2 The cost of technical transition
8. Although technical transition was excluded from
the scope of the PFI deal, the building design had to be integrated
with the technical transition plans to ensure there would be no
break in GCHQ's service to its customers. In 1997 GCHQ's best
estimate for technical transition, based on a piece by piece move
of its systemsthe so called box movewas £41
million. However, this was reported to GCHQ's Board as only £20
this figure was so small and could easily be absorbed within existing
budgets, the GCHQ Board took its eye off technical transition
at that time and focused only on assessing the commercial viability
of a PFI deal for the building.
9. GCHQ was unable to explain why the wrong figure
of £20 million had been reported to the Board. However, we
were told that its Directors knew it should have been £41
million because they had been working on it. But with either figure
the project appeared to be all about building costs and, although
there was a Director of Technology on the Board, it was not for
a couple of years before the realistic, high costs of technical
transition were articulated.
10. In 1998 GCHQ had started to consider the impact
that reaching year 2000 would have on the integrity of its computer
systems. It diverted 150 man years effort to carry out this work.
It was only during this work that GCHQ first realised the complexity
of the inter-relationships between its networks and equipment.
In the light of this realisation GCHQ's new programme director
reviewed the position and in 1999 it was estimated that technical
transition would cost as much as £450 million over two years.
11. GCHQ acknowledged the failure of its engineers
to spot that a growing degree of networking of systems was going
to complicate the process of doing the technical transition. The
immediate predecessor plan to the new building had been for a
new computer hall and that had been planned on the same simple
box move. But that simple plan was carried into the new building
and it was some time before anybody stood back and said this would
not work because of the degree of networking.
12. The cost of actually moving the equipment was
broadly equivalent to the original costing of the box move. What
had not been forecast was the cost of providing new information
technology architecture, which was a very big undertaking. In
that sense part of technical transition was an upgrade of existing
systems. GCHQ considered that it was arguably easier and cheaper
to do it in the new computer hall than it would have been on the
old site. It was a very large sum of money but GCHQ considered
it represented good value.
The additional costs had provided GCHQ with a 21st
century system and proper management tools for the future development
of that system.
13. The Treasury would not fund the whole of the
£450 million over two years but are contributing an extra
£216 million to a revised budget of £308 million over
the first five years. In order to keep within the revised budget
GCHQ is having to keep part of one of its existing sites at Oakley
open until 2012 with extra running costs of £43 million.
The first five years of technical transition would also require
some 978 man years of GCHQ's own in-house staff effort at a cost
of between £30 million and £40 million.
Retaining Oakley did not accord with GCHQ's original intention
for all of GCHQ's Cheltenham staff to be on one site. The number
of people left behind at Oakley to run the IT would be down to
about 200 within a few years. The great majority, 90% of the 4,500
staff, would be working in the one new building which GCHQ considered
would provide the desired opportunities for better teamwork.
17 C&AG's Report, para 4.2 Back
Qq 83-86 Back
Qq 69-72 Back
Qq 22-23 Back
C&AG's Report, para 4.7 Back
Q 3 Back
Qq 63-65 Back
C&AG's Report, para 4.9 Back
Q 4 Back
Q 9 Back