3.24 Robust information on costs is critical to identifying opportunities for cost reduction. The Department needs this information to decide what to stop, change or continue.
3.25 We found no evidence of the Department tracking costs of flying training to identify which activities affected cost, and to focus work on reducing costs. We have seen high-level estimates for different aircrew, such as the cost of training a fast-jet pilot or an Apache helicopter pilot. However, these estimates were one-off exercises for business cases or isolated reviews.
3.26 The Department has no common approach to costing. It lacks a robust and agreed methodology for costing main training aspects (for example, the cost of a flying hour on each of its aircraft). It has also not clearly defined which costs should be included.
3.27 The Royal Air Force is reviewing its assumed flying hour rates for each aircraft. The review has identified errors and inconsistencies in the assumptions applied to historic rates. The Royal Air Force is revising its methodology and understanding of its cost base. It aims to:
• identify fixed and variable costs more accurately;
• allot overheads more efficiently; and
• make it easier to update rates more often.
3.28 Ascent will run core training in the future, but the Department will still be responsible for factors that affect cost. The Department must understand the costs of different parts of flying training to challenge Ascent's performance and reduce costs through the areas it still controls. For example, the Department selects students, and student failure is a major contributor to cost. We found no evidence of the Department tracking quality either to:
• identify the causes of any failures; or
• identify those most likely to fail.
3.29 The Department must predict success and failure quickly to avoid unnecessary sunk costs, particularly towards the end of training where costs are higher.