Select Committee on Public Accounts Minutes of Evidence


Examination of Witnesses (Questions 180 - 199)

MONDAY 22 APRIL 2002

MR JOHN GIEVE, MR VAUGHAN ASQUE MR PHILLIP WEBB AND MR JEFF PARRIS

  180. I want to pick up the point about the extent to which this is over-engineered and gold-plated. I understand about having coverage and I understand the point about having encryption. What I am not certain about is the value which was added for the additional costs of some of the extra features. The gain that has been mentioned to us fairly consistently, and in paragraph 13 of the summary for example, is avoiding police officers having to go back to the station and all the rest of it. Surely they do not need the capacity to roam throughout the whole United Kingdom in order to be able to contact their headquarters. Very low-tech provision, indeed a secure land line almost could enable them to contact the station rather than having to travel back in again. May I just clarify a point on roaming? How many officers normally operate outwith their own force areas as a percentage?
  (Mr Gieve) I do not have that.

  181. Could you get that, please?
  (Mr Gieve) Yes. I might be able to. I shall look for it anyway.[9]

  182. How many times as a percentage of calls does one headquarters at the moment have to contact another headquarters on an urgent issue which has to go across a force boundary?
  (Mr Gieve) I do not have a figure as a percentage of all the calls made. I imagine that the bulk of all calls are local but it is a regular business that police headquarters will be dealing with.

  183. How regular?
  (Mr Gieve) I do not know. If you take for example the National Crime Squad, counter-terrorist operations, these are all nationwide operations and they all require this.

  184. I understand that. I just do not have a feel from this what the additional cost is of having a roaming ability as compared to the number of officers who would actually use it. You have indicated nothing that would give me any idea as to what that would be.
  (Mr Gieve) I shall come back as well as I can. Just to get the figures clear, the £1.47 billion is the cost over 20 years of supplying a radio system and any radio system would cost quite a lot.

  185. I only have a limited amount of time, so I do not want you to go back and tell me all the things I know already. One of the gains from the system was intended to be interoperability which we are now not going to have. Was interoperability between all the different emergency services really priced in at all in any way?
  (Mr Gieve) We are going to have interoperability across the Police Service.

  186. Across the emergency services.
  (Mr Gieve) As far as the Fire Service is concerned, which was originally in, they withdrew before we got to the costing.

  187. Was an estimate made of how much would be gained by the police in having interoperability with the Fire Service?
  (Mr Gieve) In terms of putting a price on it?

  188. Yes.
  (Mr Gieve) No; I do not think so.

  189. It just seemed like a good idea. If this was one of the main gains, I would have thought there was some sort of value attached to it, but no. We recognised early on that police authorities know their area, know the value of particular provisions. According to the summary in paragraph 13, "During the procurement, many police authorities considered that Airwave was prohibitively expensive". Presumably then they were regarding it as over-engineered for their needs.
  (Mr Gieve) For their local needs.

  190. What other needs are there?
  (Mr Gieve) They are part of a national Police Service, so it is quite possible that the sum of the local needs will not add up to a coherent and satisfactory total picture, which is why the Government have powers and are taking more powers to set a national policing plan, precisely to make sure that we do get a coherent picture.

  191. Did you identify a value as being above and beyond the local advantages, which presumably the local authorities or the local police boards were pricing and saying this was too expensive? You identified a value from having this roaming ability and interoperability and all the rest of it. Can you tell me how much that was?
  (Mr Gieve) The figure in the report is £300 million, although that was not hugely well supported. That was the cost difference between having Airwave and an estimated cost of having a set of local procurements.

  192. With respect, that was not what I asked you. What I was asking was what the value to you was. You paid out £500 million to police authorities to enable them to buy this scheme which they thought was too expensive. Presumably then it must have been worth more than £500 million to you to pay £500 million out. Therefore you must have had some calculation that led you to believe that it was worth more than £500 million because presumably otherwise you would not have done it. What was the figure?
  (Mr Gieve) Those are two separate questions. In terms of value for money for the country, the figure is £300 million or thereabouts, which is what it would cost to do this system rather than that system. The question for us on the £500 million was within our total budget, some of which might have been going to the police anyway, we found £500 million and channelled it through this means. That was worth doing as a means of getting them to apply a system which was worth having.

  193. So you do not have an answer to the points I was raising. You can understand why I am a bit anxious when almost everybody else who looked at this scheme did not think it was value for money. None of the local police forces thought it was value for money, the Fire Service did not think it was value for money and the jury is out to some extent on the Ambulance Service. On reflection, do you not think that perhaps it has been gold-plated?
  (Mr Gieve) I do not accept the first premise that no-one thought this was value for money except the Home Office. Is that your starting point?

  194. Not all that far away from that.
  (Mr Gieve) Before we announced the £500 million I gather 39 of the police forces in England and Wales out of 43 had indicated they would proceed with Airwave. The specification you are talking about and saying is gold-plated is one drawn up by the police authorities. We had a major consultation.

  195. If it was drawn up by the police authorities, why did many police authorities consider that Airwave was prohibitively expensive?
  (Mr Gieve) Partly because they probably thought they were in a negotiation with us for funds.

  196. So they were misleading us all really.
  (Mr Gieve) No, I do not think so. They thought that if they had to use their money they would prefer or might be forced to do with less functionality.

  197. Yes; absolutely. If they were using their money, they would have preferred to make do with less.
  (Mr Gieve) Yes.

  198. But if they were spending your money, they would take these extra features. There is an issue here in terms of the local police authorities believing that some of the add-ons were not value for money, basically.
  (Mr Gieve) There was also, no doubt wrapped up in that, the question of whether they thought it would work, because this is an unproven technology. They were taking a risk on this as well.

  199. Mr Parris, the 17% profit. Anxieties have been expressed here as to whether or not the add-ons will give you much more. Are you prepared to open your books to the Home Office to let them see how much profit you are making as the contract goes on?
  (Mr Parris) The 17% figure you quote and which is in the report has been acknowledged as an estimate of our return from this contract in isolation. What we made clear at the time and we still stand by, is that we would not have done this project in isolation for the police at that return. We have taken this project on, on the basis that it would give us an opportunity to be able to market it to the Fire Service, the Ambulance Service and such like.


9   Ev 24-25. Back


 
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