Supplementary memorandum submitted by
the Home Office
Question 53: Calculation of risk costs?
As part of the work developing the Public Sector
Comparator (PSC) a workshop was convened to assess the risks,
led by Masons Communications (technical consultants to PITO) who
were developing the PSC for the Police Information Technology
Organisation (PITO). Experienced engineers from the Home Office
and three forces supported by operational police officers attended
the workshop. Each of the 17 risk areas identified either previously
or during the workshop was placed into one of four risk categories.
The categories covered financial, technical including system design,
programme related and commercial risks. There was little factual
information available that could be used to assist the workshop
in quantifying risk in particular that relating to the deployment
of TETRA technology due to its newness. The workshop therefore
had to rely on its collective experience and judgement to estimate
the probability of the risk happening and the associated cost.
The costed risk estimates (product of risk probability and cost)
were then profiled over the system roll and operational phases
of the project. Risk consists of that arising as risk to capital
during the build of Airwave and that to on-going operation and
support of the Airwave service. The former was only applied to
costings during the initial five years' roll-out.
The total Net Present Cost (NPCa method
of assessing a series of future payment by discounting them back
to a single value in today's money terms) of the risk profiled
over the life of the project was estimated at £170 million,
approximately 10% of the total cost of the PSC. A risk value of
10% for a technically advanced and complex project is considered
Questions 68-73: What is the cost per radio under
Typical costs of radios, inclusive of generally required
accessories such as carrying cases and battery chargers etc.,
are approximately £800. Prices are dependent on quantities
and exact equipment requirements as in any other procurement and
the handsets can be obtained for less than £800.
Deployment of handsets is dependent on the operational
practices of different forces. In some forces they are shared
by officers, in others they are personal issue. This is an operational
decision for the force and not for Airwave.
Question 181: How many [Police] officers normally
operate outwith their own force areas?
No data is centrally held by the Home Office,
HM Inspector of Constabulary or the Public Order Branch of the
Met (which co-ordinates mutual aid) to say what numbers or proportion
of officers operate outside their force boundary. Examples of
officers operating outside their force boundary are given below.
The British Transport Police and Ministry of
Defence Police each provide policing for organisations which requires
them to interoperate with other forces nationally.
Members of the National Crime Squad will routinely
operate across force areas, as well as officers on specialist
units (Mounted Branch, Diving Unit, Air Support Unit, motorcycle
teams) who are "loaned" to other forces for special
events (football matches, Commonwealth Games). The East Midlands
Air Support Unit has an aircraft shared by Leicestershire, Northamptonshire
and Warwickshire. Diplomatic Protection officers accompany their
subjects wherever they go.
Non-specialist officers are likely to work outside
their forces on mutual aid in cases of major incident such as
the Miner's Strike, the Brighton Bomb or the Lockerbie air crash.
The latter occurred in Dumfries and Galloway, the smallest force
in Scotland, who were heavily reliant on mutual aid (not just
from adjacent forces but from many in England including the Met)
to assist in an incident they were unable to resource.
Major incidents are not necessarily contained
within a single force area. Most air crashes, for example, occur
on landing or take off and many airports are near force boundaries.
Heathrow airport is policed by the Met but adjoins Thames Valley
police area. Gatwick Airport is surrounded on three sides by the
Surrey police area. The last aircraft to crash there, in 1967,
was an Ariana Boeing 727 which came down on approach in Surrey
one mile away. In December 1994 an Air Algerie Boeing 737, on
approach to Coventry airport in Warwickshire, crashed in the West
Midlands police area. Both forces (and fire brigades and ambulance
services) were involved in the incident. The Kegworth air crash
occurred near Junction 24 on the M1 motorway near East Midlands
airport, where the boundaries of the Leicestershire, Derbyshire
and Nottinghamshire forces meet. All three were involved, as were
their respective fire and ambulance services. A typical Major
Incident exercise at Gatwick Airport might involve Sussex and
Surrey Police, Surrey, West Sussex, East Sussex and the Airport
Fire Brigades, Surrey and Sussex Ambulance, Gatwick Airport Limited
(GAL) staff and the Army.
Officers working in areas adjoining another
force will routinely cross into the other force area and liaise
with officers from that force. Motorway patrol officers may have
no choice but to do so because of the limited number of motorway
exits and routinely patrol on adjacent force areas. In case of
hot pursuit of a suspect vehicle or persons, the pursuing officers
will notify the force into whose area they are crossing. Should
the suspects be armed, this is imperative, because only with the
express authority of a Chief Officer of the host force may firearms
The old force radio systems have always been
locally based and work well so long as, in radio terms, the handset
can `see' the mast. Once contact is lost- during a pursuit, for
example, which takes an officer away from his local base to a
neighbouring division, that officer must change to another radio
channel. A pursuit of 15 miles in the same force area might require
four or five changes of channel and rely on the officer's knowledge
of which to use. The same officer using Airwave could remain on
the same talkgroup whether the pursuit remained in force or entered
another (or several others).
Airwave gives officers the ability to communicate
effectively within and outside their force boundaries. Derbyshire
Constabulary, for example, adjoins eight other forces. One of
these is Leicestershire, which itself adjoins eight forces. For
all of these forces to be able to communicate through digital
technology, a compatible national system is required. A single
system is cheaper than four or six incompatible systems pocketed
around the country where communications equipment has to be stockpiled
in the event of major incident or cross-border incident. There
will be other savings. Special facilities provided for police
communications, such as at the motorway control centre for the
M25 situated in Surrey, will be rendered unnecessary when Airwave
is installed in those forces.
Questions 216-221: What do you anticipate to be
the total cash you would pay out over the 19 years?
The Airwave contract payments are spread over
15 years for each force starting at the Ready for Service date.
There was a planned progressive roll out starting in 2001 and
the total life of the programme, including the roll-out and decommissioning
phases, will be 19 years. When the system is fully rolled out
the total annual charge at 1999-2000 prices will be around £180
million per year for core and menu service charges. This comprises
£146 million for the core service and an estimated £34
million for menu exclusive services. As forces have local discretion
for the amount of optional menu exclusive service they procure,
their contract value can only be an informed estimate. On this
basis, the total value of contract payments over 15 years at 1999-2000
prices is £2.7 billion. O2 may have a more optimistic estimate
of the revenue they will receive from menu services provided to
forces and have published a total contract value figure of £2.9
The start up including the provision of radios
from third party suppliers is at an additional estimated cost
of £280 million.
The net present cost (NPC) of the contract is
derived from the contract payments and applying the Treasury recommended
discount factor of 6 per cent. The NPC of the contract (excluding
radios) is £1.47 billion.
The contract includes a complex indexation formula
which takes account of RPI and the Electrical & Optical Equipment
Earning Index and protects the public sector against any unregulated
change in prices.
Question 251: Health and Safety
Two notes on Health and Safety submitted by
the Home Office and by Airwave mmO2 are provided at Annex A
and Annex B respectively.