Does Cutting Job’s result in savings or how long till they do….?
If the government makes an average Sailor redundant of 5 years Service:
The taxpayer will have already paid out:
£170,000 in Training, wages and allowances
It will further cost the taxpayer to make a sailor redundant:
Redundancy package consisting of Goodbye and training funds, gratuity, pension £20k per head
Loss of Tax revenue and input to UK Economy from employment per year: £6000 (at least)
Total cost to “fire” a sailor on the spot by averages – 20 to 30 thousand pounds.
Time to recoup money should sailor enter employment via tax:
3- 4 years.
Time to recoup money should sailor be unemployed for 1 year with welfare support :
5-6 years
Average time before real time savings enter MoD based on a mix of 50% employed at redundancy and 50% out of work:
If 5000, sailors were made redundant on October 1st 2011: it would take until 2017 before real savings were felt from cuts.
However:
A) Impact on under manning of global operations could result in increased equipment costs, emergency recruitment or increased personnel costs due to additional strain on fleet. Strategic and future operational needs have not been taken into consideration by MoD. (10)
B) If the Sailor was kept in employment with MoD they would contribute in some form of Tax and to the UK Economy between now and 2017
£ 35-50,000 atleast in Tax/investment from now to 2017, therefore-making savings at the MoD of 20,000 pounds per year but not until 2017. (6) (7)
This concludes, the average Sailor will at present, cost more, to the Taxpayer for 3-4 years then if they were employed with the MoD – serving.
It is unlikely that the Taxpayer will feel any benefit from these redundancies before the end of this parliament. (2014/15)
(1) http://www.armedforces.co.uk/royalnavypayscales.htm
(2) This does not include costs of welfare support, utility, staff, etc.
(3) This has not also taken in support lifetime support, early pension, future gratuity.
(4) There are too many variances in allowances, wages and ranks to gain accurate figures at this time
(5) These are rough estimates based on average sailor of any rank. We will aim to get more accurate figures or a spread of possible figures to rank in the near future. These figures are provisional.
(6) It would only cost a small amount more to keep sailors employment considering Taxes taken while in employment.
(7) If ex service personnel went into equal or better paid employment.
(8) Loss of input from Sailor between now and 2017 has not been taking into consideration.
(9) Lack of morale seems to be an reoccuring theme
(10) Further Anaylsis required into employment numbers for Naval service required in future, projected with ship numbers and possible strategic outlooks.
This work, unless otherwise expressly stated, is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.
