproposedthatmostratesofRecruitmentandRetentionPayment(RRP)beincreased
bytheoverallpayawardandthatcompensatoryallowancesalsoberaisedbythesame
percentage.Theevidencehighlightedthenegativeimpactsoftheprolongedperiodof
changeonrecruitment,retentionandmorale.Aspersonnelnumbersarereducedtothe
2015target,therewillbetimeswhenliabilityexceedsrequirementandviceversa,aswellassomestructuralmismatches.MODacknowledgedthatwhiletheoverallstaffing
picturedidnotappeartobecritical,thereweresignificantshortfallsinsomekeyareas.
2.5. Onthestrategiccontext,MODsaidthattheArmedForcesremainedintransition,
withthemovetocontingencyandtheArmyrebasingplanmeaningmoremovesand
disruptionforpersonnelandfamiliesoverthenextfewyears.Thepictureonstaffing
remainedfluid,withanincreaseinthenumberofpinchpointsoverthelastyearand
particularconcernoversomekeycapabilities.TheArmedForceswereoutofmanning
balance1andtherewereconcernsovervoluntaryoutflow(VO)levels,bothingeneral
andforcertaingroupsofpersonnel,witharecognitionthatVOcouldpotentiallyincrease
1 Manningbalanceisdefinedasbetween2percentand+1percentoftherequirement/liability.
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asandwhenthewidereconomyimproved.Someareassawanincreaseinthenumber
ofpersonnelonshortnoticetomove.MODalsohighlightedsurveydataindicatinga
decreaseinthehoursworkedbypersonnelonaverage.
2.6. Continuingchangeanduncertaintyremainedkeyissuesforpersonnel,withanongoing
perceptionofthevalueoftheofferreducing.MODsaidthatithadlaunchedfurther
majorcommunicationsonthepensionschemeandintendedtolaunchcommunications
ontheproposednewaccommodationgradingsystem.
2.7. MODprovideduswithdetailsoftheArmedForces’commitments.AwayfromtheUK
theywereinvolvedinoperationsandsupportingactivityin:Afghanistan,theGulf,the
HornofAfrica,theMediterranean,thePacificandAtlanticOceans,WestAfrica,Central
AfricanRepublic,Sudan,thePhilippines,andLithuania.InadditiontheArmedForces
supported:theCommonwealthandInvictusGames,theUKhostedNATOSummitand
deliveredstandingmilitarytasksincludingthecontinuousatseadeterrentandUKquick
reactionandairsurveillanceandcontrol.
Staffing
2.8. Thedeficitofmilitaryfulltimetrainedstrengthincreasedsignificantlyfrom1.4percentofrequirementat1April2013to5.5percentat1April2014.Muchofthischange
wasduetothestrengthfallingbymorethantherequirement.By1October2014,the
gaphadreducedto3.9percentbutthisremainedoutsidemanningbalance.Reducing
ArmedForces’structurestopostStrategicDefenceandSecurityReview2010targetswas
beingachievedthroughadecreaseinpersonnelintake,fewerextensionsofservice,and
redundancies.ThevolunteerReservesgenerallymettheirinitialyearlypersonneltargets,
buttherewereconcernsforthefuture.Duringoralevidence,MODsaidtherecruitment
forbothRegularsandReserveshadbeenchallengingthroughout201314,particularly
fortheArmy,partlyduetotechnicaldifficulties,andmeetingReservestargetsremaineda
concern.Alsoshortagesinsomekeytradesremainedandweweretoldthatthenumber
ofOperationalPinchPointshadincreased.Furtherdetailsofstaffinglevelscanbefound
inAppendix5.
2.9. Thenumberofpersonnelleavingtheregulartrainedstrengthduringthe12monthsto
31March2014was20,190,upfrom20,010ayearearlier,anincreaseofonepercent.
Thiswasasmallincreasecomparedwiththeprevioustwoyearswhenoutflowincreased
by13percentand27percentrespectively.Theredundancyratesacrossthisperiod
were1.3percentforOfficersand3.1percentforOtherRanks.Asaproportionoftotal
outflow,personnelleavingtheServicesthroughredundancyoverthisperiodaccounted
for14percentofOfficersand22percentofOtherRanks.
2.10. Voluntaryoutflowincreasedto4.5percentforOfficersduring2013–14(from3.9per
cent),butdecreasedforOtherRanksto5.4percent(from5.7percent).Thesewere
stillbothabovethetenyearaverageratesof3.3percentforOfficersand5.1percent
forOtherRanks.Supplementaryevidenceonstaffingat30September2014showed
voluntaryoutflowhaddecreasedslightly,to4.3percentforOfficersandto5.3percent
forOtherRanks.AllthreeServicesaremonitoringvoluntaryoutflowclosely,asthese
headlineratesmasksomekeyareasofconcernsuchasengineering.MODshouldtryto
betterunderstandthereasonswhypersonnelchoosetoleavetheArmedForcesearly,
usingdatagatheredfromexitinterviewstoinformpolicyandidentifytrendsearlier.
Motivationandmorale
2.11. WhenconsideringmotivationandmoraleintheArmedForces,wetakeevidencefrom
awiderangeofsourcesintoaccount.Theseincludetheviewswehearfirsthandonvisits,evidencefromtheServiceFamilies’Federations(SFFs),andthe2014ArmedForces
ContinuousAttitudeSurvey(AFCAS).ResultsfromAFCASstatedthatsatisfactionwas
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unchangedcomparedwithlastyearwithbasicpay(39percentsatisfied)andXFactor
(27percent).SatisfactionwithRRP(30percent),pensionbenefits(32percent)and
informationaboutpayandallowances(43percent)fellslightly.Therewasaslight,
butsignificant,increaseinpersonnelwhosaidthatoutsideopportunitiesincreased
theirintentiontoleave(from41percentto44percent).Therewasalsoadropinthe
satisfactionwiththelengthofdeployments(from83percentto79percent).Personnel’s
viewsremainedlargelyunchangedonaccommodation,intermsofstandard(58percent
satisfied),valueformoney(67percentsatisfied)andthequalityofmaintenanceandrepairs(39percentsatisfied).MoredetailontheAFCASresultsissetoutinAppendix5.
2.12. Onourvisits,wefoundthatmanypersonnelfeltworndownbytheconstanttempo,
changeanduncertainty.Spouseemploymentandcareerswereoftenmentionedaskey
concerns.Generally,personnelfeltthatthevalueoftheoverallofferhadcontinuedto
declineinrecentyears,withasignificantnegativecumulativeimpactfromcutsand
changestoallowances,payrestraint,increasestochargesandtherisingcostofliving.
Exampleswereprovidedofgappedposts,placingextrapressureonthosewhoremained
astherequiredoutputwasnotreduced.Alloftheseissuesledtomanypersonnelfeeling
demotivated.
