Question 123 (Mr Bacon): Public Sector Comparator

The Committee asked for a fuller presentation of the cost of the Public Sector Comparator as at June 2000, enlarging on the appropriate column of Figure 12 on page 25 of the NAO Report. I attach an expansion of that figure setting out the details of our PSC, based on that used in the NAO Report on the MOD Main Building. We have worked from the original spreadsheet provided to the NAO to do this. The Committee will appreciate that many of the headings used in the MOD related report are not applicable in our case.

The Committee will note that, although the overall total (and thus the PSC) remains the same, the further work has revealed that the original Figure 12 contained an error which overstated the risk adjustment by some £5 million. This occurred in the summarisation by the NAO of the GCHQ spreadsheet provided to them; the process of extracting the extra detail required exposed this error. I apologise that we did not notice this at the time.

GCHQ: NEW ACCOMMODATION PROGRAMME: PUBLIC SECTOR COMPARATOR

Public Sector Comparator-Net Present Value (£ millions)
	Base costs		Risk	Risk as % of base costs
New build	174		42	24
Refurbishment	57		14	24
Site works	7		0
Fees	28		7	24
Lifecycle costs	368		89	24
Non-technical transition	2		0
Land sales	(31)		0
Total:	605		151
(Building, refurbishment and services)
Technical transition	68		0
Total	673		151
Total PSC		824

Note: An allowance of 24% for the risk of cost overrun in major publicly funded construction projects was included in the figures for the new buildings and refurbishments. Fees and lifecycle costs were estimated as a percentage of these costs, and so the same allowance automatically applies to them. Other elements included no allowance for risk-variabilities in many of them were explored as part of the sensitivity analysis (see Appendix 4 to the NAO Report).

19 December 2003

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