7 Costs
94. The following table, taken from the NAO's memorandum,
shows how the delivery timetable and anticipated costs and benefits
of FiReControl have changed since the project's inception:
|
| Strategic outline business Case
| Outline Business Case
| Full Business Case version 1.0
| Full Business Case (Parts 1 and 2)
| Revised Full Business Case version 1.1
| Current forecast
|
| Published
| July 2004
| November 2004
| June 2007
| July 2008 | May 2009
| n/a |
| Cost to the Department
| £120 million
| £160 million
| £340 million
| £380 million | £380 million
| £423 million[2,4]
|
| Efficiency savings per annum for Fire and Rescue Authorities
| (£22 million)[3]
| 30%
(£25 million)
| 28%
(£23 million)
| 11%
(£8 million)
| 9%
(£6 million)
| 9%
(£6 million)
|
| Overall project savings/(Cost) in NPV[1]
| £86 million
| £42 million
| (£50 million)
| £(211 million) |
£(218 million) | £(240 million)
|
| IT operational
| n/a |
n/a | October 2009
| July 2009 | May 2010
| May 2011 |
| Cut over to Regional control centres
| 2007-2009
| 2008-09
| 2010-2011
| 2010-2012
| 2010 onwards | 2011 -2012
|
Source: NAO analysis of FiReControl business cases[121]
Note 1: Period under consideration for overall
project savings / (cost) is 2004-05 to 2020-2021.
Note 2: In addition the Department has a contingency
of £17 million.
Note 3: Efficiency saving not provided in percentage
terms.
Note 4: These figures exclude any potential royalty
income from future sales of FiReControl technology.
95. CLG's written evidence notes that the FiReControl
project "represents £420 million of investment in the
Fire and Rescue Service".[122]
It goes on to describe the changing financial costs of the project:
- The first indicative cost figure
given to Parliament for project implementation was £120 million,
which did not include costs of meeting local and regional implementation
work, nor costs for installing equipments in all fire stations.
At that stage, CLG thought that the IT system would be delivered
by commercial off-the-shelf solutions and the integration requirements
had not been fully defined.[123]
- In 2007, the first comprehensive assessment of
the total cost to deliver the project was announced. The project
cost was estimated at £340 million, based on a schedule for
the first RCC going live in October 2009. The business case forecast
national level savings of 28 per cent. compared with the costs
of running the current control rooms.[124]
- In 2008, CLG announced that the total implementation
cost would be £380 million. The increase in project costs
"followed engagement with stakeholders to further develop
understanding of the local and regional costs of implementation
including the revision of estimates on training and redundancy
costs in particular".[125]
- CLG commissioned an independent review of the
current local control room costs during 2007-08, which found that
their running costs were lower than previously estimated. "As
a result of that review the annual savings which were reported
at 28 per cent. in 2007 were reduced to 11 per cent. in the 2008
Business Case".[126]
- The final version of the Full Business Case,
published in May 2009, estimates the annual national savings once
the network goes live to be £6 million (9 per cent.).[127]
96. It is disappointing that the estimated efficiency
savings achieved through FiReControl have been revised downwards
significantly during the course of the project. It is particularly
unhelpful that one such reduction was caused by CLG's inaccurate
data about current running costs of existing local control rooms.
97. The NAO states that the Department currently
predicts that the FiReControl project will cost £423 million.
Whilst the Department originally expected the project to realise
efficiencies and save costs locally that would be in excess of
the costs of the project, the Department now expects the overall
project to cost £240 million[128]
more than the local savings forecast. Not every Fire and Rescue
Authority will make net annual cost savings locally as a result
of the project. The Department plans to make annual payments
of £8.2 million to these Fire and Rescue Authorities.[129]
121 Ev 128 Back
122
Ev 95 Back
123
Ev 97 Back
124
Ev 98 Back
125
Ibid. Back
126
Ibid. Back
127
Ibid. Back
128
Net present value. Back
129
Ev 128 Back
| 
