The rules on formation badges are in Chapter 7 of AP3003 which is on the RAF web site and are basically as follows:
All RAF formations whether classified as operational or not can apply for the grant of a badge provided they have their own separate establishment, number not less than 75 personnel, have been in existence for 5 years and expect to continue for at least a further 5 or exceptionally, have made some conspicuous contribution to honour of the RAF. When a unit is too small to have its own badge it is permitted to use that of the Command to which it belongs, substituting its own name for that of the Command.
RAF - Short History of the Royal Air Force