1.It seems unlikely that the ambitious target date for delivering the Emergency Services Network will be met. Any further compression of the timetable will increase the risk to successful delivery of this critical programme. The National Audit Office estimated that the programme was between five and ten months behind target and representatives of the 105 police, fire and ambulance services in Great Britain (the emergency services) are less than 50% confident that the Emergency Services Network (ESN) will be delivered on time. The Home Office (the Department) confirmed to us that some slippage would occur. The time pressure is compounded by the need to provide emergency services with sufficient assurance that ESN is at least as good as Airwave. However, the time available for the region by region transition to the new system has been cut from 30 to 27 months, leaving many regions with little time for contingency and parallel running of ESN with Airwave, with the South West region, the worst placed, having no time for either. The Department told us it would not force emergency services to switch to ESN unless they were happy with it. We have observed previously that convincing local bodies to use new services can be a difficult process and believe it will be challenging to get all emergency services to collectively agree ESN is ready so that Airwave can be turned off as planned in 2019.
Recommendation: The Department should reassess the business case timescales, update milestones for delivery and work with emergency services to update transition plans so all parties agree they are deliverable. It must take responsibility for convincing services to switch to ESN but also be clear at what point it will mandate the switchover. We expect the Department to report to us on progress by September 2017.
2.Despite the prospect of delay the Department has not budgeted for an extended transition period or put in place detailed contingency arrangements to manage this risk. The current Airwave contracts expire in December 2019 and the only contingency if ESN is not functional by then is to extend them, which would cost an estimated £475 million for a year’s delay nationwide. The Department has negotiated a fixed price with Airwave’s new owner, Motorola, to extend Airwave if needed on a regional and monthly basis but detailed contingency plans to manage any such extensions have not been prepared. These are crucial as Motorola requires notification by December 2018 at the latest in order to make the preparations needed to run the Airwave service past December 2019. The Department, which has not yet agreed budgetary provisions for any delay, confirmed that the cost of delay would not be borne by individual regions as any additional payments would be made centrally from the grant to the police. The cost of any delay caused by a supplier should be recovered from the responsible party but, with the Department acting as prime contractor, identifying those responsible will not be straightforward.
Recommendation: The Department should budget for the cost of an extended timeframe and put in place arrangements for Airwave contract extensions as required. The Department should update us on these provisions by September 2017.
3.Good communications can make the difference between life and death for both emergency services personnel and the public but the technology ESN will rely on is not yet proven. The ESN system is intended to save money by avoiding the capital costs of building a dedicated network by running on EE’s existing commercial 4G mobile data network. But only one other country in the world, South Korea, has attempted to do this and its approach is less risky than that proposed here as dedicated mobile spectrum is available to the emergency services. In Great Britain, new technology to prioritise the emergency services over commercial users needs to be developed. In addition, devices with the required robustness, voice and dual-mode capabilities are being developed, while work is ongoing to expand coverage of the EE network in remote areas and the London Underground. The Department told us that it expected an announcement on the London Underground in the next couple of months but it is not clear whether this will include plans for other underground systems in the UK, such as Glasgow. Currently national coverage is at 74% but EE is confident that it would reach the 97% target (equivalent to the existing coverage provided by Airwave) by September 2017 and that technical options exist to close gaps in remote areas, such as the use of portable masts. The Department recognised that bringing together all the different elements to form an end-to-end system and scaling up these solutions and testing them adequately will be very challenging. The need for robust testing was a particular concern raised by a number of stakeholders across industry and the emergency services.
Recommendation: The Department should put in place adequate and independent testing of the technology required for ESN to make sure it works under pressure in a live environment. The Department must also address the real security concerns about communications on the London Underground and other underground systems and update the Committee on the outcome.
4.The Department did not manage to maintain competitive pressure in letting either of the two main ESN contracts. Initially there was strong market interest in both the main ESN contracts. For the user services contract, won by Motorola, the Department received 17 expressions of interest but not all these resulted in bids due to demanding technical requirements. The Department narrowed the competition down to five bidders with two invited to submit a best and final offer. For the network contract, won by EE, despite the fact there are only four mobile network operators in Great Britain the Department again only invited best and final offers from two suppliers. In both cases, one of the final two suppliers withdrew leaving the Department exposed to a potentially uncompetitive single-supplier situation. The Department told us that in one of these cases supplier withdrawal came so late that the winning bid, submitted by Motorola, was effectively prepared under competitive pressure, while for the other a “should-cost model” was developed to ensure the remaining bid from EE was competitively priced.
Recommendation: The Department should review its tender arrangements to ensure it does not rule out potential bidders too quickly, to avoid future single supplier situations.
5.We are concerned that the incumbent suppliers will be in a very strong position when the ESN contracts are recompeted. ESN was designed to:
But the current suppliers could acquire a significant competitive advantage. EE is being paid to roll out its network across Great Britain and into remote areas, with 250 new sites funded directly by the Department. The low numbers of public users in remote areas may mean that competing network operators have limited incentive to invest, placing them at a disadvantage to EE when the contract is re-let. According to the Department, to comply with state-aid rules, other network operators will be able to use masts in remote areas. However, other mobile network operators maintain that they have not been given details of the location and specification of proposed ESN sites and that no framework has been established for sharing masts. Without these it will be difficult for other operators to plan their own network expansion efforts. Separately, Motorola are responsible for setting the specification for ESN devices but are also a potential supplier of the devices, raising the risk that it sets specifications so as to favour its own products. The Department told us that it would be very careful to make sure device specifications are standardised and not bespoke to any single supplier.
Recommendation: The Department should, working with Ofcom, ensure other network operators have sufficient and timely information to enable them to make use of the ESN infrastructure and should report back to this committee in 2017 on take-up. For devices, the Department should engage with suppliers and ensure that specifications are standardised and do not favour any individual supplier.
19 January 2017