Select Committee on Defence Second Report


THE STRATEGIC DEFENCE REVIEW: POLICY FOR PEOPLE

IV RETAINING THE RIGHT PEOPLE

56. We have examined the Armed Forces' achievements in recruitment in terms of numbers, diversity and appropriateness of personnel, and we have indicated where improvements need to be made. It is vital that the Armed Forces have a constant supply of new recruits. However, as we have commented before, successful recruitment on its own is not a solution: increasing recruitment without dealing with the problems of retaining personnel is like trying to fill a bath without putting the plug in.[108] Outflow and inflow must be carefully balanced. As the Armed Forces Pay Review Body comments—

    ... inexperienced, newly trained recruits cannot simply replace the loss of trained, experienced personnel in whom significant investment has been made.[109]

The Services must calibrate and control the outflow of trained personnel to balance the need for new recruits against the need to retain enough people whom they have recruited and expensively trained to meet their commitments. They will only do this if they offer a career and a lifestyle which Service men and women and their families regard as giving them a comparable, although different, quality of life from that which they might envisage having in the civilian sector and which will persuade enough of them to stay in the services for a full career.

57. In this section we assess the scale of the retention problem and then go on to examine what the Armed Forces are doing, and what more they need to do, to keep the personnel they need for as long as they need them. First we examine the terms and conditions of service in the Armed Forces; in the next section, we turn to the wider social and family aspects of Service life which are equally important factors in retention.

The scale of the retention problem

58. Managed reductions in all three Services have occurred since the beginning of the 1990s as a result of decisions taken after the end of the Cold War. The resulting 'peace dividend' has meant the UK Armed Forces reducing by one-third.[110] But in fact the Armed Forces are busier than ever. AS CDS said in his RUSI speech in December—

    The fragmentation and instability in the world has led to a dramatic increase in international involvement in peace support operations. In the 34 years since the first UN peace-keeping force, supervising the withdrawal of British, French and Israeli forces from Egypt in 1956, to 1990, there were 13 UN peace support missions. In the 10 years since 1990 there have been 40 UN operations of which 14 are still in being today. In the same 10 year period there have been another 14 non-UN peace keeping operations many of which have been mounted by coalitions of the willing. For example the Implementation Force in Bosnia, INTERFET in East Timor or the West African ECOMOG operations in Liberia and Sierra Leone.[111]

The worrying thing, in the context of this high operational tempo, is that having seen slight improvements in outflow in most categories in 1998 and 1999, the Services are now seeing unmanaged outflow at rates close to the managed peaks of the mid-1990s. In fact, for the Army, the percentage of other ranks leaving the Service as a proportion of the trained strength was higher in the year to April 2000 than in any of the previous four years and the position for Navy ratings is little better. The draining effect that poor retention is having on the Services is shown in an even starker light by comparing the intake against outflow, bearing in mind that this is at a time when all parts of the Services are seeking to increase, or at least to hold steady, their numbers. In no category other than naval officers did the Services have a net gain in personnel in the last financial year.

59. Those wishing to leave the Services before the end of their term of engagement or commission apply for premature voluntary release (PVR). PVR figures are therefore another indicator of how many people are leaving the Services for reasons other than that they have reached the end of their contracted period of service. The number and rate of exits by PVR for the last ten financial years are shown below.

Table 9
Premature Voluntary Release (PVR) Exits
(Numbers and as a percentage of average trained strength)

