Armed Forces Pay Accessible

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Armed For Twenty-Sixth Report 2012ces’

Pay Review BodyChair: Jerry Cope

Forty-Fourth Report 2015

Chair: John Steele

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ArmedForces’PayReviewBody

FortyFourthReport2015

Chair:JohnSteele

PresentedtoParliamentbythePrimeMinisterandthe

SecretaryofStateforDefencebyCommandofHerMajesty

March2015

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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.

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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.

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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

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