Armed Forces' Pay Review Body 47Th Report 2018

Armed Forces’ Pay Review Body Forty-Seventh Report 2018 Chair: John Steele Cm 9677 Armed Forces’ Pay Review Body Forty-Seventh Report 2018 Chair: John Steele Presented to Parliament by the Prime Minister and the Secretary of State for Defence by Command of Her Majesty July 2018 Cm 9677 © Crown copyright 2018 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit <a href="/goto?url=http://nationalarchives.gov.uk/doc/open-government-licence/version/3" target="_blank">nationalarchives.gov.uk/doc/open-government-licence/version/3 </a>or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected]. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available at <a href="/goto?url=http://www.gov.uk/government/publications" target="_blank">www.gov.uk/government/publications </a>Any enquiries regarding this publication should be sent to us at <a href="/goto?url=https://www.gov.uk/government/organisations/office-of-manpower-economics" target="_blank">https://www.gov.uk/government/organisations/office-of-manpower-economics </a>ISBN 978-1-5286-0435-2 CCS0318277118 07/18 Printed on paper containing 75% recycled fibre content minimum Printed in the UK by the APS Group on behalf of the Controller of Her Majesty’s Stationery Office Armed Forces’ Pay Review Body TERMS OF REFERENCE 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. The members of the Review Body are: John Steele (Chair)1 Brendan Connor Tim Flesher CB Professor Ken Mayhew Lesley Mercer Vilma Patterson MBE Janet Whitworth Rear Admiral (Ret’d) Jon Westbrook CBE The secretariat is provided by the Office of Manpower Economics. 1John Steele is also a member of the Review Body on Senior Salaries. <ul style="display: flex;"><li style="flex:1">iii </li><li style="flex:1">iv </li></ul>Contents Paragraph Terms of Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page iii viii xiii Chapter 1 Chapter 2 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Context. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 Our evidence base . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9 Our 2018 Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.18 11124Context and Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Government evidence. . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 − General economic context . . . . . . . . . . . . . . . . . . 2.2 − MOD evidence on strategic management. . . . . . . 2.6 Staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.10 Motivation and morale . . . . . . . . . . . . . . . . . . . . . . . . 2.12 Workload . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.19 − Operational and other commitments . . . . . . . . . 2.19 Working hours. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.22 National Minimum Wage and National Living Wage . . 2.25 Leave arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . 2.29 Pay comparability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.31 − Review of our approach to pay comparability . . . 2.32 − Average Weekly Earnings and pay settlements. . . 2.34 7777899 10 10 11 12 13 13 13 14 − Comparisons with data from the Annual Survey <ul style="display: flex;"><li style="flex:1">of Hours and Earnings. . . . . . . . . . . . . . . . . . . . . 2.36 </li><li style="flex:1">14 </li></ul>15 16 17 19 − Graduate pay . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.38 Non-pay benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.41 Diversity and Inclusivity in the Armed Forces. . . . . . . . 2.43 Reserve Forces. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.54 Chapter 3 Pay and Allowances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Base pay: the evidence . . . . . . . . . . . . . . . . . . . . . . . . . 3.9 Comment and recommendation. . . . . . . . . . . . . . . . . 3.17 Defence Engineering Remuneration Review. . . . . . . . . 3.27 Recruitment and Retention Payments . . . . . . . . . . . . . 3.40 RRP (Flying Crew) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.54 RRP (Hydrographic). . . . . . . . . . . . . . . . . . . . . . . . . . . 3.70 RRP (Parachute). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.76 RRPs and Pay16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.82 23 25 26 27 29 33 35 38 39 40 vMine Counter Measure Vessels Environmental <ul style="display: flex;"><li style="flex:1">Allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.84 </li><li style="flex:1">42 </li></ul>43 44 45 46 Officers Commissioned from the Ranks . . . . . . . . . . . . 3.88 Recruitment and Retention Allowance (London) . . . . . 3.93 Unpleasant Work Allowance . . . . . . . . . . . . . . . . . . . 3.100 Rates of Compensatory Allowances . . . . . . . . . . . . . . 