Moving IT ‘spy’ systems set to cost £308m




By Mark Huband, Security Correspondent

Financial Times, 16 July 2003

The cost of moving computer systems to the government’s secret eavesdropping centre has ballooned to £308m, more than seven times the original estimate, according to a critical report by the public spending watchdog.

The price tag for relocating the largest computer system in Europe to GCHQ’s new £1.2bn centre in Cheltenham – from elsewhere in the town – was first put at £40m but quickly rose to £450m, says a report by the National Audit Office released today.

Only after pressure from the Treasury was the cost reduced to £308m by phasing the move over nine years.

The decision means that old GCHQ sites that were due to close will continue to operate until 2012, at a cost of £45m.

The total cost of the project, which is the largest private finance initiative undertaken by the government, is now put at £1.62bn, the NAO report states.

The report makes clear that the 30-year PFI deal is nearly 10 weeks ahead of schedule and that construction of the vast building – nicknamed the Doughnut because it is circular with an internal courtyard the size of the Royal Albert Hall – has been completed within budget.

But the computer relocation was not part of the PFI deal. It was retained by GCHQ itself because of security concerns at the possibility of private contractors installing the system.

The vast new system allows GCHQ to track and analyse electronic communications around the world.

Sir John Bourn, NAO head, said yesterday that “GCHQ failed to consider all the implications of the fact that it was relocating its entire business capability to a new building.”

The £40m cost of relocating the computers was first calculated in 1997, when the PFI deal was approved. Staff only realised the scale of their underestimate when they launched a programme to proof the systems against possible fall-out from the Y2K scare.

“We acknowledge that the 1997 estimates of the cost and complexity of technical transition were immature and partial, and thus inadequate,” a GCHQ spokesman said yesterday.

“We underestimated the complexity of a technical infrastructure which had grown organically over 50 years, and the need to set up contingency facilities.”

GCHQ’s 4,000 computer staff, linguists and intelligence analysts will start to move to the new building in September, according to GCHQ officials.


© Copyright The Financial Times Ltd 2008.