Armed Forces’ Pay Review Body – Forty-Seventh Report 2018 Armed Forces’ 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 nationalarchives.gov.uk/doc/open-government-licence/version/3 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 www.gov.uk/government/publications Any enquiries regarding this publication should be sent to us at https://www.gov.uk/government/organisations/office-of-manpower-economics 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. 1 John Steele is also a member of the Review Body on Senior Salaries. iii iv Contents Paragraph Page Terms of Reference ............................. iii Glossary of Terms .............................. viii Summary ..................................... xiii Chapter 1 Introduction .................................. 1 Introduction .................................1.1 1 Context .....................................1.4 1 Our evidence base ............................1.9 2 Our 2018 Report. 1.18 4 Chapter 2 Context and Evidence ........................... 7 Introduction .................................2.1 7 Government evidence ..........................2.2 7 − General economic context ..................2.2 7 − MOD evidence on strategic management .......2.6 8 Staffing. .2.10 9 Motivation and morale ........................2.12 9 Workload ..................................2.19 10 − Operational and other commitments .........2.19 10 Working hours. 2.22 11 National Minimum Wage and National Living Wage ..2.25 12 Leave arrangements ..........................2.29 13 Pay comparability ............................2.31 13 − Review of our approach to pay comparability ...2.32 13 − Average Weekly Earnings and pay settlements ...2.34 14 − Comparisons with data from the Annual Survey of Hours and Earnings. 2.36 14 − Graduate pay ...........................2.38 15 Non-pay benefits ............................2.41 16 Diversity and Inclusivity in the Armed Forces ........2.43 17 Reserve Forces. 2.54 19 Chapter 3 Pay and Allowances ............................. 23 Introduction .................................3.1 25 Base pay: the evidence .........................3.9 26 Comment and recommendation .................3.17 27 Defence Engineering Remuneration Review .........3.27 29 Recruitment and Retention Payments .............3.40 33 RRP (Flying Crew) ............................3.54 35 RRP (Hydrographic) ...........................3.70 38 RRP (Parachute). .3.76 39 RRPs and Pay16. .3.82 40 v Mine Counter Measure Vessels Environmental Allowance. .3.84 42 Officers Commissioned from the Ranks ............3.88 43 Recruitment and Retention Allowance (London) .....3.93 44 Unpleasant Work Allowance ...................3.100 45 Rates of Compensatory Allowances ..............3.103 46 Financial incentives considered outside our usual timetable .................................3.104 46 Pay16 ....................................3.107 46 Payment of professional body fees ..............3.113 48 Chapter 4 Service Medical and Dental Officers ................ 49 Introduction .................................4.1 49 Background. .4.3 49 − DMS Developments .......................4.3 49 NHS Developments ............................4.4 50 Our 2018 recommendations .....................4.5 50 Our evidence base ............................4.6 50 Staffing. 4.8 51 Recruitment ................................4.11 53 Retention ..................................4.12 54 Motivation and Morale ........................4.13 54 DMS Reserves. 4.15 54 Pay comparability ............................4.17 55 − Summary of pay comparisons by DMS group ...4.18 55 − Consultants .............................4.19 55 − General Medical Practitioners ...............4.22 57 − General Dental Practitioners ................4.25 57 − Junior Doctors in Training ..................4.28 58 Future pay comparability .......................4.30 59 Pay recommendations for 2018-19 ...............4.34 61 − Overall pay recommendation ...............4.34 61 GMP and GDP Trainer Pay and Associate Trainer Pay ..4.39 62 MOD Clinical Excellence Awards .................4.40 62 Length of pay scales ..........................4.42 62 Working hours. 4.43 62 Chapter 5 Accommodation and Food Charges ................ 65 Introduction .................................5.1 65 Service Family Accommodation ...................5.4 65 Our approach to recommendations ..............5.19 69 Service Family Accommodation rental charges ......5.27 71 − Other components of SFA charges ...........5.31 71 Single Living Accommodation ...................5.32 72 − Single Living Accommodation rental charges ...5.41 73 − Other components of SLA charges ...........5.42 74 Other charges. 5.43 74 vi Future Accommodation Model ..................5.44 74 Forces Help to Buy ...........................5.47 75 Daily Food Charge ...........................5.48 77 Chapter 6 X-Factor. 79 Introduction .................................6.1 79 The rationale for X-Factor .......................6.4 79 Context .....................................6.7 80 Analysis of X-Factor components – military and civilian. 6.10 80 Conclusions. 6.24 84 The X-Factor taper ...........................6.27 84 Evidence on other groups ......................6.28 85 Reserves ...................................6.29 85 Military Provost Guard Service ...................6.30 85 Royal Gibraltar Regiment and RG Reserves .........6.31 85 Chapter 7 Looking Ahead. 87 Cost of recommendations .......................7.1 87 Looking ahead ...............................7.2 87 Our next Report .............................7.13 89 Conclusions. 7.16 89 Appendix 1 Salaries (including X-Factor) for 1 April 2017 and recommendations for 1 April 2018 .................. 91 Appendix 2 1 April 2018 recommended rates of Recruitment and Retention Payments and compensatory allowances ...... 109 Appendix 3 AFPRB 2017 recommendations ..................... 116 Appendix 4 AFPRB 2017 visits ............................... 117 Appendix 5 Letter from the Chief Secretary to the Treasury and the remit letter from the Secretary of State for Defence ...... 119 Appendix 6 AFRPB’s five-year work programme schedule ........... 122 vii GLOSSARY OF TERMS 1AMW No. 1 Air Mobility Wing (RAF) 4TG Four-Tier Grading A2020 Army 2020 AAC Army Air Corps AFCAS Armed Forces Continuous Attitude Survey AFPRB Armed Forces’ Pay Review Body AFPS Armed Forces’ Pension Scheme AGE Aircraft Ground Engineer (RAF) AHL Annington Homes Ltd ASHE Annual Survey of Hours and Earnings AWE Average Weekly Earnings BAME Black, Asian and Minority Ethnic BDA British Dental Association BEIS Department for Business, Energy and Industrial Strategy BMA British Medical Association CA CarillionAmey CAAS Combined Accommodation Assessment System CCB Continuous Career Basis CEA Clinical Excellence Award (DMS and NHS) CEng Chartered Engineer status CILCOT Contribution in Lieu of Council Tax CPI Consumer Prices Index CPIH Consumer Prices Index including Owner Occupiers’ Housing Costs CST Chief Secretary to the Treasury CTB Completion of Task Basis DDIP Defence Diversity and Inclusivity Programme DDRB Review Body on Doctors’ and Dentists’ Remuneration (OME) DERR Defence Engineering Remuneration Review