I think you missed the point about the military already being paid by us so why pay them twice? From where did the £6.2million arise in the first instance? As for CAT subsidising LARS, well that is a long standing dispute about who subsidisies who and the answers is often dependant upon whether or not you pay for your flying or someone else does.
The UK system is a complete mess. Anyone who suggests otherwise is suffering from Stockholm syndrome. Provide radar service across the country and be done with it.
It is complex, well supported by those whose careers are built upon justifying it, multi-layered, public/private etc. But completely unfit for its stated purpose.
Sorry, I've re-read and not fully answered your question. The £6.2M came entirely from the en-route charging scheme. Back then the airlines complained about the hypothecation of finance to LARS - I can only assume they still do. I estimate that the real cost of the current LARS infrastructure is probably closer to £30M.
Some other points of clarification:
As taxpayers we pay for the military to fight wars, not necessarily to provide security at the Olympics or LARS. :)
My recollection is that about half the cash went to civilian units. The UK operates a Joint and Integrated ATS provision and this works quite well.
Peter previously asserted that the overwhelming reason for LARS is to protect CAS and for national security. In most respects this assertion is incorrect. A quick look at the current LARS coverage map clearly indicates minimal potential for interaction with CAS (Farnborough aside).
Farnborough LARS was most definitely expanded to provide additional protection for the London TMA/CTR. I'm pretty sure that NATS made a business decision to pay for a significant chunk of this.
I would tend to agree with Jason's comment about it being a mess, this being due to the way in which it has evolved. Don't get me wrong, I would love to see some form of nationwide coordinated LARS similar to the military provided middle air services. I just wonder how it would be funded.
Peter previously asserted that the overwhelming reason for LARS is to protect CAS and for national security. In most respects this assertion is incorrect. A quick look at the current LARS coverage map clearly indicates minimal potential for interaction with CAS (Farnborough aside).
However, Farnborough does provide a service over most of the CAS that is most commonly busted in the UK.
Yet, is there much military flying in that part of the UK, of the type that may need a radar service for whatever purpose, especially navigational assistance?
I don't run UK ATC 
but it's often been stated apparently officially that Farnborough is funded to reduce CAS busts. And its recent extension was done for that reason. I just do not believe that it is funded to provide a service to GA. In the UK, nobody provides a service to GA for the benefit of GA - because, as we are often reminded, most of GA is below 2T and does not pay Eurocontrol charges.
I don't have an issue with Farnborough (they provide a fine service, though much more so on bad-weather days) but I would have thought that since it is mostly the airlines that benefit from CAS, they should not complain about funding it.
And yes CAS is very very expensive, which is why the extensive UK Class G, even the bits with IAPs, suits everybody...
As taxpayers we pay for the military to fight wars, not necessarily to provide security at the Olympics or LARS. :)
Well actually we pay for them no matter what they do....
Spot on JasonC, which makes one wonder why the "old chestnut" of costs so frequently arises? I have no problem with anyone charging for any ADDITIONAL costs but when one considers that the ENTIRE miltary and all it's structures are already fully funded it is disingenuous, to say the least, to talk of the costs provided by the military controllers.
No, we as tax payers pay a specific amount to meet specific requirements - i is a finite resource. For decades various governments have neglected to recognize this fact, over-tasking and under-funding the military just like many other public services.
Anyway, back to the subject. Providing some form of enhanced LARS capability would cost extra money, lots of it.
I would then ask: what is the objective of the review, if (apparently) no increase in funding is to be considered?
I would think it would be to look at whether the units providing the service are the right ones and they still want to do it.
Providing some form of enhanced LARS capability would cost extra money, lots of it.
Perhaps initially, but I strongly believe that sorting out the mess that it is in now will deliver much greater savings and efficiency in the long term.
Sometimes I really struggle to understand why the UK, a country with so many different types of aircraft movements, has so many issues of funding and provision of consistent services in an organised and cost-effective manner for the safer transport of the general public.
