TNAG-0063-FCO40-99-Defence-extra-costs-arising-from-the-internal-security-situa-1968 — Page 41

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FROM:

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CONFIDENTIAL AL

Mr T. J. Brack

MINISTRY OF DEFENCE

Main Building, Whitehall, LONDON S.W.1

Telephone: xxxXÀRÄXJOZZJXXXK

01-930.7022 Ext 7491

27

IDA/18A/Pt III/F1b(Air)

RECEIVED IN

R+R

ARCHIVE No. 55

42 315

198

Our reference:

· reference:

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27/c/iv

1.

DD2/1/12

Dear Captain Catlett,,

1)) 2/1/12

AMORTIZED TRA CHARGES FOR FLYING PERSONNEL

LOANED TO COMMONWEALTH COUNTRIES

Thank you for your letter of 21st February about the calculation of cur amortised training charges for flying personnel loaned to Commonwealth countries.

I think there is really only one point of difference between us and that is the question of what year or period of years should be taken as the basis for calculating the costs of training the pilots in question and thus the value of the investment we have made in them. Apart from this I am sure that we are in fact calculating the charges in the manner you suggest and I am sorry if my previous letter and the draft ̧ memorandum attached to it have led to misunderstandings about this.

3. Firstly I should say that the word "flying" should be assumed to appear in

I must have omitted it because the whole note paragraph 6 of the explanatory note.

There is no intention whatsoever of

is concerned with flying training only. including the costs of the ground training organisation within our calculations. Secondly the figures do relate to the actual number of personnel trained in a past yoar ie we are not dividing the total costs of the organisation in a former year by the output of trainees in the current year as I believe you may have imagined to be the case.

Sone years ago it was our practice for our Costings Branch to produce from time to time, on a statistical basis, a very full and detailed costing of the KAF flying truining organisation from which the annual amortized cost of training a single pilot could be deduced on the basis I have outlined. (ie by dividing the total figure by the number of pilots passing through the training organization at that time and than by

These costings the average number of years cervice hoped for from each pilot). represented a long and time-consuring operation and the last one undertaken was in

It was this figure which was the 1960/61 which gave e figure of £5,050 for a pilet. one selected by us for the additionul charge against foreign and Commonwealth countries

(I should add that for calcula- and, for convenience, we rounded it down to £5,000. ting current amortized flying training costs we have discontinued the lengthy costings exercises and now approach the problem in a completely different way by utilising the "programme elements" system which enables us to identify the expenditure each year ca - eg Basic Flying Training the various components of the flying training organisation

Thus when I said in my letter of Schools, Helicopter Schools and so on.) 24th November 1967 that we have fixed the additional charge at a rate reflecting the cost of training a pilot some years back", the charge in fact related to costs seven to eight years ago (although I should add that this figure continued to operate, for the purpose of charges against outside customers, until fairly recently because wo wero never able to tackle a re-costing until the "programme element" system was cere: cxech. However we have considered carefully your proposition that the base-lins for the computation of the charge should be moved back from the 'C0s to the '500.

11

Captain J. 7. Collett RN

Cormontealth Office London S. .1

CONERENTIAL

/We feel that