It's not just the pointy end that this is affecting. A certain company who has large interests in training the UK military has as it's core ethos in recruiting is to find those who've completed 22yrs+ and want nothing more than their pension plus some beer tokens.
In years gone by when you could afford to pay your mortgage on your pension this would have been fine. However, todays service leavers cannot service their debts on a pension and need a decent income to suppliment their pension.
The thing that is being forgotten is the fact that todays service leavers are a lot more savvy as to their worth and will not return to whence they came albeit in a civvy suit, when they know they can make a lot more money with their transferable skills.
So the more the MoD rely on contract service agreements, the less the services will have a need to train for those tasks, hence the contractors will have less trained and certified manpower to recruit from. Eventually nobody will have anybody trained to do anything.
Downward spiral anyone?