5.19 In common with all Public Sector Comparators, GCHQ's estimates are subject to very great uncertainty. Such uncertainty is inevitable in forming estimates of alternative means of delivering a major 30 year programme of building works and Information Technology development. In accordance with Treasury guidance, GCHQ examined the sensitivity of their conclusions to some changes of assumptions. This sensitivity analysis, outlined at Appendix 4, showed a wide range of figures from £734 million (£19 million below the PFI figure) to £955 million (some £200 million more than the PFI figure). Although the lower end of the range fell below the cost of the PFI deal, it is reasonable to consider other, non-quantifiable factors. For example, the Public Sector Comparator was based on continuing to work on two sites, which would not deliver the business benefits of the single site PFI accommodation.
5.20 In addition, we have examined the effect of changing the discount rate used from 6 per cent a year to 3.5 per cent, the figure now considered by the Treasury to be more appropriate for use in evaluations of this kind. On the assumption that the IAS price would not have been affected by a change in discount rate, our work showed a much smaller difference of £20 million in favour of the PFI deal compared to £71 million at 6 per cent. However, it may well not be reasonable to assume that IAs's price would not have been affected by the use of a lower discount rate.