1.11 In the light of the Treasury guidance the team proposed expanding the scope of its study to encompass all of GCHQ's accommodation needs. In July 1996, GCHQ's Director therefore suspended the Cheltenham Building Programme and the proposals for the new computer block. The GCHQ Management Board then instigated the New Accommodation Project study to consider the "Feasibility and Value for Money of a Private Finance Initiative approach to both the Oakley and Benhall accommodation".
1.12 In September 1996, the GCHQ Board approved a Business Case for the Accommodation Development Project, based on the options identified for the Benhall site, and agreed that the principles governing the inclusion of Information Technology services should be agreed with GCHQ's external stakeholders. GCHQ estimated that it would take between five and seven years to provide the new accommodation.
1.13 In November 1996, GCHQ's Accommodation Development and PFI Study Project Board met for the first time and approved the overall project purpose and scope. In December 1996 the Board approved a communications strategy and, with Cabinet Office agreement, GCHQ proposed to the Treasury a policy on the application of PFI to its Information Technology services. The key principles included the unacceptability of making GCHQ's intelligence services to Government vulnerable to commercial pressures as a result of placing responsibility for their delivery into the private sector. In March 1997 the Treasury accepted this policy.
1.14 In April 1997 the main GCHQ Board approved a PFI solution to the Business Case for the future delivery of the New Accommodation Project and related services over a 30-year period. In line with the Treasury's acceptance of its Information Technology policy, the business case recommended that the movement of its Information Technology intelligence services equipment into the new accommodation, known as technical transition, should be excluded from the scope of the PFI project and be undertaken in-house. This was mainly for the security reasons previously stated, but also because GCHQ believed that, given the unique nature of its business, the private sector would not accept technical transition risks.
1.15 In May 1997 the then Secretary of State approved the Strategy and PFI approach for GCHQ's new accommodation. As a result, the Accommodation Study Board recommended proceeding with a PFI Project to relocate and develop the whole of Cheltenham accommodation. GCHQ then commenced the PFI procurement process.