§ Dr. David ClarkTo ask the Secretary of State for Defence (1) how many members of the(a) Army (b) Royal Air Force and (c) Royal Navy had applied for an interest-free advance of pay for house purchase as at 1 October; [1465]
(2) what annual budget has been set aside for his Department's interest-free advance of pay for house purchase scheme, and if he will make a statement. [1466]
§ Mr. SoamesThe long service advance of pay scheme—LSAP—provides an interest-free advance of pay up to a maximum of £8,500 to assist personnel with house purchase. The advance is repaid over 10 years or a lesser period if personnel have less that 10 years to serve. The LSAP scheme has been available in the Navy since 1963, but on 1 August 1996 it was extended on a limited basis to the other two services primarily as a result of the demise of the married quarter discount sales scheme. The number of Army and RAF personnel who applied for an advance between 1 August 96 and 1 October 96 was as follows:
- Army: 335
- RAF: 224.
It is not known how many personnel in the RN have applied for an LSAP since 1963. However, there were 9,321 loans outstanding on 1 October 1996.
The scheme in the Royal Navy is cost neutral with repayments broadly matching advances. A total of £6 million per annum has been earmarked to fund the scheme over the early years in the Army and Royal Air Force. However, the net outlay will reduce as repayments increase and the scheme in these two services is expected to be cost neutral after 10 years' operation.