New Employment Model

The Ministry of Defence's future update to its employment package, to support and motivate service personnel.

The New Employment Model

The 2010 Strategic Defence Review recommended that a comprehensive analysis of military terms and conditions of service occurred; this review became the New Employment Model Programme (NEM).

NEM was a wide ranging review of the terms and conditions of service (TACOS) for both Regular and Reserve service personnel, covering 4 broad areas of policy:

  • accommodation
  • value and reward
  • terms of service and career management
  • training and education.

The programme concluded at the end of December 2017, though transition arrangements and the embedding of the change will continue to take a number of years.

Although not part of the NEM, the Future Armed Forces Pension Scheme is linked to its development.

What the NEM aimed to achieve

NEM aimed to provide a revised model for regular and reserve personnel which supports operational capability by providing an offer that meets the needs of the service and the aspirations of the individual by encouraging domestic stability and lifestyle choice whilst supporting mobility. The outcome will be:


  • improved recruitment and retention


  • greater responsiveness to change in the manpower requirement
  • improved internal agility, enabling the services to respond more quickly to changing requirements


  • improved value for money

What has NEM delivered

Component Detail
NEM Consultation and Results NEM undertook an extensive consultation exercise with service personnel and their families, the results of which were published on the 21 July 2014. The consultation was ran from June 2013 to February 2014. It had 2 aims: two way communication with service personnel on the principles of NEM; and to help us design effective policy. The 2 consultation reports are available on GOV.UK.
1. Simplified allowances In January 2014, NEM introduced changes to simplify the allowances process and remove avoidable bureaucracy; this involved merging and deleting some allowances.
2 Extended Standard Learning Credits (SLC) to reserves In April 2014, the SLC scheme was extended to reserves to align with regular personnel entitlements.
3. Introduced a pilot loan scheme to support service personnel and their families in purchasing a home. The Forces Help to Buy (PHTB) pilot was established in April 2014, and subsequently extended to the end of 2018. The FHTB scheme provides an interest free loan of up to 50% of salary, capped at £25,000, to help SP to purchase a home and has advanced over £202 million to help 13,400 SP buy a new home to end of December 2017.
4. Introduced new engagement structures In April 2015, new engagement structures were introduced, aligned to the Armed Forces Pension Scheme 2015, to simplify career stages (12 years, 20 years, and up to age 60).
5. Adjusted Reserves Terms and Conditions of Service (TACOS) In April 2015, a number of changes to Reserve Conditions of Service were introduced that are designed to facilitate more flexible use of the reserves.
6. Revised the Call-Out Gratuity for Reservists In April 2015, NEM reviewed the non specialist monetary cap on the reservists’ award (payable when reserves are called into permanent service). The maximum permissible value was reduced and a new cap introduced.
7. Announced cessation of Accelerated Incremental Progression (AIP) In July 2015, it was announced that AIP would cease from 31 December 2015; a necessary first step to reforming armed forces pay.
8. Introduced harmonised set of career principles and practices In September 2015, NEM introduced a set of career management principles and practices to support greater geographic and domestic stability; greater consistency in how careers are managed; and realistic lifestyle choice based on employment, stability and location factors.
9. Initiated a Flexible Duties Trial In October 2015, NEM announced that the army, RAF and Defence Healthcare, Education and Training organisation would be commencing a 1 year trial of flexible duties, which was subsequently extended, and expanded, to April 2019. The trial explores how service personnel can reduce their commitment to create a form of part time working.
10. Introduced more options to work flexibly In October 2015, NEM introduced changes to policy to give SP more flexibility in how they use their leave, including: calling forward annual leave; transferring leave between serving spouses; and an enhanced leave option. In November 2016, an automated application and approval system was introduced on JPA.
11. Enabled access to employment readiness training for spouses/civil partners In October 2015, access for sS and JFC to employment readiness training for spouses and civil partners was established through the new Career Transition Partnership contract. Both the RAF and JFC initiated pilots.
12. Distributed Training In October 2015, NEM purchased licences for advisor software which will allow each service’s training establishments and course providers to examine current courses to determine what, if any elements can be delivered nearer to the trainee’s home, regional centre or via distance/elearning.
13. Return on Service/Investment (ROS/ROI) In January 2016 the policy was updated to ensure there is a consistent approach to the application of return on service relating to the investment in training, and a robust governance process.
14. Introduced a new Armed Forces Pay Model, Pay 16 1 April 2016 saw the introduction of a new pay model (Pay16) for all armed forces regulars and reservists up to the rank of Commodore, Brigadier and Air Commodore; except those on bespoke pay scales such as professional aviators.
15. Provided education on Home Purchase The education strand aimed to aid personnel in gaining an understanding of the civilian housing market. The MOD offered advice on home ownership through the Joint Service Housing Advice Office (JSHAO), whose role has been broadened to provide through career housing advice to all personnel; rather than just at the resettlement point. Additionally, it targeted increased support for financial management skills, utilising existing initiatives such as the MoneyForce website and the opportunity to develop interactions with industry, standardising and increasing the delivery of information across the armed forces.
16. Introduced a new charging system for service family accommodation (SFA) in the UK Introduced on 1 April 2016, the Combined Accommodation Assessment System (CAAS) is the new method of setting charges for SFA in the UK and overseas, and replaced the outdated 4 Tier Grading (4TG) System (except for British Forces Germany). CAAS SFA is a fairer and less subjective system than the 4TG System, and ensures that charges for SFA are set in accordance with modern, nationally recognised standards.
17. Introduced a new charging system for service family accommodation overseas Introduced from April 2016 service personnel also saw a change in their accommodation grading and charges overseas; though rollout to all countries was not fully complete until 2017.
18. Reformed Enhanced Learning Credits (ELC) and Further Education and Higher Education (FEHE) Schemes From 1 April 2016 ELCs were reformed to encourage greater in service elective personal development at important points during a career. Auto-enrolment has also been introduced to ensure all regular service personnel are eligible and will remove costly and complex casework.
19. Enabled service personnel to access loans for rental deposits Introduced in July 2016, the Tenancy Deposit Loan Scheme has helped service personnel to access the pan-Civil Service Tenancy Deposit Loan Scheme.
20. Introduced Officers’ Talent Management (OTM) OTM provides new ways to identify, assess and develop the abilities of officers in order to place the right people in the right jobs. It targets officers in the OF3 to OF6 bracket, as those most likely to be employed across Defence and away from branch/cap badge related duties. NEM introduced a set of career fields in 2017 and rolled out a new annual report for officers (OJAR16) with new Core and Functional KSE and Career Field markers, on a rank by rank basis, with all officers now on the new format. In March 2017, a number of new career management information fields were also added to the Joint Personnel Administration system (JPA) in the Self Service, Establishment Administration and Career Management areas which provides increased career management functionality for all service personnel.
Published 12 December 2012
Last updated 19 February 2018 + show all updates
  1. Updated information on what the New Employment Model has achieved.

  2. Updated the announcement.

  3. Updated contact details.

  4. Added pay reform video and link to pay model booklet.

  5. Updated NEM information.

  6. Added details announcement about a new charging system for Service Family Accommodation (SFA),

  7. Added details of NEM consultation results

  8. Updated page contents.

  9. Updated details of the NEM

  10. First published.