2.13. TheSFFstoldusthatmoralevarieddependingonwhatindividualsweredoing–generallytheclosertooperationsapersonwas,thehighertheirmorale.Theserving
person’smoralewasalsousuallyhigherthanthatoftheirfamilies.MoraleintheArmy
inparticularwasreportedaspoor.Personnelwereexhaustedanddidnotseethe
inconvenienceandstresstheyexperiencedmatchedbytherewardtheyreceived.
2.14. Wenoticedarealshiftinhowpersonnelandfamiliesexpressedtheirfeelingson
motivationandmoraletousinthisround.Whilepeoplethoughtthatthedemotivating
factorssuchaspayrestraint,uncertaintyandoverstretchweretemporary,theywere
relativelysanguineaboutthem.However,assuchissuesappearmorelikelytoendure,
therehasbeenacorrespondingnegativeimpactonmoraleandmotivation.We
encourageMODtocontinuetomakeeffortstoimproveresponseratestoAFCASand
relatedsurveys,toenableittobetterunderstandthemoraleandmotivationofService
personnel,providefeedback,andtakeappropriateaction.
Workload
Operational and other commitments
2.15. ThenumbersdeployedonAfghanistanoperationsreducedfromaround6,000inApril
2014toaround2,000inearlyNovember2014.Thetotalnumberofmilitarypersonnel
deployedoverseasgloballyonoperationsinearlyNovember2014wasaround5,500
personnel,areductionfromaround7,200inApril2014.
2.16. HarmonyGuidelinesaimtoensurebalancebetweencompetingaspectsofthelives
ofServicepersonnel,including:operations,timerecuperatingafteroperationaltours,
personalandprofessionaldevelopment,unitformationtrainingandtimewithfamilies.
EachServicehasslightlydifferentHarmonyGuidelines,reflectingdifferentpracticesand
requirements.Theguidelinesare:660daysawayinathreeyearrollingperiodforthe
RoyalNavy(RN);498daysawayfortheArmy;and468daysfortheRoyalAirForce(RAF).
Highoperationaltempoinsomeareas,togetherwithshortnoticepostingsforsome
personnel,mademeetingtheguidelineschallenging.Onaverage,breachesofharmony
remainedrelativelysteadyforallServicesoverthemostrecentquartersreported.
However,forsomeindividualsinspecificgroupswhowereinhighdemand,guidelines
wereregularlybroken.
2.17. Weheardthatmanypersonnelfeltworndownbythehightempo,changeanduncertainty.Personnelatalllevelscouldnotseeanendtothesituation,whichwascause
forconcernwhentheArmedForceswereduetobeenteringaperiodofrelativecalm
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andcontingency.Weheardmanymorereportsofpersonnelbeingonshortnoticeto
movethanonanyofourpreviousvisitprogrammes.Dependingonthenoticeperiod,
personnel’smovementwaslimitedandtheirabilitytoleavecamporventurefarfrom
theirhomeswasrestricted.Itwasnotalwayscleartousifthiswasalwaysnecessary,
especiallyasitcouldcauseconsiderabledisruptionforpersonnelandtheirfamilies.Many
personnelthoughtthattheyshouldreceivesomeformofcompensationforbeingon
shortnoticetomoveforextendedperiods.
Working hours
2.18. EvidencereceivedfromMODrelatingtoworkingpatternsshowedthatoveralltherehad
beenaslightreductioninworkinghoursacrosstheServices.Theaveragenumberof
workinghoursforArmedForcespersonneldecreasedsignificantlyby2.7hoursto45.2
hoursperweekin2013–14(from47.9hoursin2012–13).Unsociablehours2workedfell
slightly,andaverageweeklydutyhours 3alsodecreasedto65.3hours(from70.7hours).
Therewasadecreaseofpersonnelworkingexcessivehourstosevenpercentin2013–14
(fromninepercentin2012–13).However,onvisitspersonnelsuggestedthattherewas
adisconnectbetweenthisevidenceandthehourstheyactuallyworked.Comparable
civiliandataforfulltimeemployees(medianworkinghourstakenfromtheAnnual
SurveyofHoursandEarningsatApril2013)were37.5basichoursplus3.9hourspaidovertime,largelyunchangedfromthepreviousyear.TheArmedForcesareexemptfrom
theWorkingTimeDirective.
2.19. Personnel‘atsea’oron‘overseasoperations’typicallyworklongerhoursthantheir
UKbasedcolleagues.DataprovidedbyMODfor2013–14showedtheRNaveraged
63.1 hoursperweekwhenatsea,0.7hoursmorethanthepreviousyear.TheArmy
averaged66.3hours(downfrom72.9)andtheRAF69.3hours(downslightlyfrom69.4)
whenonoverseasoperations.
2.20. Surveysprovideuswithimportantinformationtoaidourdeliberationsandcontribute
tothegatheringofmanagementdataforMOD.Whiletherewasanincreasedresponse
tothe2013–14WorkingPatternsSurveycomparedwiththepreviousyear;theratewasonly26percent.WeencourageMODtoexaminemethodstoachieveahigherresponse
rateacrossallsurveystoimprovethequalityandquantityofdata.
National Minimum Wage
2.21. WhileArmedForcespersonnelremainexemptfromNationalMinimumWage(NMW)
legislation,MODaimstoactwithinitsspirit.DatafromtheWorkingPatternsSurveyonthe
numberofhoursworkedperweekenableustoconsiderwhether,despitetheexemption,
somepersonnelmightbeearningbelowNMWrates.JuniorRanks,acrossallServices,
workedonaverage42.6hoursperweekduring2013–14(downfrom46.5forlastyear).
WhenappliedtothebasicpayofJuniorRanksonthelowestlevelofpayrange1fromApril
2014(£17,945)wecalculatethatthisequatestoanhourlyrateof£8.08.ThiscompareswiththerelevantNMWfiguresof£6.31perhourforthoseagedatleast21and£5.03per
hourforthoseaged1820,anditisanincreasefromthecalculatedhourlyrateof£7.33for
JuniorRanksayearearlier,asaresultofthedecreaseinreportedhoursworked.
2.22. Asthenumberofhoursworkedbypersonnelisvariable,wealsoconsideredwhether
itwaspossibleforthoseonthelowestpayleveltobeearningbelowNMWlevelsif
theyworksignificantlyinexcessoftheaveragerecordedhoursperweek.Asmightbe
expected,thenumberofhoursworkedwasmuchhigherforthosepersonnelonoverseas
2 Unsociablehoursaredefinedasanyhoursworkedbetween00:00and06:00MondaytoFriday;between18:00and24:00MondaytoFridayandanyhoursworkedonSaturdayorSunday.