3.103 Financial incentives considered outside our usual <ul style="display: flex;"><li style="flex:1">timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.104 </li><li style="flex:1">46 </li></ul>46 48 Pay16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.107 Payment of professional body fees . . . . . . . . . . . . . . 3.113 Chapter 4 Service Medical and Dental Officers. . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 − DMS Developments . . . . . . . . . . . . . . . . . . . . . . . 4.3 NHS Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 Our 2018 recommendations. . . . . . . . . . . . . . . . . . . . . 4.5 Our evidence base . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6 Staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8 Recruitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11 Retention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.12 Motivation and Morale . . . . . . . . . . . . . . . . . . . . . . . . 4.13 DMS Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.15 Pay comparability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.17 − Summary of pay comparisons by DMS group . . . 4.18 − Consultants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.19 − General Medical Practitioners . . . . . . . . . . . . . . . 4.22 − General Dental Practitioners . . . . . . . . . . . . . . . . 4.25 − Junior Doctors in Training . . . . . . . . . . . . . . . . . . 4.28 Future pay comparability. . . . . . . . . . . . . . . . . . . . . . . 4.30 Pay recommendations for 2018-19 . . . . . . . . . . . . . . . 4.34 − Overall pay recommendation . . . . . . . . . . . . . . . 4.34 GMP and GDP Trainer Pay and Associate Trainer Pay. . 4.39 MOD Clinical Excellence Awards . . . . . . . . . . . . . . . . . 4.40 Length of pay scales . . . . . . . . . . . . . . . . . . . . . . . . . . 4.42 Working hours. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.43 49 49 49 49 50 50 50 51 53 54 54 54 55 55 55 57 57 58 59 61 61 62 62 62 62 Chapter 5 Accommodation and Food Charges . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Service Family Accommodation. . . . . . . . . . . . . . . . . . . 5.4 Our approach to recommendations . . . . . . . . . . . . . . 5.19 Service Family Accommodation rental charges . . . . . . 5.27 − Other components of SFA charges . . . . . . . . . . . 5.31 Single Living Accommodation. . . . . . . . . . . . . . . . . . . 5.32 − Single Living Accommodation rental charges . . . 5.41 − Other components of SLA charges . . . . . . . . . . . 5.42 Other charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.43 65 65 65 69 71 71 72 73 74 74 vi Future Accommodation Model . . . . . . . . . . . . . . . . . . 5.44 Forces Help to Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.47 Daily Food Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.48 74 75 77 Chapter 6 X-Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 The rationale for X-Factor . . . . . . . . . . . . . . . . . . . . . . . 6.4 Context. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7 79 79 79 80 Analysis of X-Factor components – military and <ul style="display: flex;"><li style="flex:1">civilian. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10 </li><li style="flex:1">80 </li></ul>84 84 85 85 85 85 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.24 The X-Factor taper . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.27 Evidence on other groups . . . . . . . . . . . . . . . . . . . . . . 6.28 Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.29 Military Provost Guard Service. . . . . . . . . . . . . . . . . . . 6.30 Royal Gibraltar Regiment and RG Reserves . . . . . . . . . 6.31 Chapter 7 Looking Ahead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost of recommendations. . . . . . . . . . . . . . . . . . . . . . . 7.1 Looking ahead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Our next Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.16 87 87 87 89 89 Appendix 1 Appendix 2 Salaries (including X-Factor) for 1 April 2017 and <ul style="display: flex;"><li style="flex:1">recommendations for 1 April 2018 . . . . . . . . . . . . . . . . . . </li><li style="flex:1">91 </li></ul>1 April 2018 recommended rates of Recruitment and <ul style="display: flex;"><li style="flex:1">Retention Payments and compensatory allowances. . . . . . </li><li style="flex:1">109 </li></ul>116 117 Appendix 3 Appendix 4 Appendix 5 AFPRB 2017 recommendations . . . . . . . . . . . . . . . . . . . . . AFPRB 2017 visits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Letter from the Chief Secretary to the Treasury and the <ul style="display: flex;"><li style="flex:1">remit letter from the Secretary of State for Defence. . . . . . </li><li style="flex:1">119 </li></ul>122 Appendix 6 AFRPB’s