Deborah Haynes, Defence Editor
May 28 2018
"Tens of thousands of troops are in line for an above-inflation pay rise as a defence minister called for more than £7 billion in extra funding.
Tobias Ellwood heightened pressure on the Treasury to increase military spending as he told The Times that Britain’s 137,000 full-time service personnel “deserve a pay rise”.
The independent body that assesses military salaries is understood to have recommended a pay increase of about 3 per cent for this financial year, according to a source with knowledge of the issue. Armed forces pay rises have either been frozen or capped at 1 per cent a year since 2010. The rate of inflation was 2.4 per cent last month.
Any easing of pay restraint rules would strain the Ministry of Defence’s overstretched budget yet further.
A 3 per cent salary boost would cost about £200 million a year, according to Malcolm Chalmers, deputy director-general at the Royal United Services Institute think tank. If repeated in future salary rounds, this could total £1.2 billion over three years.
If the Treasury decided against covering the extra expense the MoD would have to find the funding from its own budget, for instance by cutting troop numbers or equipment purchases. Philip Hammond, the chancellor, is already under pressure to fund proposed pay rises for nurses, doctors, policemen and prison officers. Mr Ellwood, 51, said he did not yet know the recommendations of the armed forces pay review body but that he hoped the government would honour them. He called for total defence spending to be increased “north of 2.5 per cent” of GDP, up from 2.14 per cent at present, to fund the full range of warships, jets, tanks and personnel that the MoD needed.
It is the first time that a government minister has identified a specific target for defence spending. Such a rise would equate to an extra £7.3 billion. “We must look after our people,” Mr Ellwood, the minister for defence people and veterans, said. “Nobody joins the armed forces for the money as such, but we must avoid pay being an issue as to why they would be deterred from it.”
He added: “There needs to be a pay rise. We have still got to conclude the defence modernisation programme but you would need to move north of 2.5 per cent to make any of this work, if you want to retain the same defence posture given the dangers, the complexities of the world that we face.”
Military trades suffering a particular shortage of personnel, such as Royal Navy engineers, could receive pay rises higher than 3 per cent, according to the source.The Times understands that the headline conclusions of the defence modernisation programme are due to be announced in early July. Specific details on the funding question, including any pay rise announcement, are not expected until Mr Hammond presents his budget in November at the earliest. Mr Ellwood’s intervention will increase pressure on Mr Hammond, a former defence secretary, to find more money for his old department.
The MoD is struggling to close a hole of £20 billion in its budget over the next decade for new equipment alone. There is a concern that a longer-term settlement may not be forthcoming from the Treasury until next year. The Treasury has signalled a willingness to relax the 1 per cent pay cap, though, particularly when there are skill shortages.
The pay review body, whose chairman is John Steele, a former group personnel director at BT, bases its recommendations upon evidence, including on affordability, given by MoD officials and the military.
The need to improve recruitment and retention would influence any decision to increase pay, Professor Chalmers said. A recent National Audit Office report said that the military was short of more than 8,000 personnel, the biggest deficit in a decade. Professor Chalmers noted, though, that the MoD had been banking on saving £700 million by 2021 by maintaining the 1 per cent pay cap to fund a 2015 review of defence and security.
An MoD spokesman said: “The armed forces pay review body’s recommendations for the 2018 pay award are being considered by the government and an announcement will be made in due course.”"
Thousands of troops in line for pay boost
May 28 2018
"Tens of thousands of troops are in line for an above-inflation pay rise as a defence minister called for more than £7 billion in extra funding.
Tobias Ellwood heightened pressure on the Treasury to increase military spending as he told The Times that Britain’s 137,000 full-time service personnel “deserve a pay rise”.
The independent body that assesses military salaries is understood to have recommended a pay increase of about 3 per cent for this financial year, according to a source with knowledge of the issue. Armed forces pay rises have either been frozen or capped at 1 per cent a year since 2010. The rate of inflation was 2.4 per cent last month.
Any easing of pay restraint rules would strain the Ministry of Defence’s overstretched budget yet further.
A 3 per cent salary boost would cost about £200 million a year, according to Malcolm Chalmers, deputy director-general at the Royal United Services Institute think tank. If repeated in future salary rounds, this could total £1.2 billion over three years.
If the Treasury decided against covering the extra expense the MoD would have to find the funding from its own budget, for instance by cutting troop numbers or equipment purchases. Philip Hammond, the chancellor, is already under pressure to fund proposed pay rises for nurses, doctors, policemen and prison officers. Mr Ellwood, 51, said he did not yet know the recommendations of the armed forces pay review body but that he hoped the government would honour them. He called for total defence spending to be increased “north of 2.5 per cent” of GDP, up from 2.14 per cent at present, to fund the full range of warships, jets, tanks and personnel that the MoD needed.
It is the first time that a government minister has identified a specific target for defence spending. Such a rise would equate to an extra £7.3 billion. “We must look after our people,” Mr Ellwood, the minister for defence people and veterans, said. “Nobody joins the armed forces for the money as such, but we must avoid pay being an issue as to why they would be deterred from it.”
He added: “There needs to be a pay rise. We have still got to conclude the defence modernisation programme but you would need to move north of 2.5 per cent to make any of this work, if you want to retain the same defence posture given the dangers, the complexities of the world that we face.”
Military trades suffering a particular shortage of personnel, such as Royal Navy engineers, could receive pay rises higher than 3 per cent, according to the source.The Times understands that the headline conclusions of the defence modernisation programme are due to be announced in early July. Specific details on the funding question, including any pay rise announcement, are not expected until Mr Hammond presents his budget in November at the earliest. Mr Ellwood’s intervention will increase pressure on Mr Hammond, a former defence secretary, to find more money for his old department.
The MoD is struggling to close a hole of £20 billion in its budget over the next decade for new equipment alone. There is a concern that a longer-term settlement may not be forthcoming from the Treasury until next year. The Treasury has signalled a willingness to relax the 1 per cent pay cap, though, particularly when there are skill shortages.
The pay review body, whose chairman is John Steele, a former group personnel director at BT, bases its recommendations upon evidence, including on affordability, given by MoD officials and the military.
The need to improve recruitment and retention would influence any decision to increase pay, Professor Chalmers said. A recent National Audit Office report said that the military was short of more than 8,000 personnel, the biggest deficit in a decade. Professor Chalmers noted, though, that the MoD had been banking on saving £700 million by 2021 by maintaining the 1 per cent pay cap to fund a 2015 review of defence and security.
An MoD spokesman said: “The armed forces pay review body’s recommendations for the 2018 pay award are being considered by the government and an announcement will be made in due course.”"
Thousands of troops in line for pay boost