3 Timespentworking,oncallandonmealbreaks.
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operationsoratseaforlongperiodsoftime.However,suchserviceattractsLonger
SeparationAllowanceinadditiontobasepaywhichwebelievemitigates,orremoves
altogether,anypotentialimpactofthehourlyrate.
Leave arrangements
2.23. In2013–14personnelhadanaverageIndividualLeaveAllowance4entitlementof
51.3 days,downfrom56.3daysin2012–13.Thisdecreasewaspartlyduetothelowerannualleaveallowancecausedbythechangesinthenumberofbankholidaysfor
2013–145.Ofthisentitlement(2012–13figuresinbrackets):
• 41.7dayswereused(44.9days);
• 8.2dayswerecarriedforward(9.5days);
• 1.3dayswerelost(1.9days);and
• SomeelementofILAwaslostby15percentofpersonnel(20percent).
2.24. AFCASresultsfor2014foundthat70percentofpersonnelweresatisfiedwiththeir
overallleaveentitlement,broadlysimilartoin2013(72percent).Fiftyfourpercent
weresatisfiedwiththeamountofleavetheywereabletotakeintheprevious12months,downfrom58percentin2013.Only38percentofpersonnelweresatisfiedwiththe
opportunitytotakeleavewhentheywished,unchangedfromthepreviousyear.Data
collectedviatheWorkingPatternsSurveysuggestedthat45percentofpersonnelhad
tochangeapprovedperiodsofleaveforServicereasons,comparedwith47percentin
2012–13.Thirtyfivepercenthadtochangeleaveonceortwice;andninepercenthad
tochangeleavethreeormoretimes.
Paycomparability
2.25. Ourtermsofreferencerequireusto“haveregardfortheneedforthepayofthe
ArmedForcestobebroadlycomparablewithpaylevelsincivilianlife”.Whileitisoften
difficulttofinddirectciviliancomparatorsformilitaryroles,weseepaycomparabilityasimportantinensuringtheArmedForcespayenoughtorecruit,retainandmotivatethe
qualitypersonneltheyneed.Itisjustoneaspectofouroverallevidencebaseonwhichto
baserecommendationsonremunerationfortheArmedForces,andwemakejudgements
basedonalltheevidencewereceive.
2.26. LastyearwecommissionedPwCtocomparepaylevelsintheArmedForceswiththose
incivilianlife.ThisyearweaskedPwCtoproduceanupdatedversionofthosefindings,
ComparisonsofPayintheArmedForcesandtheCivilianSector6andwesummarise
themainresultshere.
2.27. Wealsocontinuedourpracticeofconsideringcomparisonsbetweenremuneration7
forArmedForcespersonnelwiththeirfulltimeciviliancounterpartsusingtheAnnualSurveyofHoursandEarnings(ASHE)toprovideanindicationofthepayofbroadcivilian
counterparts,onthebasisofage.WeagaincomparedArmedForcesgraduatesalaries 8for
thefirstthreeyearsofservicewithgraduates’salariesinotherpublicsectorprofessions,
andundertookresearchintothelabourmarketandpaycomparisonsforengineers.
4 ComprisesAnnualLeaveAllowance,SeagoersLeave,PostOperationalLeaveandAuthorisedAbsence.Doesnot
includerestandrecuperation,reengagementleaveandrelocationleave.5 2012–13hadanextrabankholiday(theQueen’sDiamondJubilee)andanearlyGoodFridaywhile201314didnot
includeGoodFriday.6 Availableat:https://www.gov.uk/government/organisations/officeofmanpowereconomics
7 ArmedForcespayadjustedtoexcludeXFactorandforcomparativepensionvalue(basedonthePwCpensionvaluationin2012).Thisistheapproachthatwehaveappliedinpreviousyears.
8 AsforouryearlyASHEcomparisonsthisalsousesArmedForcespayadjustedtoexcludeXFactorandforpensions.
9
https://www.gov.uk/government/organisations/office-of-manpower-economicshttps://www.gov.uk/government/organisations/office-of-manpower-economics
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PwC report: Comparisons of pay with the civilian sector
2.28. Lastyear,PwCconductedacomparisonofpaybetweenmembersoftheArmedForces
andcivilianroleswhichwereconsideredtobeofcomparablejobsize(orweight),even
iftheroleswereverydifferentinnature.Thisyearweaskedthemtoupdatethatworkto
reflectanychangestopayintheArmedForcesandintheciviliansector.
2.29. PwCconcludedthat,overall,thepicturewasbroadlysimilartothatreportedlastyear.
ArmedForces2014salaries(excludingXFactor)9werebroadlycomparablewiththoseintheciviliansector.ThereportprovidedseparatecomparisonsforOfficersandOther
Ranks:10
• ThemidpointofeachoftheOfficersbasepayrangewasclosetothemedianof
theciviliansector.Ifallowancesandincentivepaywereincluded(‘totalcash’),11
thenthecomparativevalueoftheOfficers’remunerationfellanditwasbelow
themedian,sometimessignificantlyso.12(Thisreflects,inpart,theavailabilityof
significantcashincentivesintheprivatesector.)
• ThemidpointofeachoftheOtherRanksbasepayrangewasgenerallyabovethe
medianoftheciviliansector.13Ifallowancesandincentivepaywereincluded(‘total
cash’),thenthevalueoftheOtherRanks’remunerationwasclosertothemedianoftheciviliansector.
ForbothOfficersandOtherRanks,bothbasepayandtotalcashcomparedmore
favourablywiththoseforcivilianpublicsectorjobsthanwiththoseforcivilianprivate
sectorjobs.However,hoursworkedbyServicepersonnelmaybewellinexcessofthose
oftheircomparatorswhichwouldmeanthatpayperhourcomparedlessfavourably.
2.30. ThePwCreportalsorevisitedtotalrewardcomparisonsusingtheresultsfromthepension
valuationfrom2012.14Theseanalysesindicatedthat,overall,ArmedForcestotalreward
wasbroadlycomparablewithciviliantotalrewardforbothOfficersandOtherRanks.
Comparisons with data from the Annual Survey of Hours and Earnings2.31. WecomparedthepayofArmedForcespersonnel15withtheirfulltimecivilianemployee
counterpartsinthesameagegroup,asrecordedinthe2013ASHE.16Comparisonswith
the2013ASHEdatashowedthat,asmilitaryrankincreases,sodoesbasepay(adjusted
toexcludeXFactorandforpension)relativetociviliansalaries.
• ForaPrivateonthehigherband,annualweeklybasepayisbetween£308(level1)
and£465(level7);thiscompareswithacivilianmedianof£329forthesameage
group.
