Greater incentives and data analysis needed for MoD pilot training contract – NAO

15 June 2015

The Ministry of Defence (MoD) must encourage better performance from its military flying training contractor by incentivising it to work as a partner more effectively, according to a report.

The National Audit Office (NAO) examined the implementation of the MoD’s new training system and has concluded that a number of factors caused a delay of almost six years in its full implementation.

The new training system, the United Kingdom Military Flying Training System, implemented through five different training packages, was scheduled to be at full capacity by 2014. Only two packages have been implemented, and full training capacity is not now planned until December 2019.

The NAO report said the delay had been caused by a combination of a reduction in the size of the aircraft fleet, more than halving the funding budget, and the MoD’s concerns about contractor performance between 2008 and 2012, although it acknowledged that this has since improved.

Industry provider Ascent was awarded a 25-year contract to develop and manage a new system, to reduce the time and cost of training aircrew, in 2008. Ascent is responsible for providing aircraft and simulators, running training courses and training an agreed number of aircrew each year.

The MoD still controls many factors that affect training, such as student selection, and the provision of military instructors and airspace for training, the NAO said.

The NAO concluded a lack of data analysis by the MoD means it has no baseline for training times or costs to measure Ascent’s performance or set meaningful performance targets. It added performance-linked pay incentives are not encouraging Ascent to improve training or reduce costs as they form only around one per cent of potential payments, and incentivise completion of training by student quantity rather than quality.

The NAO also noted that by transferring control of training to a contracted provider, the MoD had less flexibility to increase or decrease training capacity without requiring contract renegotiations and incurring extra costs and time. This could cause further delays and a gap in training, it concluded.

The report recommended that to achieve value for money from the contract, the MoD must encourage better performance from Ascent by more effectively incentivising it to work as a partner.

The department also needs to assess the cost and time implications of increasing training capacity and agree formal contingency plans for covering gaps in training during the move to new training.

NAO head Amyas Morse said changes to the scope of the new system, its budget and the approach to financing meant implementing the new flying training had been challenging, and had understandably taken the MoD time to resolve.

“Contractor performance has improved, but there is much to do if the department is to achieve the planned benefits of its new approach,” he said.

“The department needs to understand better actual training performance and what affects performance before it can secure significant improvements from Ascent. Otherwise, there is a real risk that moving to the new training will affect the military’s ability to train the right number of aircrew at the right time.”

In response, minister for defence procurement Philip Dunne said: "The programme had a difficult start after initial contracts were let under a PFI contract in 2008. The programme was thoroughly overhauled in 2012 and early implementation issues are now behind us. We are now on a much firmer footing and moving forward to deliver flight training for aircrew, more rapidly and efficiently, with greater flexibility to adapt to new platforms. [The NAO's report] is an extremely useful piece of work that ensures we are moving in the right direction, and that the capability we are delivering will provide value for money to the UK taxpayer."

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