The allowance provides funds to ensure that the children of Service personnel receive continuous education which would be impossible if they accompanied their serving parent or parents on postings in the UK or overseas.
The review confirms that CEA contributes to operational effectiveness by supporting family mobility and accompanied service, and therefore there will be no changes to the key principles of CEA, which are:
- current rates for parental contributions (a minimum of 10 per cent of the school fees) will be maintained
- parents will continue to be able to choose the school that is most appropriate for their children from the wide range of independent and state schools on the MOD’s Accredited Schools Database
- there will be no change to the allowances for special needs, North Wales and day school provision.
However, some significant changes to the policy regulations will be introduced. There will be one new restriction on the age range for eligible children which will mean that initial claims for Year 12 and 13 children who have not previously been in continuous receipt of CEA will no longer be permitted.
The MOD will also seek to establish a central payment system so that CEA is paid directly to the school rather than to the claimant.
In addition, parents will be encouraged to use state boarding schools which provide continuity of education at a lower cost to both the MOD and to parents as the state already funds the tuition element of costs.
The MOD will continue to simplify CEA policy to ensure that its purpose and procedures are well understood.
Armed Forces Minister Nick Harvey said:
The Government is strongly committed to supporting Service personnel and their families and we will ensure that the interests of their children are fully protected.
This review found that although the allowance is a key contribution to operational effectiveness, it is expensive, complex to administer and has had a weak governance structure.
We will move forward by improving governance and payment arrangements and tightening the rules while continuing to look at the best ways to support Service personnel and families.
Chief of the Defence Staff General Sir David Richards said:
This is a good outcome. I am pleased that we have been able to maintain CEA for those who need it, while improving value for money.
The future terms and conditions of service must deliver a package that is fair both to those who have more settled careers and those who must still be mobile and wish to be accompanied.
The review of CEA was originally announced by the Secretary of State as part of the Strategic Defence and Security Review in October 2010. In December 2010, the MOD announced changes to CEA rules with the aim of saving more than £20m per year.
The rates of CEA were not altered, but the rules on eligibility for the allowances were tightened. These changes became effective from 1 April 2011.
At the same time, in December 2010, the Armed Forces Minister Nick Harvey announced a separate review of CEA to consider the fundamental rationale for the allowance, the justification for the current set of entitlements, and to look at alternatives, including less reliance on independent schools.
Service personnel can claim up to £6,074 per child per term but must pay at least 10 per cent of the school fees. Separate arrangements are in place for those children with special educational needs.
In the future, CEA is expected to change more fundamentally as the MOD introduces more stable career and living arrangements for the Armed Forces. The consequent reduction in the requirement for mobility is expected to considerably reduce the need for CEA.
This reduction in need, together with the savings from the governance changes already being implemented, is expected to reduce expenditure on CEA by at least half by 2020 compared with the baseline established at the Strategic Defence and Security Review.
CEA costs about £180m a year to support the 7,900 children of about 5,500 Service claimants; about £70m of this is to settle the tax liability that would otherwise be incurred by claimants serving in the UK.
Parents are also required to contribute a minimum of 10 per cent of the school fees; many pay much more, as the maximum allowance does not cover their chosen school’s fees.
The 7,900 Service children are distributed across about 440 schools, 25 of which are state boarding schools, and they represent about 11 per cent of the total number of children in boarding schools in the UK.