2.39 Ascent's contract has four main payment mechanisms (Figure 14). Two pay Ascent for designing and providing training. The others offer incentives to improve Ascent's performance in providing training.
2.40 As at 31 March 2015, the Department had paid Ascent £143.3 million. Only around £1.7 million of this was through incentive payments. This is partly because new core training has not been fully introduced (paragraphs 1.13 to 1.14). However, our review suggests the contract's incentives do not sufficiently encourage Ascent to achieve the objectives of new core training.
2.41 The whole system incentive fee seeks to reward Ascent for achieving the three aims of the new core training. These are to:
• optimise time in training;
• reduce costs; and
• close the gap between the skills of aircrew finishing training and the skills required to use front-line aircraft.
Figure 14 Payments to Ascent as at 31 March 2015
Note 1 Single payment of whole system incentive fee for rear-crew training in April 2014. Source: National Audit Office analysis of Ministry of Defence data |
2.42 However, the fee does not incentivise Ascent to achieve these aims because:
• the fee mechanism assumes a volume of advanced jet training Ascent cannot meet, because fewer aircrew are needed (paragraphs 2.19 to 2.23);
• the fee forms only around 1% of potential payments to Ascent, which is insufficient as an incentive for it to innovate;
• Ascent cannot claim mitigating factors if the Department's actions prevent it meeting whole system incentive fee performance targets; and
• the fee offers an incentive for completing training by number of students, rather than student ability when they join operational training units.
2.43 The course completion incentive fee rewards Ascent for providing an agreed amount of training work on time. This fee is taken from a fixed, annually agreed amount that is based on the number of courses the Department asks Ascent to provide that year. If the Department chooses not to run a course (for example, because it decides to vary the flow of students during the year) the total amount available to Ascent is not reduced. Ascent earns its fee on course completion regardless of how many students attend, complete or pass the course.
2.44 When the Department decided to contract with an external provider, it expected them to challenge how training was done and to innovate. Our interviews with the Department identified little innovation. Interviewees noted that:
• although training will be done with fewer aircraft and more simulators, there will be no significant changes to training design;
• reductions in training time are forecast to be marginal (against the best-case baselines); and
• Ascent's training design team includes a number of ex-military employees whose awareness of front-line demands is increasingly out of date, leading to training materials of poor quality (paragraph 2.9) or that are in some cases similar to existing materials.
2.45 The Department has also retained significant control over core training because it approves the design and provision of many of Ascent's services. This ensures the Department can influence training. However, it risks losing potential innovation, particularly if the armed services resist radical changes to training. Ascent noted that many existing training materials were adequate and did not require radical change. It also stated that proposed training design innovations had been rejected by the Department. The training system now planned is the result of a compromise with the Department, where a more conservative approach to change has been taken.