9
ThesewerenotadjustedforpensionasPwCcarriedoutaseparatetotalrewardcomparison.10 Asforpreviouspaycomparabilityresearch,PwCfocusonhigherpaybandsalariesforOtherRanksasthemajorityof
personnelwereinthisband.11 TotalCashisthetotaldirectamountreceivedbytheincumbentinagivenyearandwillincludeannualbase
salary,contractualallowances(relatedtostatusofthejob)andanyincentiveaward(e.g.bonus,profitshare,sales
incentive)thatmayhavebeenmadeinthegivenyear.Itdoesnotincludeovertimeorshiftpremiainthecivilian
sector.12 Itfallsbetweenthemedianandthelowerquartile(ie.thesalarybelowwhichonly25percentofthecomparative
civiliansectorfalls).13 Itfallsbetweentheupperquartile(ie.thesalaryabovewhichonly25percentofthecomparativeciviliansector
falls)andthemedian.14 Thiscanbefoundat: https://www.gov.uk/government/publications?departments%5B%5D=armedforcespay-
reviewbody15 ArmedForcespayadjustedtoexcludeXFactorandforpensions(basedonthemostrecentpensionvaluationwhich
variedbyrank).Thisistheapproachthatwehaveappliedinpreviousyears.16 Weusedthe2013ASHEtosupportouranalysisbecausethe2014ASHEwasnotavailableatthetimeofour
deliberations.
10
http:///reader/full/sector.13http:///reader/full/sector.13https://www.gov.uk/government/publications?departments%5B%5D=armed-forces-pay-review-bodyhttps://www.gov.uk/government/publications?departments%5B%5D=armed-forces-pay-review-bodyhttp:///reader/full/sector.13https://www.gov.uk/government/publications?departments%5B%5D=armed-forces-pay-review-bodyhttps://www.gov.uk/government/publications?departments%5B%5D=armed-forces-pay-review-body
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c
• ForaSergeantonthehigherband,therangeis£570to£643weeklybasepay
comparedwithacivilianmedianof£562forthesameagegroup.
• ForanOF1therangeisbetween£284and£577weeklybasepayandthiscompares
withacivilianmedianof£402forthesameagegroup.
Graduates in public sector professions
2.32. TheinformationwereceivedaboutgraduatepayshowedthatthestartingsalaryandearlypayprogressionforthoseenteringtheArmedForcesasdirectentrantstotheOfficer
cadrecomparedfavourablywiththatforotherpublicsectorprofessions.AsTable2.1
shows,afteradjustmentsforXFactorandpensions,anArmedForcesOfficerreceived
higherstartingpaythanadoctor,nurse,teacher,orpoliceofficerbutlessthanafast
streamcivilservant.Inaddition,salaryprogressionfortheArmedForcesOfficermeans
thatafterthreeyears,theArmedForcesentrantmightexpecttobepaidmorethanany
oftheseotherprofessions.MostdirectentrantOfficersaregraduates,thoughitshould
benotedthataproportionisdrawnfromnongraduateswhohavedemonstratedequal
leadershippotential.ItisalsoimportanttorecognisethatmanygraduatesjointheOther
Ranksasenlistedpersonnel.Thereisnospecificgraduateentryschemetothepolice
service.Thusthepolicesalariesquotedinthetablearepaidsolelyonthebasisofservice,regardlessofeducationalqualifications.
Table2.1:Graduatepayofpublicsectorprofessionsin2014a
Graduate Graduatepayafter:
startingpay 1year 3years
FastStreamCivilServant(BIS)b 27,000 27,250 27,750
ArmedForces’officerc 23,282 27,984 35,862
Doctor d 22,636 28,076 31,838
Teacher e 22,023 23,764 27,650
NHSNurse f 21,388 22,016 23,825
Policeofficer g 19,383 22,443 24,483
Notes:a ArmedForcespayadjustedtoexcludeXfactor(/1.145)andforpensions(x1.057)asforlastyear.bFiguresarenationalAug2014salariesassumingsuccessfulperformance(andthatthecurrentstepsof
£250applyinthenewstructurethisyearstillunderdevelopment).
AssumesstartingatOF1Level5andprogresstoOF2after3years.dHospitaldoctorsinEnglandexpectto progressfrom FoundationYear1 to FoundationYear2 afterone yearandthentoSpecialtyRegistrarafter asecondyear.
e OutsideLondonandassumessatisfactoryperformance.Thepaysystemforteachershaschanged followingtheintroductionofperformancerelatedpayandgreaterdiscretionforschools.Thismeansthattheoldframeworkofintermediatepointsisnolongerstatutoryalthoughschoolsmayusethemasa
guide.Ratesat1Sep2014. f AgendaforChangeEnglandpayratesatApril2014.g Thisisthenewentrypayforconstables,England&WalesfollowingtheWinsorreview.Theentrypay
canbeflexedupto£22,443byforcesiftherethatarelocalrecruitmentneedsortheofficerpossessesapolicingqualification(asdefinedbythechiefofficer)orrelevantexperience(suchasservingasaSpecialConstable). Ifsomeoneenterson£22,443thepayafter1and3yearswouldbe£23,460and£25,503respectively.Excludesovertimepayments.Ratesat1Sep2014.
11
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Engineer research
2.33. TheArmedForceshavefacedchallengesinretainingengineersinrecentyears.Inorder
tounderstandbettertheissuesaroundthisgroup,welookedatthelabourmarketfor
engineersandconsideredpaycomparisonsbetweenengineersintheArmedForcesand
incivilianlife.
2.34. InformationgatheredfromvarioussourcesconfirmsthattherehasbeenaUKwideshortageofengineersinrecent years.17Causesincludeanagingdemographicof
engineers,18“STEM”skillsgap19andadecreasinglabour force.20Thisskillshortageand
“marketpull”forengineerswithhightechnicalskillshasbeenreflectedinrelativelyhigh
engineerVOratesacrosstheArmedForces.
2.35. InformationfromMODhighlightedanumberofengineeringtradesinthemilitarywhich
wereexperiencingshortfallsinstaffing.TheseexistedinallthreeServices,butwere
predominatelyintheNavalService.Approachestomanagingretention,suchasFinancial
RetentionIncentives(FRIs),havebeenintroducedtemporarilytoalleviatetheproblem,
withvaryingsuccessacrosstherelevantgroups.
2.36. Weconsideredevidencefromanumberofpaysourcesincluding:comparingASHEage
rangepaydatafortechnicalengineersinthecivilianmarketwiththepayofengineers
intheArmedForces;reviewingqualitativeinformationofjobandpersonspecifications
providedbyMOD;andlookingatpaydatafromtheEngineeringCouncil(2013)survey
whichprovidedaveragepayrangebyagefordifferentengineeringtrades.These
comparisonssuggestedthatcivilsectorengineersaregenerallyofferedmorecompetitive
salariesthanengineersintheArmedForces.However,caremustbetakentoconsiderthe
employmentpackageasawholeastherearemanybenefitsavailabletoArmedForces
personnelthatdonotapplyoutside(forexample,themilitarypensionandaccessto
subsidisedaccommodation).
