CONFIDENTIAL
are the best that can be provided until ERB-based data become
available. Some points of explanation are needed:
a.
The "cash income" line consists of payments
recovered from customers.
b.
The "policy subsidy" line includes UKMTAS, DPF and DSF subsidies for training course charges. The totals do not match the outturn figures for the three funds,
principally because the latter also help to subsidize:
(1) The costs of LSP overseas.
(2) Messing and accommodation charges for students
in the UK.
c. The "balance" line represents in effect a hidden
element of subsidy, largely caused by the difference
between the full costs of courses and the extra-cost
formula which is the charging basis for non-dedicated
training.
11. In determining the way ahead, it will be necessary to
consider both the procedures that should come into effect when
the New Management Strategy has been fully implemented, and the regime that should operate over the intervening period.
12.
The Future. Under fully-fledged budgetary arrangements, it is envisaged that the single Service training managers will have agreed targets for receipts business. They will therefore have the appropriate incentive to provide capacity for F&C training, which will itself become more amenable to
central scrutiny and budgetary control. The Defence Staff
will thus be in a position both to provide timely guidance to
the training budget-holders on the extent of such capacity to
be provided to meet defence and foreign policy objectives, and
to ensure that mismatches between costs and receipts are
recognized and dealt with in an appropriate manner, including
ang.1s2
G-5 CONFIDENTIAL
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