Pay body warns of military exodus
Ministers have been warned of the potential loss of "talented and experienced" members of the armed forces in response to cuts to pay and pensions.
The Armed Forces' Pay Review Body urged the Ministry of Defence (MoD) to be "alert" and ready to act if there was any increase in the "outflow of key personnel".
Service personnel are facing a two-year pay freeze - unless they earn less than £21,000 a year - followed by two further years in which rises will be capped at 1%.
In its 2012 annual report, the review body said it had heard "widespread concern" that the pay freeze, cuts in allowances and high inflation meant "a noticeable reduction in real income for many personnel".
It also pointed to a "high level of uncertainty" resulting from the redundancy programme and restructuring arising from the 2010 Strategic Defence and Security Review (SDSR) and proposed reforms to pensions.
"The cumulative effect of these uncertainties creates a risk that some members of the armed forces may reach a point where the combination of SDSR changes, financial issues and continuing pressures arising from the sustained high operational tempo makes them re-evaluate their reasons for joining and remaining in the armed forces and leads to loss of talented and experienced personnel," the independent pay advisers wrote.
"It is essential that MoD is alert to the potential impact of changes on morale and is ready to respond to any potential increase in outflow of key personnel. There will also need to be a period of sustained, effective communication with service personnel and their families to ensure they have the best possible understanding of how the multiple prospective changes affect them personally."
The body said that morale and motivation appeared still to be "generally... very good" but warned there was a possibility that might change, particularly as operations in Afghanistan come to an end over the next three years.
"Overall, we believe that the cumulative effect of the pay freeze and other reductions to disposable income risks damaging the morale and motivation of Service personnel. The Government's announcement of a further two years of pay constraint is likely to accentuate the risk if personnel and their families feel that the particular circumstances of service life are not being taken account of in the Government's pay policy.
"Morale and motivation among those serving on operations, particularly in Afghanistan, appear generally to be very good. This may change as and when operations wind down and the military is placed on a less expeditionary footing."