Treasury rules apply to the whole budget. If I recollect, each year the MoD bids to the Treasury for money to fulfil its tasks. The MoD bid is made up of bids from the 3 services. The RAF bid will include so many hours flying for each aircraft type. There is an inbuilt contingency.
When I was in control of a small portion of hours allocations on a daily basis, as Tanker Plans, I worked from pots of hours allocated to each squadron and aircraft type based on training needs etc. Some squadrons would run out of hours and we would look for other pots or arrange swaps. As the year wore on problems would inevitably arise as there was less and less flex.
There is no Treasury limit on hours, but the Treasury expects the MoD to work within budget. Once hours are used up the only way to get more is to cut something else and that decision was above my pay grade. In fact, because of pressures on Wg Crs and below most people would avoid going higher at all costs so their lordships would not be aware of any shortfalls until the sh*t hit the fan (there were no hours for jollies).
Tigs, let those of us who are Cameron's constituents know how you get on.
The link to this thread is going around other sites on the net.
