Part 1 Why GCHQ pursued a PFI deal

This part of the Report examines why GCHQ decided to move from its two existing sites in Cheltenham to new accommodation on a single site. GCHQ had found that many of its existing older buildings were difficult to maintain and were not flexible enough to cater for the rapid changes in technology that needed to be introduced to continue to meet its customers' requirements. Funding constraints in the mid 1990s frustrated plans for incremental development of the existing buildings and sites. The advent of private sector participation in public procurement projects led to the decision in 1997 to relocate the whole of the Cheltenham operation under a Private Finance Initiative (PFI) deal.