From: Captain J.#. Collett, RN
CONFIDENTIAL
DD 2/1/12 (17)
Registry
COMMON FALTH OFFICE, 27
LONDON, 3.7.1
21 February 1968
.
27/
27/2/10
Amortised Training Charges for Plving
Personnel Loaned to Commonwealth Countries.
I am sorry that we have taken so long to comment on your letter IDA(18A/Flb(Air) of 2ly November about the above, and to thank you for the explanatory note enclosed with it. We have, meanwhile, been discussing with the Treasury the sun which will be made available for our military technical assistance programes in 1968/69. These discussions, which have just been concluded, have resulted in a very heavy cut in the funds available to us. Despite our strong representations that, in present circumstances, it would be right not to proceed with the proposal that transfers should be made to Defence Votes for amortised flying training charges from 1963/69 onwards, the Treasury have insisted that those transfers must be made.
2. Faced with this decision, I am afraid we must ask you to reconsider the figure of 35,000 per pilot per annum which your letter under reference gave as the amortised cost of flying training which you would seek to recover, We do not feel that we could justify the basis on which this figue has been worked out to our Finance Department, who will wish to have an explanation of it before any trailers are made to Ministry of Defence Votes. It follows that we would be unable to defend it in the face of the searching questions which will no doubt be put to us by those Governments to whom we can agree to pass the charges on.
3. I an, in fact, puzzled as to precisely how you have arrived at the figure of $5,000 per pilot per annun, and would welcome an explanation. in paragraph 3 of your letter unter reference, you state that you have not used the current (amortised) replacement cost of training a pilot as the basis for the charge, and we of course agree that to have done this would have boon unreasonable. In paragraph 6 of the explanatory note cnclosed with your letter under reference, however, you state that "the change has been calculated by assessing the total annual cost of the B.A.P. training organisation", etc., etc. If i have understood the position correctly, these two statements are inconsistent. Our view is that the charges ought to be assessed by dividing the average annual cost some
/ten
T. J. Becx, £&q•,
Ministry of Dofence,
Flb(Air),
Main Building.
CONFIDENTIAL