2.37. Wewillcontinuetokeepthisimportantareaunderreview,continueourresearchand
offerappropriateadvicetoimprovethesituation,tohelptoprotectthesignificantinvestmentmadebytheServicesinengineering.
DiversityandinclusivityintheArmedForces
2.38. InpreviousReportswehavestressedourviewthattheArmedForcesshouldbe
representativeofthesocietytheydefend,recruitfromthewidestpossiblepooloftalent,
andenableallindividualstofulfiltheirpotential.Inour2014ReportweaskedMOD
tokeepusinformedofprogress,particularlyinrelationtotherecruitment,retention
andcareerprogressionofwomen,andofUKBlack,AsianandMinorityEthnic(BAME)
groups.MODacknowledgedthattheArmedForces’compositiondidnotreflectthe
demographicsoftheUKworkforceandthatitcouldbeincreasinglydifficulttodeliver
defenceoutputswithouttakingactiontobemoreinclusive.
2.39. Whilemakingupsome50percentofthepopulation,womenformlessthan10percent
ofUKRegularForcespersonnel.Figuresarelargelyunchangedfromlastyear.TheRAF
hasthelargestproportion(ataround14percent),theArmyhasthesmallest(justunder
ninepercent)andtheRNhasninepercent.ThefigureisslightlyhigherforReserveswith
womenrepresentingaround14percentofallvolunteerReserves.
17 MigrationAdvisoryCommittee(2013).Skilledshortagesensible:Fullreviewoftheshortageoccupationlistsforthe
UKandScotland.MigrationAdvisoryCommittee,London.February2013.18 UK’slargestindependentaerospaceanddefencecompany,deliveringengineering,supportsolutionsandservices;
http://marshalladg.com/aeropeople/19 DIUS(2010).TheDemandforScience,Technology,EngineeringandMathematics(STEM)Skills.London:
DepartmentofInnovation,UniversitiesandSkills(nowDepartmentforBusiness,InnovationandSkills).20 BISdatasources.SeealsothePerkinsReviewofEngineeringSkills:www.educationforengineering.org.uk/
perkinsreport
12
http:///reader/full/years.17http:///reader/full/years.17http:///reader/full/force.20http:///reader/full/force.20http://marshalladg.com/aeropeople/http://www.educationforengineering.org.uk/perkinsreporthttp://www.educationforengineering.org.uk/perkinsreporthttp:///reader/full/years.17http:///reader/full/force.20http://www.educationforengineering.org.uk/perkinsreporthttp://www.educationforengineering.org.uk/perkinsreporthttp://marshalladg.com/aeropeople/
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2.40. MODtoldusthatthenumberofwomeninSeniorOtherRankandSeniorOfficer
positionswasincreasing,albeitslowly.Examplesincluded:twowomenintheRN
commandingwarships;therecentselectionofthreefemaleArmyColonelsforpromotion
toBrigadier;andtwofemaleRAFpersonnelpromotedintotwostarappointments.
Despitetheopeningupofmorerolestowomen,suchastheliftingofrestrictionsto
womenservinginsubmarines,theyremainexcludedfrom30percentofArmyposts,
21percentofRNpostsandsixpercentofRAFposts.MODacknowledgedthese
restrictionsgiveanegativeimpressionoftheArmedForcesasaninclusiveemployerandcouldrestrictthecareerprogressionofwomen.MODhighlightedtheSecretaryofState
bringingforwardthereviewoftheexclusionofwomenfromgroundclosecombatroles
which,dependingonthefindings,couldopenupmorerolestofemalepersonnel.
2.41. TheSecretaryofStatetoldusthattheArmedForcesrecognisedtheyneededtobe
morereflectiveofthesocietytheydefendandthattheDefenceDiversityandInclusion
Programme(DDIP)hadbeenestablishedwiththisasitsmainaim.Heacknowledged
thatmorewomenthanmenobtainedfirstdegrees.Farfewerwomenthanmenjoined
theArmedForcesbuttheywerenotrisingthroughtheranksasquicklyasmenand
thatMODmustconveythebenefitsofacareerintheArmedForcesmoreeffectivelyto
women.
2.42. Only2.9percentofallUKRegularForceswerefromUKBAMEbackgroundsat1April
2014(risingto3.0percenton1October2014).BAMEpersonnelofallnationalities
madeup7.1percent.OfthethreeServicestheArmyhadthehighestrepresentation
ofUKBAMEpersonnelwitharound3.5percentinApril2014,followedbytheRNand
theRAFwhobothhadjustunder2percent.Onlyjustover2percentofArmedForces
OfficerswerefromBAMEbackgrounds,witharound93percentofthistotalbeingUK
BAME.ThehighestproportionofBAMEpersonnelwereatthelowerOtherRanks.
2.43. TheChiefofDefenceStaff(CDS)acknowledgedtheimportanceofbeingabletorecruit
personnelfromUKBAMEbackgrounds,astheArmedForces’maintargetpopulation
is16to24yearolds(18percentofwhomarefromBAMEbackgrounds).TheChief
ofDefencePersonnel(CDP)emphasisedtheworkbeingdonebytheArmedForcesin
engagingwithmembersofBAMEcommunitiesatalllevelstobuildtrustandimprove
understandingtotrytoencouragetheyoungmembersofthesecommunitiestoconsider
acareerintheArmedForces.
2.44. TheabilitytoattractandretainfemalepersonnelandpersonnelfromBAME
backgroundsshouldbeespeciallyimportanttoDefenceMedicalServices(DMS)given
thedemographicprofileofthoseinterestedincareersashealthcareprofessionals.For
example,morethan50percentofentrantstomedicalschoolsarefemale.Wewere
disappointedwiththeapparentlackofactionondiversityandinclusivityinDMS.The
natureoftheworkinDMS,andreadacrosstoNHSroles,couldprovideopportunitiesto
trialalternative,moreflexible,waysofworkingtoencouragetherecruitment,retentionandcareerprogressionofDMSpersonnel.
2.45. Thecollectionanduseofdiversitydataisintegraltoaneffectiveequalitystrategy.While
improvedoverpreviousyears,wewouldwelcomesightofmoregranularstatisticaldata
withmoreinformationonhowMODusessuchdata.WewouldliketoseemoreonUK
BAMEpersonnel,withbreakdownsprovidedbyethnicgroup.Suchdataarenecessaryto
underpinimprovementstorepresentationbyUKBAMEpersonnelintheArmedForces.
MODshoulddevelopaconsistentapproachtomonitoringandreportingdiversity
statistics,withastrategyfordisseminationandpublication.