Financial years
All Services
Naval Service
Army
RAF
  
Officers
Other
Ranks
Officers
Other
Ranks
Officers
Other
Ranks
Officers
Other
Ranks
1990/91
1,302 (3.4%)
17,288 (7.3%)
266 (3.2%)
3,227 (6.8%)
704 (4.3%)
10,811 (9.0%)
332 (2.5%)
3,250 (4.7%)
1991/92
1,105 (2.9%)
13,927 (6.0%)
222 (2.7%)
2,555 (5.5%)
590 (3.6%)
8,740 (7.4%)
293 (2.2%)
2,632 (3.8%)
1992/93
753 (2.0%)
10,829 (4.7%)
146 (1.8%)
1,548 (3.3%)
319 (2.0%)
7,490 (6.6%)
288 (2.2%)
1,791 (2.7%)
1993/94
416 (1.2%)
8,172 (3.8%)
47(0.6%)
1,328 (2.9%)
191 (1.3%)
5,571 (5.2%)
178 (1.4%)
1,273 (2.7%)
1994/95
490 (1.5%)
8,896 (4.5%)
95(1.2%)
1,087 (2.6%)
254 (1.9%)
6,377 (6.6%)
141 (1.2%)
1,432 (2.4%)
1995/96
638 (2.0%)
9,755 (5.3%)
118 (1.6%)
1,404 (3.6%)
353 (2.7%)
6,513 (7.3%)
167 (1.4%)
1,838 (3.3%)
1996/97
701 (2.3%)
9,254 (5.4%)
136 (1.9%)
1,877 (5.2%)
373 (2.9%)
5,851 (6.8%)
192 (1.8%)
1,526 (3.1%)
1997/98
844 (2.9%)
9,053 (5.6%)
170 (2.5%)
1,754 (5.1%)
458 (3.6%)
5,744 (6.7%)
216 (2.2%)
1,555 (3.6%)
1998/99
916 (3.1%)
9,395 (5.9%)
164 (2.4%)
1,706 (5.2%)
509 (4.0%)
5,947 (7.1%)
243 (2.5%)
1,742 (4.1%)
1999/00
893 (3.1%)
8,747 (5.6%)
238 (3.6%)
1,676 (5.2%)
442 (3.5%)
5,314 (6.4%)
213 (2.2%)
1,757 (4.2%)

Source: Defence Analytical Services Agency, UK Regular Forces Premature Voluntary Release at 1 October 2000, TSP 5, 7 November 2000
Note: Rates are calculated as the number of exits as a percentage of the average trained strength.

The Army shows a welcome reduction in the rate of PVRs in the last financial year although the percentage of Army other ranks leaving the Service is still the worst of the eight categories.

60. The SDR set full manning targets for the RAF by 2000, the Royal Navy by 2002 and the Army 'around 2004'. The Army's target included an increase of 3,300 personnel.[112] The government has since revised these targets, in the Spending Review 2000 Public Service Agreements, to full manning of the RAF and Royal Navy by March 2004, but only 97 per cent of Army manning by that date.[113] The Adjutant General told us—

    The figure we are working to is 108,500 in April 2005. The size of the Army now is about 100,000 and, therefore, we have a considerable way to go to get there. We are still committed to achieving that target. I could not possibly suggest to you it is anything other than very challenging indeed, to make that target.[114]

The Adjutant General did not seem to think that retention was the most serious aspect of the challenge—

    ... outflow from the Army, ie, the retention issue, is holding. It is about 6.4% for soldiers. So the Army is not haemorrhaging seriously in those terms ... we achieved a half per cent improvement in outflow last year, which is about 500 odd people, which is good news ...[115]

However, as we have demonstrated in the figures above, outflow is a problem for the Army and the attempts to reach full manning through recruitment drives will be futile if something is not done to staunch the flow of people leaving and thereby achieve a net gain. The Army commissioned an in-depth study into retention earlier this year which shows that the matter is being addressed but, if remedial action is not taken swiftly, the Army will fail to meet its 97 per cent manning figure by 2004. Indeed the MoD has recognised this and the Chief of the Defence Staff said recently—

    We had aimed to achieve the right mix of skills and numbers in the Armed Forces by 2005 but it now looks as if the Army are unlikely to get there until 2008.[116]

61. The Army's trained strength against requirement is worsening and the present deficit of 6,000 hides the real deficit of 8,000 against the personnel target set for the Army in the SDR. It is extremely worrying that the target date for achieving full manning in the Army keeps receding. The Army itself believes it will be difficult to achieve the 97 per cent manning target by 2004 and it is not clear to us why there should therefore be any great confidence that they will achieve full manning by 2008. We do not believe that the MoD nor the Army are yet tackling poor retention rates with sufficient urgency and imagination to address the manning problems, and we expect to see much greater effort.

