The 2.9% pay award to the armed forces which comes into effect at the end of this month is hailed as being the largest for decades. However, is it as good as the Government would like us to think?
On the face of things, it looks like the increase is as good as, or better than, any other public sector pay award. It certainly seems to exceed current inflation rates as well as being above current UK wage increases. But it is not, in fact, all “normal” pay. Two percent is a pensionable pay increase back-dated to 1st April 2018, while the other .9% is effectively a lump sum award which does not have any pension value attached to it. Moreover, TMT is not aware of the actual date on which this will be made.
We now know that X-factor rates will remain unchanged but there will be an increase of almost 3% to Compensatory Allowances which will also be applied to recruitment and retention payments, as well as Reserve Bounties.
It has been assessed that for most personnel the rise will equate to an increase of about £200 after taxes and NI contributions. That figure will clearly rise according to rank and other circumstances. The lump sum amount will be worth approximately £170. But it raises the question as to whether it will make any real difference once other increases in costs are concerned, these include accommodation and food.
Cost of Single Living and Service Family accommodation are increasing by 0.6%. However, the average increase will amount to some £20 over a full year. Daily messing charges are going up by 18p per day to £4.97 and there will be an increase in the “pay as you dine” core meal price. This last point means that the single serviceman living on base is most likely to see the pay award offset by other fixed-cost increases.
A senior officer has pointed out that the reasons people join the Army are not solely to do with money – something accepted by almost anyone thinking of doing so. However, retention of trained personnel is increasingly being seen as a factor in preserving the Army’s manpower, already about 7% below its target of 82,000. As personnel start to have to make decisions about their future life, often involving family issues, the gaps between earnings and conditions when compared to the civilian world start to become more obvious and pressures to leave come into play.
To date, there is little confidence in a future pay increase. The Army has, to some extent, been able to insulate itself from the Government’s overall restrictions on funding, but few have any doubts about the sort of pressures the MOD will face in the year the UK leaves Europe. When questioned, officials start to point to the growing costs of equipment and deployments, diplo-speak for “No”. As with so many other aspects of modern life, choices will have to be made between people and “machines” and it is becoming harder to remain optimistic that the people will come out on top.