2.46. WewelcomethehighprioritygiventotheDDIPbytheDefenceBoardandthe
commitmentofCDSandServiceChiefstodeveloptheleadershipcapacityrequiredto
drivechangeandcreateamoreinclusiveculturethroughouttheArmedForces.MOD’s
evidencedetailedsomepositiveinitiatives,withtheRNtakingactiontoencourage
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womenbackintotheworkforceaftertakingmaternityleave;theArmymakingthe
tacklingofharassmentandbullyingahighpriority;andRAF’sworktowardsimproving
therecruitmentandretentionofBAMEindividuals.Initiativesinrelationtogender
andsexualorientationissueshavealsoreceivedfavourablerecognitionfromexternal
organisations.Theseareallencouragingsigns.
2.47. Thereisstillalongwaytogo,however,inincreasingtherepresentationandprogression
ofwomenandBAMEindividualsintheArmedForces.Thereshouldbeindividualactionplansforwomenandforeachethnicgrouptodrivechangeandexamplesofbest
practiceshouldbeadopted.Wefeelthatthereneedstobeaculturalshifttoprovidean
environmentwherewomenandBAMEindividualswanttoworkandwheretheyhave
theopportunitytoprogressandreachtheirfullpotential.TheNewEmploymentModel
providesanopportunitytoensurethatthetermsandconditionsofservicehelptoenable
this.
2.48. Itiscriticalthattheresponsibilityandaccountabilityfordeliveringondiversityand
inclusivityremainsownedandledbyCDSandtheServiceChiefstoensureprogress
continuestobemadebysupportingotherproactiveapproachessuchasflexibleworking,
tohelptoretainwomenandBAMEpersonnel.Therealsoneedstobemoreinformation
onmentorsanddiversitychampions,ashighlightedinour2014Report.WeexpectandlookforwardtoMODkeepingusupdatedonprogresstowardsamorediverse,inclusive
andrepresentativeUKArmedForces.
2.49. MODtoldusthatthecomplaintssystemprovidesinsightintothediversity,fairness
andinclusionissuesServicepersonnelface.ThisyearwealsospokewiththeService
ComplaintsCommissioner,whoemphasisedtheimportanceofpersonnelbeing
confidentthatanycomplaintwouldbetakenseriously,dealtwithquicklyandthataction
wouldbetaken.Sometimespersonnelcanbereluctanttomakeacomplaint.Complaints
byrankandServiceweremonitoredbytheServiceComplaintsCommissionerandthe
Armywasduetoundertakeasurveyonsexualharassment.Whilewewelcomethe
introductionoftheArmedForces(ServiceComplaintsandFinancialAssistance)Billand
thenewombudsmantospeedupthecomplaintsprocessandmakeitmoretransparent,
weurgeMODtoensurethat,inadditiontoprovidinginsightintotheissuesfacedby
personnel,suchissuesareaddressedinaconstructivemannerandasquicklyaspossible.
2.50. WewerepleasedtoreceiveapresentationupdatingusonprogressontheArmedForces’
Covenant.TheCovenantaimstoensurethatServicepersonnelandtheirfamiliesface
nodisadvantagecomparedwithothercitizensintheprovisionofpublicandcommercial
services.WeheardthatmostlocalauthoritieshavesigneduptoaCommunityCovenant,
whichaimstoencouragelocalcommunitiestosupporttheArmedForcesintheirarea
andpromoteunderstandingandawarenessamongthepublicofissuesaffectingthem.
Anew£10mperyearfundisduetocomeonstreamin2015,andthePrimeMinister
reemphasisedhiscommitmenttotheCovenantataneventinJuly2014.Duringoralevidence,theSFFstoldusthattheythoughttheCovenantwasstillverymuchawork
inprogress.WhiletheyrecognisedtheCovenantcouldnotsolveallproblems,itwas
apositivestep,andhavinglocalauthoritiessignedupincreasedawarenessofthe
circumstancesofServicefamilies.Wewelcometheworkdonesofaronimplementingthe
Covenantandreducingdisadvantage,suchasthepupilpremiumandchangestothewar
widows’pension.However,awarenessremainslow,evenamongServicepersonneland
theirfamilies,somoreneedstobedoneoncommunication.Welookforwardtoseeing
moreprogressinthenearfuture.
2.51. Oneissuefrequentlyraisedonvisitswasthedisparitybetweenthetreatmentofmarried
andsingleServicepersonnelwhenservingintheUKandoverseas.Complaintswere
mainlyinrelationtothedifferenceintheamounttheywereabletoclaimforthesameallowances.DisturbanceAllowancewasthemostcommonlycited,withsinglepersonnel
onlyentitledtoclaimaroundatenthoftheamountmarriedpersonnelcouldclaim.There
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werealsoissuesaroundaccommodationentitlementrelativetomodernfamilystructures.
WesuggestagainthatMODreviewsitspoliciestoensurethereisnounjustifiablebias
towardseithermarriedorsingleServicepersonnel.
ReserveForces
2.52. WemakeourrecommendationonReserves’BountiesandCallOutGratuityinChapter3.
However,astherehasbeenincreasedfocusonReserveForcesaspartoftheoverallfuturevisionunderthe‘WholeForce’concept,withsomechangesmadeandmoretofollow,
wecoversomeoftheseissueshere.MODaimstoincreasethesizeoftheReserveForces
from22,500inOctober2014to35,000trainedpersonnelbyApril2019.Theintention
isfortheReserveForcestocomplementtheRegularForces,providingadditional
capacityandcertainspecialistcapabilities.TheArmyReservehasthelargesttask,having
tomovefromatrainedstrengthof19,000to30,000.Ourvisitsincludedawideand
variedselectionofReserveestablishmentsandwespokewithmanyReservists.Themain
challengestheytoldusaboutincluded:recruitment;retention;pairingandintegrating
withRegularunits;training;administrationandJPA;taxaffairs;andemployerrelations.
MODandtheArmedForces’CovenantReferenceGroupshouldexplorewithHMRCthe
creationofadedicatedhelpline/supportunit,toassistReservistsinmanagingthetax
implicationsarisingfromtheirservice.
2.53. MedicalReserveswereparticularlyconcernedoveremployerrelationsandstatedthatthe
NHShadbecomeincreasinglyreluctanttoreleasestafffortheirReservetrainingandthat
manyReservistswerenowusingtheirannualleaveforsuchtraining.MedicalReserves
wereheldinhighregardbyotherServicepersonnelastheywereusedtoprovidinga
highstandardofmedicalcareonadailybasisintheircivilianroles.Somequestioned
whethertheoverallpackagewassufficienttoattractandretainsuitableReserve
personnel,whileothersthoughtitcouldbedetrimentaltoretentionintheRegularsif
thepackagewastooattractive.SomeReservistsfeltthatopportunitieswerebeingtaken
awayfromthemasexRegularswererecruitedintokeyposts,soremovingavenuesfor
promotion.