62. The trained strength against requirement figures in Table 2 seem to show that the position of the Navy and the RAF is improving and the Navy's deficit continued to improve between April and December 2000 from 1,317 to 986 people. However, the RAF's deficit appears to have increased by 80 per cent in the same period, from 952 to 1,717.[117] It is likely that there are seasonal factors affecting manning figures, but the evidence that there is a steady and sustained improvement is not yet conclusive. The Second Sea Lord's view was that, although the Navy was 1300-1400 people short against the trained strength at present, the balance should be restored by 2002.[118] The Air Member for Personnel believed that the RAF was on track to achieve full manning by April 2004: at 1st September 2000 the RAF was at 97.5 per cent manning, an improvement from April 1998, when the figure was 96.6 per cent.[119] We trust that the two Services' confidence will prove to be justified, but the real difficulties are not highlighted by these global numbers. While manning and recruitment of general personnel is relatively good in the RAF and the Navy, the more intractable problems tend to lie with some areas, particularly aircrew and medical staff.

The short-term manning problem

63. So while the Armed Forces need to tackle their manning shortages with a strategic, long-term approach, this has to run parallel with short-term measures to ensure the Services have sufficient people in place to fulfil the military's current commitments.

SPECIFIC SHORTAGES

64. The overall manning picture outlined above disguises significant shortages in particular skill areas. There is a shortage of operator mechanics (skilled technicians) in the Navy. The Royal Marines have a shortage of those engaged in 'general duties'.[120] In addition to a lack of aircrew, and particularly fast jet pilots (which also affects the Navy), the RAF has shortages in avionics, electronics, and information technology; such shortages affect all three Services because of competition from the commercial sector in these growth industries.[121] Engineering graduates are also in short supply nationally.

Fast Jet Pilots

65. The most well-publicised skill shortage is of aircrew, particularly fast jet pilots, and the National Audit Office has recently investigated how this might arise from the training process. It pointed to a shortage of 98 junior fast jet pilots, 18 per cent of the requirement, which was predicted to increase to 135 by 2003. 46 Fast Jet Pilots are currently in training with the RAF, of whom two are women.[122] In the NAO's analysis, part of the problem arose from failing to meet targets for delivering new pilots to the trained strength and from more pilots leaving early or not extending their service.[123] The time taken to train fast jet pilots increased from an average of 3.2 years in 1991-92 to 5.5 years now.[124] In 1998-99 only 78.8 per cent of the target to deliver trained aircrew against the RAF's requirements was met.[125] The Chief Executive of the RAF Training Group Agency believed that the situation had now improved—

    The numbers that we have been pushing through the training system over the last ten years, the numbers delivered, have fallen short for many different reasons, some internal, some external. Those are all being addressed or have been addressed. I would like to say, touch wood, we may well be producing the required number of fast jet pilots through the training system this year for the first time for some significant time.[126]

66. The Air Member for Personnel told us that retention was a serious problem for aircrew generally—

    We are concerned about aircrew retention and it is, I would say, the number one priority on my list at the moment of things that I need to make progress on and resolve ... We still have a situation where we do not have enough pilots today. The situation will continue to get worse until about 2003 and 2004, when we expect on the fast jet side to see an improvement as the increase through the flying training process starts to pay off. We are in the process of increasing fast jet flying training output onto the squadrons to help with that process. The training machine is a finite size. It is costly to train people. The frontline can only absorb a certain number of people ... We now believe the only key we have left to play with really is to get a better return of service out of our aircrew. We are seriously engaged in that issue now.[127]

Various initiatives have been introduced recently to tackle the problem of pilots leaving to take up jobs in civilian aviation. 'Linkup' is a tri-Service scheme to encourage pilots to stay until the age of 38 or until 16 years' service has been completed in return for financial assistance towards the cost of obtaining their civilian air transport pilot's licence. When we took evidence on the MoD's Annual Reporting Cycle last year, the MoD estimated that the RAF would have 25 extra pilots available as a result of the Linkup scheme by 2002-2003.[128] The NAO reports on a similar initiative to offer pilots with two years' service remaining payment of the £10,000 which it would cost them to gain a commercial pilot's licence, as an incentive to stay in the RAF.[129] In a broader move to address shortages in key areas, 700 selected aircrew have been offered extension from 15 to 22 years' service over a four-year period.[130]

