The forces have accepted the idea that, as in many areas of civilian life, pay bands should overlap the different ranks, so that people with special skills and experience can be paid more even if promotion is not available.
The recommendations have to be approved by Michael Portillo, the Secretary of State for Defence, and a formal announcement is expected in the next few months.
The plans are based on last year's recommendations by Michael Bett, the former deputy chairman of British Telecom who conducted a radical review of armed forces' pay and conditions. Most of his recommendations have been thrown out, notably plans to "flatten" the hierarchy by merging certain ranks. The only recommendation accepted was the abolition of the "five-star" ranks of Admiral of the Fleet, Field Marshal and Marshal of the Royal Air Force. But Mr Bett's proposals to merge major-generals with lieutenant-generals and full colonels with brigadiers, and their Navy and RAF equivalents, have been ditched.
With the Army reducing its personnel to 100,000 by the end of the century, the RAF to 60,000 and the Navy to 44,000, fewer units, aircraft and ships, and more tasks shared between the services, the number of vacancies for people in the top ranks is diminished.
Mr Bett is known as a keen advocate of performance- related pay. His recommendation is seen as helpful as the services become even more technical, and face difficulty retaining highly qualified specialists such as electronic warfare experts, computer, signals and aviation engineers and pilots. The working group on the Bett report, made up of senior military officers and civilian officials, has recommended that these staff be paid something closer to the going rate for the job.
The working group rejected Mr Bett's recommendation that the right of service personnel to draw a pension from the age of 40 should be abolished. The proposal caused an outcry within the armed forces as this right was seen as vital to help people setting up in civilian life while they might still have young children. The group strongly recommended the right be retained.
The sources also confirmed that the Army Board had rejected the idea of recruiting women into the frontline but was looking at greater opportunities in all the other branches of the service, including artillery and engineers, where women already do some jobs.Reuse content