2.54. MostReservistswespoketothoughtthattheequipmenttheyusedwasimproving,
althoughthereweresomenotableexceptions.Oneissuethatdidsurpriseuswasthe
supportavailabletoReservistsatweekends.Atsomesitescateringwasverylimitedwhen
Reservesweretraining.Worryingly,therewerealsosometimesproblemsinaccessingkey
trainingequipmentduetoMODcontractsonlycoveringweekdays.CDPlaterassuredus
thatequipmentandcateringfacilitieswouldbeavailablefortheReserveswehadvisited,
aslongastheyprovidedsufficientnotice.
2.55. WereceivedinformationfromthefirsttriServiceReservesContinuousAttitudeSurvey
(ResCAS).Themainpointsincluded:
• 73percentweresatisfiedwithReservelifeingeneraland77percentsaidtheyfelt
motivatedtodothebestjobtheycouldfortheReserves;
• only28percentfeltvaluedbyRegularswhilst49percentfeltvaluedbysocietyin
general;
• 69percentofthoseemployedsaidtheiremployersupportedtheirservice;
• 60percentweresatisfiedwithpay,73percentwiththeannualbountybutonly
42percentwiththeexpensesallowance.
2.56. WewereconcernedthatFullTimeReserveService(FTRS)personnelgaveusanumber
ofexamplesofthepossiblemisuseofFTRScontracts.Therearethreedifferentlevels
ofcontract,withmanyfeelingthattheyhadbeentakenonatthelowest(cheapest)level(HomeCommitment)yetwerebeingaskedtodothedutiesofhigherlevel
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commitments,especiallywherethereweregapsinRegularposts.Thenumberand
consistencyofsuchcommentssuggestthatMODneedstolookatthisareawithsome
urgency.
2.57. WeaskedMODabouttherecruitmentandretentionofReserves.Whilechallenging
recruitmenttargetshadbeenset,therewerefourmoreyearstomeetthem.Some
changeshadalreadybeenmadetotherecruitmentprocesstospeeditup,suchastaking
moremedicalriskbyacceptingnewjoinersaheadoftheirmedicals,andsomeotherissuesaroundArmyReserverecruitmenthadbeenresolved.Improvementshadbeen
madetothemarketingoftheReservesofferandReserveunitswereencouragedtocarry
outtheirownmarketingcampaignsintheirlocalareas.Targetsweregenerallybeing
met,buttheywouldremainaconsiderablechallengeoverthenextfewyears.
2.58. Theproblemofaccessingtrainingequipmentandfacilitiesonweekendswasattributed
tolegacycontractswhichshouldberesolvedastheywererequired,althoughDIO
statedthatdatawouldbeneededtojustifythecosteffectivenessofcateringprovision
attheweekendsonmilitarybases.CDSacceptedthattherehadpreviouslybeenunder-
investmentinReserveForces,anditwouldtakesometimetoredressthis.
2.59. Duringthecourseofthisyear,weendorsedtwoFinancialIncentivesaimedatencouragingrecruitmentandretentionofexRegularstotheArmyandRAFReserve.The
firstextendedandimprovedtheschemefortheArmyReservethatwerecommendedin
our2013Report.TherevisedArmyReserveCommitmentBonusextendedeligibilityout
to31March2017,anddoubledthetotalvalueoftheschemeto£10,000.Therevised
schemealsoofferedanewReservistEnlistmentPaymentof£300toArmyrecruitsfrom
1January2014to30March2017andanewReservistTrainingCompletionBonusof
£1,000attheendofphase1and£1,000attheendofphase2training.Wereported
onthisinourletterof27March2014,publishedontheOMEwebsite.InOctober2014,
weendorsedasimilarschemefortheRAFReserve,aimedatrecruitingandretainingex
Regulars.
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Chapter3
PAYANDALLOWANCES
Werecommendthat(from1April2015unlessotherwisestated):
• allratesofbasepaybeupliftedbyonepercent;
• RecruitmentandRetentionPaymentratesbeheldforthosereceivingRRP
(MountainLeader)andRRP(ParachuteJumpingInstructor);
• unlessspecifiedseparately,allotherratesofRRPbeincreasedbyoneper
cent;
• fullreviewsofRRP(MountainLeaders),andRRP(Flying)beconductednext
year;
• RRP(AeromedicalandEscortDuty)isfrozeninadvanceofitswithdrawal;
• theSubmarineGoldenHelloschemecontinuesatitscurrentrate;RRP
(Submarine)beupliftedinlinewiththepayawardwithachangetothe
pointatwhichthehighestbandispaidwhenpersonneltakeuptheirmost
seniorsea-goingrolesfrom1April2017;thesinglerateofRRP(Submarine
Supplement)changestotwobands(£5.00perdayforpersonnelassigned
tooperationalsubmarinesand£15.00perdayforpersonnelwhentheyare
embarkedatsea);RRP(NuclearPropulsion)forORsmovestoadailyrate
of£3.00forCategoryC;£6.00forCategoryB;£12.00forCategoryB2and
£40.00forCategoryA2;CategoryA1RRP(NuclearPropulsion)changesto
adailyrateof£12.00forpre-ChargeOFsand£20.00forChargeandpost
ChargeOFsfrom1April2016;asubmarineEngineerOfficers’Supplement
beestablishedforOFsservingatseaatdailyrateof£10.00forpre-Charge
Officersand£20.00forthoseinChargeappointments;
• thethreeexistingCommitmentBonusschemesshouldremainastheyare
untilamorefundamentalreviewofCommitmentBonuseshasbeencarried
outbyMODbytheendof2015;
• theNorthernIrelandResidents’Supplementbeincreasedbyonepercent;
• anewMineCountermeasuresVesselsEnvironmentalAllowancebe
introducedatarateof£3.43perday;
• ExperimentalTestAllowanceshouldcontinue,andthattherateshouldbe
increasedeachyearinlinewiththeannualpayawarduntilournextreview;
• Reserves’BountiesandCall-OutGratuitybeincreasedbyonepercent;
• theproposedFinancialRetentionIncentiveforREMEAircraftTechniciansat
CorporalClassOnelevelbeimplemented(from1October2014);
• allratesofcompensatoryallowancesnotreviewedseparatelybeincreased
byonepercent.
Introduction
3.1. Thischaptersetsout(i)ourrecommendationontheoverallpayawardfortheArmed
Forces,(ii)ourrecommendationsonRecruitmentandRetentionPayment(RRP),and(iii)
ourrecommendationsarisingfromreviewsofanumberoftargetedmeasuresandspecific
groups.