67. This is one area where it is clear that some radical thinking is being done, but more may be needed. We believe, in particular, there is room to recruit more women as pilots. On 9 February 2001, at the time of the publication of the Armed Forces' Pay Review Body's report for 2001,[131] the MoD announced two financial retention incentives for certain categories of aircrew.[132] Some of the key features include: bonuses of £10,000 for squadron leader and flight lieutenant pilots and navigators and beyond their immediate pension point (IPP) (age 38 or after 16 years' service); the same bonus for other ranks (ie Army) pilots at age 37 or after 16 years' service; £5,000 for rear-crew officers at the same ranks; £5,000 for airmen aircrew at their IPP (22 years); £5,000 for wing commanders at or beyond their IPP; and £4,000 for group captains on appointment and up to and including the fifth year in the rank. A graduated bonus scheme will operate for specialist aircrew (ie those retained after their IPP). A similar retention incentive will operate for Royal Navy Sea Harrier pilots. The initiative will apply from 1 April 2001 for two years. But the RAF is engaged in a competition with the commercial airlines for pilots in which their financial muscle can almost certainly always be outweighed by the private sector. Facing this fact of life, the answer may have to be a greater partnership rather than cranking up the competition.

68. One solution would be a more creative approach to using reservist aircrew. The RAF currently has 131 Reserve Aircrew, divided roughly equally between full-time and part-time reservists. Of the 67 full-time, 45 are pilots, and of the 64 part-time (in the Royal Auxiliary Air Force) 31 are pilots, of whom only seven are fast-jet pilots. Strike Command's policy is that reserve aircrew will supply 10% of the requirement. The Royal Navy Reserve, supporting a much smaller front line force, includes 88 pilots (81 trained to full readiness) of which 14 are fast-jet pilots (though they are on a lower level of call-out liability than the RAF's).[133]

69. It is evident that these arrangements to use reservist aircrew point to one very productive way forward. The RAF is, in a way distinct from the other services, part of a wider world—the aviation world. The initiatives the RAF has already taken in building relations with that wider world need to be built on to develop a strategy in which they work even more closely together.


108  Second Report from the Committee, Session 1999-2000, Ministry of Defence Annual Reporting Cycle, HC 158, para 87 Back

109  Armed Forces' Pay Review Body Report 2000, Cm 4565, para 51 Back

110  Speech by CDS to the RUSI, 19 December 2000 Back

111  ibid Back

112  SDR Supporting Essay 9, paras 10 and 13 Back

113  PSA target No 2, Spending Review 2000: Public Service Agreements 2001-2004, Cm 4808, p21; elaborated in Service Delivery Agreements for the Ministry of Defence, published by the Treasury on the internet, 6 November 2000  Back

114  Q 301 Back

115  Q 320 Back

116  CDS Speech to the RUSI, 19 December 2000 Back

117  Defence Analytical Service Agency, UK Armed Forces Strengths and Requirements, TSP3, 9 January 2001 Back

118  Q 277 Back

119  Q 341 Back

120  QQ 274, 279 Back

121  Q 359; Ev p 39, para 18.8 Back

122  Ref to be inserted Back

123  Training New Pilots, Report by the Comptroller and Auditor General, National Audit Office, September 2000, HC 880, para 1.8; see also Ev p 39, para 18.9 Back

124  HC 880, paras 3.10-3.11 Back

125  RAF Training Group Defence Agency Annual Report and Accounts 1998/1999, p 24 Back

126  Q 702 Back

127  Q 356 Back

128  Second Report, Session 1999-2000, Ministry of Defence Annual Reporting Cycle, HC 158, Ev p151 Back

129  NAO Report, HC 880, op cit, para 1.8; see also Ev p 39 para 18.9 Back

130  Ev p 39, para 18.8 Back

131  Cm 4993 Back

132  HC Deb, 9 February 2001, c 707w Back

133  Source: MoD (not published in this Report) Back


 
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Prepared 23 February 2001