9 Full implementation of new core training has been delayed by nearly six years. Several events have affected the Department's original assumptions about how its 25-year contract with Ascent would work. These include a substantial reduction in the number of aircrew entering training each year and a decrease in overall funding from a forecast £6.8 billion to £3.2 billion. There were also delays to new helicopter training because the Department thought it owned existing training aircraft when it did not. The Department also designed Ascent's contract assuming that it would finance the costs through the private finance initiative (PFI). This assumption changed, which has challenged overall affordability. The changes have taken time to resolve and the new core training is now scheduled to be running at full capacity by December 2019 (paragraphs 1.13 to 1.14 and 2.19 to 2.36).
10 The Department still controls many factors that affect training, which complicates its ability to manage the contract with Ascent. Ascent is responsible for factors such as training design and availability of aircraft bought through its contract. The Department is responsible for factors such as student selection, providing military instructors, availability of airspace for training and aircraft bought outside its contract with Ascent. It also has wide-ranging approval rights and it has become involved in aspects of Ascent's work, such as courseware design. This undermines the Department's ability to hold Ascent to account for activities it has sought to transfer out. The risk to UK military capability of not training enough aircrew to meet military needs ultimately rests with the Department and cannot be transferred (paragraphs 2.4 to 2.12).
11 The Department has struggled to fully hold Ascent to account for its performance. As at 31 March 2015, the Department had paid Ascent £143.3 million for training services. The Department had deducted just £308,000 from Ascent's payments for it failing to meet its responsibilities. We found that the Department has struggled to apply financial performance deductions, with some agreed only after many months of negotiation. This is despite the Department having significant concerns about Ascent's performance between 2008 and 2012, including its cost and schedule control and the quality of its work. The Department raised these concerns with Ascent's shareholders, who acted to address them. The Department considers that, since 2012, Ascent's performance has improved (paragraphs 2.13 to 2.16).
12 Contract incentives, set by the Department, do not encourage Ascent to improve training quality or reduce overall training time and cost. Incentives for improving core training form only around 1% of potential payments to Ascent. They also incentivise completion of training by number of students, rather than skills when they join operational training units. Greater incentives are available to Ascent for undertaking training work. Ascent's motivation to look for cost reductions has also been affected by reductions in the overall value of the programme to implement new core training. Its potential earnings have reduced while its planning and infrastructure costs have been largely unaffected by the changes (paragraphs 2.39 to 2.43).
13 Contracting with an external provider for fixed training capacity means the Department has less flexibility to respond quickly to changes. Training aircrew takes many years. Rebalancing the infrastructure and personnel required to train them takes time and carries costs. Historically the Department has had capacity to increase or decrease core training and has had full control of training activity. Implementing the new core training incrementally helped the Department avoid buying excess training when it reduced the number of aircrew it needed. However, the new core training has little spare capacity. Once fully implemented, increasing the training needed will take time and add costs. Having a contracted for service also means that any future decreases in the amount of training needed will require contract renegotiations. It could increase the unit cost of training aircrew as the contractor would still need a return on any investment in training infrastructure (paragraphs 2.26 to 2.28).
14 Moving to the new training packages by 2018 will put pressure on the Department's ability to train the right number of aircrew at the right time. The Department needs enough capacity to provide military instructors for both current and new training systems during the move. Equipment, and in some cases the legacy contracts, cannot be extended. Further delays could increase the risk of a gap in training that would result in fewer trained aircrew than needed. The Department is developing plans to create a surplus of trained students to cover training gaps. These plans are at an early stage and cannot be formally agreed until the fixed-wing and helicopter training packages are agreed (paragraphs 1.15 to 1.18).
15 The Department does not use effectively the data it has to understand current training performance. The Department has data on training activity but does not hold it centrally - rather in pockets throughout the Department. The Department does not routinely analyse it and subjects it to limited quality assurance. This means that when the Department contracted for an external provider it had no robust baseline for actual training time and cost, or aircrew ability at each stage of training from selection to combat ready. This lack of robust data limits the ability of the Department to understand performance or set Ascent meaningful performance targets. Without a robust performance baseline it will also struggle to measure the impact of changes to training and to assess whether future performance is better (paragraphs 3.7 to 3.36).
16 The process for reducing the overall cost of flying training is not clear. Staff understand high level responsibilities for getting benefits from new core training. However, many benefits of improved core training will be realised in operational training, which is managed under different funding, accountability and reporting arrangements. It is not clear whether cost and time savings will be identified and used to improve operational training or released to reduce overall costs to defence. It is also unclear how the armed services will be incentivised to seek opportunities to identify and exploit these benefits (paragraphs 3.4 to 3.5).