Continuity of Education Allowance

Thursday 16th December 2010 Written Statements

[The Minister for the Armed Forces (Nick Harvey)]

As announced following the strategic defence and security review, the Ministry of Defence is reviewing the broad range of allowances paid to service personnel. Work is ongoing to define fully the package of changes, but we are now able to announce some changes to the continuity of education allowance (CEA).

The Government place a very high priority on the welfare of service personnel and their families. Due to the requirements of service, some personnel relocate frequently, and it is important to ensure that their children are not disadvantaged by this requirement and have continuity of education. This continuity is not achievable through the day school sector for service personnel whose children accompany them on necessary relocations both at home and overseas. The importance of the allowance in supporting accompanied service and in enabling the armed forces to deploy to meet service needs is well understood. Nevertheless, it represents a significant investment, around £180 million per annum, to support some 5,500 personnel, fewer than 3% of the total number of service personnel. In the current fiscal climate, we must be sure that this expenditure is fully justified. I am therefore leading a review of CEA.

The review will consider the fundamental rationale for the allowance, look at alternatives, including a lesser reliance on independent schools, and at the justification for the current set of entitlements. Longer-term work on the development of a new employment model for service personnel is also likely to impact on the requirement for this allowance, and the review will consider what this might imply. The review will involve consultation with the service community, families federations and those outside who have an interest. I want to keep the period of uncertainty about the future of CEA to a minimum and intend to announce the conclusions of the review in the spring. Any changes will be promulgated well before they are implemented.

In parallel with this review we have put in place some immediate changes to the detailed rules on eligibility and payment structures for CEA and the governance of claims for the allowance. These changes should reduce our expenditure on the allowance by over £20 million per annum. The changes reflect the fundamental justification for the allowance—a commitment on the part of the individual to accompanied service. The most significant of these changes therefore involves withdrawing eligibility for CEA from personnel who serve unaccompanied by their families in some locations (principally but not exclusively MOD London) and in sea-going assignments. Appropriate transitional arrangements have been put in place to ensure individuals who are currently drawing CEA under these 'involuntary separation’ rules will not be unfairly disadvantaged.