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- The Strategic Defence and Security Review (SDSR) set out a requirement to reduce expenditure on Service and Civil Service allowances amounting to some £300M per year. Minister for Defence Personnel, Welfare and Veterans, Andrew Robathan, today announced the package of measures to be implemented for the Armed Forces.
- Except where specifically stated these changes will take effect from 1 May 2011.
- These measures will represent a £250M reduction per year from an Armed Forces allowance spend of approximately £880M per year. About £80M of this reduction will be achieved as a result of reductions in numbers of personnel and measures to reduce the number of movements which generate claims. The remainder will come from changes in allowance eligibility criteria and rates.
- An at-a-glance summary of changes can be found at Annex A. This should be read in conjunction with the detail contained in this brief.
- Additional briefing material for Commanding Officers has been issued via the single-Service chains of command and Heads of TLB, Agency and Trading Fund establishments.
- Changes to Continuity of Education Allowances were announced on 16 December 2010 via Defence Internal Brief 2010/95.
- It is accepted that these changes will be unpopular and that some of them may require adjustments to lifestyle, but they are a necessary part of the Departments contribution to the overall Governments programme to reduce the UK deficit.
- The purpose of allowances is to reimburse Service personnel for justifiable expenditure incurred either when on duty or as a result of the unique natureof Service life. The current financial position has placed pressure on the level of allowances that are affordable. Whilst there will be some reductions and changes, appropriate allowances will continue in the future.
- The Service Chiefs of Staff and their Principal Personnel Officers have been fully engaged in this process. The MOD and the single Services have concentrated on ensuring, where possible, that no group is disproportionately affected, and have sought to mitigate effects by phasing in some changes by up to 2 years.
- Where possible, allowance savings measures have been taken in accordance with the following principles: o all actual, unavoidable expenses incurred for Service reasons should be reimbursed; o where expense is incurred for Service reasons but there is some element of choice in incurring this expense, Service Personnel should make a contribution towards it; o operations, mobility and separation should be the highest priorities for reimbursement; o lower earners should be protected as much as possible;
- Many personnel claim only a few allowances and therefore will not be significantly affected by these changes. Individuals whose circumstances do warrant many allowances and believe they will be placed in financial difficulty by the changes should inform their Chain of Command who will direct them to the appropriate area for advice.
- For those changes to allowances that will take effect from 1 May 11, any rates not yet published, as well as applicable regulations, will be promulgated by Directed Letter by no later than 28 Feb 11. Where allowance changes will take effect from 1 Apr 12, rates will be published at the appropriate time.
- A separate Defence Instruction and Notice (DIN) on changes to the Commitment Bonuses Scheme due to take effect, for new entrants only, from 20 Jan 11 and explained below will be issued shortly.
- Changes to the Specialist Pay Reserve Banding system will take effect from 1 Apr 12.
- In addition to the above, other work is continuing to review payments made in support of recruitment and retention, in particular: o The single-Services are reviewing and revalidating the full range of Financial Incentives Schemes. o Each category of Specialist Pay will be reviewed and revalidated in 2011.
- In line with current practice, the allowances policy and the associated rates of payment will remain under constant review.