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16.1  |  The welfare of Service Personnel
“The way to bring the covenant back into balance was to make sure we were
expending sufficient resources on looking after the legitimate needs of individuals,
soldiers and their families in terms of their pay allowances, accommodation, and the
equipment … you would want to give these people.
“That’s where I think we were deficient. That’s where we had to work quite hard
to get it back in balance. I know I said in 2006 the army was running hot. That is
correct … I think we were getting quite close to a seizing-up moment in 2006.”98
151.  The Inquiry asked Gen Dannatt whether work to bring the military covenant back
into balance should not have begun earlier.99 He told the Inquiry that he had no criticism
of his predecessor, and that it was:
“… often easier to start something at the start of an appointment when you have
had the chance to survey the landscape … and coming from the position of
Commander‑in-Chief … with time to go round the Army, [I] could sense both at
home and abroad the pressures building on soldiers and their families and deciding
something had to be done.”
Introduction of the Operational Allowance
152.  Mr Browne’s Private Secretary wrote to No.10 on 9 October, setting out proposed
new arrangements for supporting Service Personnel on operations.100 The letter reported
that, to reflect the current, high operational tempo and provide an immediate boost
to the lowest paid Service Personnel, Mr Browne had agreed with Mr Gordon Brown,
the Chancellor of the Exchequer, that the Government would introduce a tax-free
Operational Allowance of £2,400 for all Service Personnel who completed a six-month
tour in either Iraq, Afghanistan, the Balkans or certain other operations. Proportional
amounts would be paid to those who completed shorter tours. The Allowance would
be backdated to 1 April 2006.
153.  The MOD had considered offering tax-free pay while on operations, but had
concluded that this would not target the lowest paid and would be difficult to administer.
154.  The letter also advised that the MOD would discuss the scope for abating Council
Tax charges for Service Personnel deployed on operations with the Department of
Communities and Local Government (DCLG). The failure of Local Authorities to exercise
discretion on those charges was a “regular complaint”.
155.  The letter also advised that the free telephone call allowance would be raised from
20 to 30 minutes a week.
98  Public hearing, 28 July 2010, pages 20-21.
99  Public hearing, 28 July 2010, page 98.
100  Letter PS/Secretary of State [MOD] to Phillipson, 9 October 2006, ‘A Package for Service Personnel
on Operations’.
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