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3.2. TheGovernment’spolicyforpublicsectorpayrestraintremainedineffectandshaped
theproposalswereceivedfromMODthisyear.Thepolicylimitspublicsectorpayawards
thisyeartoanaverageofonepercent.However,asforourprevioustworounds,we
continuedwiththeapproachofconsideringalloftherelevantevidenceavailabletous.
WehavetakenfullaccountofMOD’saffordabilityconstraintsandtheGovernment’s
widerevidenceontheeconomyandpayrestraint.Wehaveconsideredrecruitment
andretentionevidence,motivationandpaycomparability,adheringtoourtermsof
reference.Wereachedourrecommendationontheoverallpayawardafterassessingallofthevariousandcompetingarguments.
3.3. Targetedmeasurescanberequiredtosupportrecruitmentandretention,particularly
wheretherearestaffingpressures.Eachyearwelookatspecificcompensatory
allowances,payarrangementsandFinancialRetentionIncentives(FRIs)forcertain
groups.OurreviewofRRPfollowstherevised,moreflexibleapproachweadoptedlast
yearwhichallowsspecificRRPearningcadrestobereviewedwhennecessaryratherthan
reviewingthemonafixedtimetable.
3.4. ForthisReportwereviewed:Submariners;AlliedHealthProfessionals;RRP(Aeromedical
andEscortDuty);CommitmentBonuses;NorthernIrelandResidents’Supplement;Mine
CountermeasuresVesselsEnvironmentalAllowance;ExperimentalTestAllowance;andReserves’Bounties.Wealsoreportonanumberofmeasuresweendorsedoutsideour
usualround.
Recommendationonbasepay
3.5. Asusual,wereceivedawiderangeofevidencethisyear:fromMOD,includingthe
Government’seconomicevidence,fromtheServiceFamilies’Federations(SFFs),first
handfromourvisits,onpaycomparabilityfromOME,andanupdatetotheindependent
researchwecommissionedforour2014ReportfromPwC.Wereviewedallofthis
evidencebeforereachingourrecommendationonbasepay.
3.6. TheChiefSecretarytotheTreasury(CST)wrotetoallPayReviewBodyChairson29July2014(Appendix6)restatingtheGovernment’spublicsectorpaypolicy.Hisletterstated
thatthereweresomerecommendationsfromotherPayReviewBodiesfor2014–15that
theGovernmentdecidedwereunaffordable,andthereforedidnotaccept.Hesaidthat
thecaseforpublicsectorpayrestraintremainedstrongandthatcontinuedrestraint
wouldhelptoprotectpublicsectorjobs.TheCSTsaidthatthePayReviewBodieswould
wishtoconsiderthisyearwhethertherewasacaseforahigherawardtoparticular
groupsofstaff,relativetotherestoftheworkforce,duetoparticularrecruitmentand
retentiondifficulties.
3.7. OurremitletterfromtheSecretaryofStateforDefence(alsoatAppendix6)followed
upontheletterfromtheCST,andfocusedonpayandaccommodationprovision
fortheArmedForcesspecifically.InoralevidencetheSecretaryofStatesaidthatthe ArmedForcesremainedinastateoftransition,faceduncertaintiesandthattherewere
recruitmentandretentionissuesinparticularareas.Hestatedthatincrementalpay
scaleshavebeenafundamentalpartofthesalarystructureandtheNewEmployment
Model(NEM)willlookathowpayprogressioncanbeasefficientaspossible,including
linkinginitialprogressionwithexperienceinrank.Onaccommodation,theSecretaryof
Statenotedthattherewasworktodotoincreasesatisfaction,butthatthechangesto
DefenceInfrastructureOrganisation(DIO)managementandthenewnationalhousing
primecontractwerestepsforward.Heconcludedthattheoverallofferwasstillattractive.
ArmedForcespersonnelretainedincrementalpayscales,hadanoncontributorypension
andaccesstosubsidisedaccommodation.
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3.8. MODproposedauniformincreaseinlinewiththeGovernment’spublicsectorpaypolicy.
ItalsoproposedthatmostratesofRRPwereincreasedbytheoverallpayawardandthat
compensatoryallowanceswerealsoraisedbythesamepercentage.MODhighlightedthe
impactsoftheprolongedperiodofchangeonrecruitment,retentionandmorale.While
theoverallstaffingpicturedidnotappeartobeoverlyconcerning,therewereshortfalls
insomekeyareas.MODnotedthat,asthenumberofpersonnelreducestowardsthe
2015requirementassetoutintheStrategicDefenceandSecurityReview(SDSR),there
willbetimeswhenstaffinglevelsexceedrequirementandviceversa.
3.9. Thepictureonstaffingwasoneofchange,withanincreaseinthenumberofpinch
pointsoverthelastyearandparticularconcernoversomekeycapabilities.Someareas
experiencedgappingatlevelsbetween1015percent,withsomeothersashighas
30–50percent.Voluntaryoutflow(VO)levelsremainedofconcern,especiallyforcertain
groups.RecruitmenttargetswerebroadlybeingmetfortheRoyalAirForce(RAF)andthe
RoyalNavy(RN),butnotfortheArmy.
3.10. Resultsfromthe2014ArmedForcesContinuousAttitudeSurveysuggestedthat
satisfactionwithbasicpay,RRPandXFactorremainedlowwiththeresponsesto
questionsonmoraleandmotivationindicatingthatmoralealsoremainedfragile.Further
detailscanbefoundinAppendix5.
3.11. Onourvisits,whilemanypersonneltoldusthattheyunderstoodtherationalebehind
theonepercentpayaward,almosteverygroupconsideredittobeunfairwhen
comparedwiththegeneralincreaseinthecostoflivingandtheincreasesinService
accommodationcosts.Personnelperceivedthatonepercentwasarealtermspaycut
andfeltthatitdidnotproperlyreflectthecontributiontheymadetosociety.
3.12. WeoutlinedinChapter2theevidenceweconsideredonpaycomparability,including
resultsfromAnnualSurveyofHoursandEarnings,graduatepay,publicsectorpay,
andtakehomepay.WealsocommissionedPwCtoproduceanupdateofthepay
comparabilityreportsuppliedlastyear.Theevidencesuggeststhatbasepayforthe
ArmedForceswasbroadlycomparablewithcivilianpay,inboththepublicandprivatesectors.
3.13. Inkeepingwithourtermsofreference,weconsideredindetailthefullrangeofevidence
availabletous,includingthatpresentedformally,dataonpaycomparabilityandthe
evidenceweheardfrompersonnelonourvisits.Wegaveappropriateweighttothe
Government’sevidenceonpublicsectorpaypolicyandaffordability,recognisingthat
Servicepersonnelretainincrementalpayscales.Overall,weconcludethataonepercent
acrosstheboardincreaseinba