five-year work programme schedule. . . . . . . . . . . vii GLOSSARY OF TERMS 1AMW 4TG No. 1 Air Mobility Wing (RAF) Four-Tier Grading A2020 AAC Army 2020 Army Air Corps AFCAS AFPRB AFPS AGE Armed Forces Continuous Attitude Survey Armed Forces’ Pay Review Body Armed Forces’ Pension Scheme Aircraft Ground Engineer (RAF) Annington Homes Ltd AHL ASHE AWE Annual Survey of Hours and Earnings Average Weekly Earnings BAME BDA Black, Asian and Minority Ethnic British Dental Association BEIS Department for Business, Energy and Industrial Strategy British Medical Association BMA CA CarillionAmey CAAS CCB Combined Accommodation Assessment System Continuous Career Basis CEA Clinical Excellence Award (DMS and NHS) Chartered Engineer status CEng CILCOT CPI Contribution in Lieu of Council Tax Consumer Prices Index CPIH CST Consumer Prices Index including Owner Occupiers’ Housing Costs Chief Secretary to the Treasury Completion of Task Basis CTB DDIP DDRB DERR DFC Defence Diversity and Inclusivity Programme Review Body on Doctors’ and Dentists’ Remuneration (OME) Defence Engineering Remuneration Review Daily Food Charge DHSC DIO Department of Health and Social Care Defence Infrastructure Organisation Defence Medical Services DMS DMS20 DMSCAS Defence Medical Services 2020 Defence Medical Services Continuous Attitudes Survey viii EDP Early Departure Payment Eng Tech EPRA FAM FAMCAS FES Engineering Technician Engineer Professional Recognition Award Future Accommodation Model Armed Forces Families Continuous Attitude Survey Flexible Engagements System Forces Help to Buy FHTB FI Financial Incentive FOI Freedom of Information FR20 FRI Future Reserves 2020 Financial Retention Incentive Full Time Reserve Service FTRS GDP GMP GPMS GTS Gross Domestic Product or General Dental Practitioner General Medical Practitioner General and Personal Medical Services Gains to Trained Strength HESA HM(H) HMRC HoE Higher Education Statistics Agency Hydrographic and Meteorology Branch (Hydrography) (RN) Her Majesty’s Revenue and Customs Head of Establishment HR Human Resources IDR Incomes Data Research IEng IES Incorporated Engineer Institute for Employment Studies Individual Harmony Guidelines Individual Leave Allowance IHGs ILA IP Industry Partners JHSS JPA Joint Helicopter Support Squadron Joint Personnel Administration Joint Services Job Evaluation Team Joint Service Publication JSJET JSP KPIs LGBT LSA Key Performance Indicators Lesbian, Gay, Bisexual and Transgender Longer Separation Allowance Mine Counter Measures Vessels Mine Counter Measures Vessels Environmental Allowance MCMVs MEA ix MET MIS Meteorology Minimum Income Standard Ministry of Defence MOD MODO MPGS NATO NCA NCB NCO NEM NERP NHP NHS NI Medical and Dental Officers Military Provost Guard Service North Atlantic Treaty Organisation Non-Commissioned Aircrew Non-Continuous Basis Non-Commissioned Officer New Employment Model New Entrants’ Rates of Pay National Housing Prime National Health Service Northern Ireland NIRS NJO Northern Ireland Residents’ Supplement New Joiner Offer NLW NMW NTM OBR OCFR OF National Living Wage National Minimum Wage Notice to Move The Office for Budget Responsibility Officer(s) Commissioned from the Ranks Officer OFWAT OME OPP OR Water Services Regulation Authority Office of Manpower Economics Operational Pinch Point Other Rank PAC Public Accounts Committee Programmed Activities Pay As You Dine PAs PAYD PBF Professional Body Fees PFI Private Finance Initiative Performance Indicator PI PJI Parachute Jumping Instructor Principal Personnel Officers Professionally Qualified Officers Pay Round 2018 PPOs PQOs PR18 xPR19 Pay Round 2019 PR20 Pay Round 2020 PSA Public Service Agreement PVR Premature Voluntary Release PwC PricewaterhouseCoopers RAF Royal Air Force RAFR Royal Air Force Reserves RE Royal Engineers REME ResCAS RG Royal Electrical and Mechanical Engineers Armed Forces Reserves Continuous Attitude Survey Royal Gibraltar Regiment RLC Royal Logistic Corps RM Royal Marines RMR Royal Marines Reserve RN Royal Navy RNR Royal Naval Reserve RoS Return of Service RPAS Remotely Piloted Aircraft Systems RPI Retail Prices Index RRA(L) RRP Recruitment and Retention Allowance (London) Recruitment and Retention Payment Recruitment and Retention Payment (Flying Crew) Recruitment and Retention Payment (Hydrographic) Recruitment and Retention Payment (Mountain Leader) Recruitment and Retention Payment (Naval Service Engineer) Recruitment and Retention Payment (Parachute) Recruitment and Retention Payment (Parachute Jumping Instructor) Recruitment and Retention Payment (Special Communications) Recruitment and Retention Payment (Special Forces) Recruitment and Retention Payment (Special Forces Communications) Recruitment and Retention Payment (Special Reconnaissance Regiment) Recruitment and Retention Payment (Weapons Engineering Submariner) Superannuation Contributions Adjusted for Past Experience State Ceremonial and Public Duties Strategic Defence and Security Review Special Forces RRP(FC) RRP(H) RRP(ML) RRP(NSE) RRP(P) RRP(PJI) RRP(SC) RRP(SF) RRP(SFC) RRP(SRR) RRP(WESM) SCAPE SCPD SDSR SF xi SFA Service Family Accommodation Special Forces Communications Service Families’ Federation Surgeon General (DMS) SFC SFF SG SI Special Intelligence SLA Single Living Accommodation Single Living Accommodation (Management Information System) Single Living Accommodation Modernisation Submarine SLA (MIS) SLAM SM SNCO SP Senior Non-Commissioned Officer Service Personnel SQEP SR Suitably Qualified and Experienced Personnel Special Reconnaissance or Senior Rate Substitute Service Family Accommodation Review Body on Senior Salaries (OME) Science, Technology, Engineering and Mathematics Training Bounty SSFA SSRB STEM TB TLB Top Level Budget TSP Trade Supplement Placement United Kingdom of Great Britain and Northern Ireland Unpleasant Living Allowance United Nations UK ULA UN USA UWA VAT VBA VO United States of America Unpleasant Work Allowance Value Added Tax Virtual Bank Account Voluntary Outflow WMS WO Written Ministerial Statement Warrant Officer xii ARMED FORCES’ PAY REVIEW BODY 2018 REPORT – SUMMARY Summary of recommendations from 1 April 2018 (unless otherwise stated): ••• Rates of base pay for the main remit group to be increased by 2.9 per cent. All rates of X-Factor should remain unchanged. The following targeted measures as part of the Defence Engineering Remuneration Review (DERR) pay proposals: – Category 1: core pay, supplements and bespoke pay spine • Royal Air Force (RAF)-led tri-Service work on the case for a bespoke pay spine for professional engineers, to report to us in Pay Round 19 (PR19); and • Consideration of using the Pay16 pay model to better target engineers in core pay, again to report to us in PR19. – Category 2: qualifications and professional registration • an Engineer Professional Recognition Award (EPRA) for Army Officers (OFs) and Other Ranks (ORs) for implementation in the current pay round (PR18); • an EPRA for Royal Navy Officers, that includes retrospective recognition of qualifications, for implementation in PR19; and • an EPRA targeted at all RAF OFs and ORs tied to professional attainment from Eng Tech through to IEng and CEng, and that again includes retrospective recognition, for implementation in PR18. – Category 3: targeted remuneration measures • Possible RAF-led Financial Retention Incentives (FRIs) targeted at specific cohorts (including both OFs and ORs) for implementation in PR18. These FRIs have not yet been submitted for our consideration but we are content to consider them out of round; • A Royal Navy-led targeted Recruitment and Retention Payment (RRP) (Naval Service Engineer) for Royal Navy ORs, for implementation in PR19, synchronised with the rundown of existing FRIs for Marine and Weapon Engineer, General Service and for Submariners; and • Two Army-led FRIs, one targeted at Royal Electrical and Mechanical Engineers (REME) Aircraft and Avionics Technicians and the other targeted at REME Artificer Aircraft and Avionics Technicians, both for implementation in PR18. <ul style="display: flex;"><li style="flex:1">•</li><li style="flex:1">Other targeted measures (full details in Chapter 3): </li></ul>– RRP (Mountain Leaders) and RRP (Parachute Jumping Instructors) to remain at current rates. – RRP (Flying Crew) (FC): • RRP(FC) to remain at current rates. • Royal Navy Flying Maintainers to continue to be eligible for RRP(FC) on a Non-Continuous Basis (NCB). • An enduring requirement to pay RRP(FC) to Royal Navy Flight Winchmen on a NCB under existing arrangements. xiii • RRP(FC) should be re-profiled for Royal Logistic Corps (RLC) Air Despatchers under existing NCB arrangements, focusing the payment on the retention of more experienced personnel. • Army Air Corps Aviation Crew transfer to RRP (Flying) Non- Commissioned Aircrew with effect from 1 April 2018. • No ongoing requirement to pay RRP(FC) to REME Aircraft Technicians. • An ongoing requirement to pay RRP(FC) to RAF Aircraft Ground Engineers; however, the recruitment and retention issues affecting the cohort should be considered as part of the DERR and single Service work to improve retention within engineering cadres. • An ongoing requirement to pay RRP(FC) on a NCB for Suitably Qualified and Experienced Personnel working as RAF Air Mobility Movers within No 1 Mobility Wing; however, it is not necessary to pay new entrants at the base level.

Armed Forces' Pay Review Body 47Th Report 2018

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