26 To demonstrate the reasonableness of the Bicester cost estimates, the project team compared the estimated cost of a place at Bicester with those at three new prisons: Belmarsh 2, Ashford and Peterborough (see Appendix 3 and Figure 8 overleaf). After deducting the cost of the on-site Hearing Centre20, child education and asylum caseworking facilities at Bicester, the capital cost per place (£70,720) at Bicester was broadly in line with those for Ashford and Peterborough. The comparison with prison places is not an exact one but was the closest comparator in the sense of funding 24 hour facilities for a settled population of people, although some services such as security would not be analogous.
6 | Analysis of broad benefits identified in the March 2004 benefits realisation paper | |||
Benefit (a) | £ million (b) | Basis of calculation (c) | ||
| Home office | Other |
| |
Intake reduction |
| 10 | Reduction in costs for ten accommodation centres being part of a full end-to-end asylum reform calculated as 10 per cent of £1,003 million.1 | |
Substitution of casework budget | 2.9 |
| Forecast share of casework budget to be spent on dispersed applicants in 2003-04, (adjusted to remove cost of clearing backlogs) = £29 million. | |
Substitution of UK Immigration Service removals and enforcements budget | 2.4 |
| Estimated 10 per cent saving on enforcement and removals budget of £239 million, gives £23.9 million for the whole programme. | |
Substitution of budget for general overheads | 2.8 |
| Estimated 10 per cent saving on general overheads budget of £283 million,2 gives £28.3 million for the whole programme. | |
Total | 8.1 | 103 |
| |
Source: Home Office data | ||||
NOTES 1 £1,003 million was 50 per cent of the total Home Office Immigration and Nationality Directorate budget for 2003-04 (forecast as at February 2004) plus the Department of Constitutional Affairs' appeal costs. 2 £283 million comprises £17 million from the Home Office Change and Reform budget, £26 million from Human Resources budget and £240 million from Finance and Services budget. 3 The project team assumed that £10.1 million benefits would accrue to the National Asylum Support Service and not to central Home Office budgets and so did not take them into account when calculating the broad benefit but did take them into account when calculating the Discounted Net Cost of the project. | ||||
7 | Updated net present value for the Bicester centre as at May 2004 | ||
| Cash values (£'000) | Present values1 (£'000) | |
Capital costs | 74,091 |
| |
Revenue costs | 258,032 |
| |
Total costs | 332,123 |
| |
Less narrow benefits | (217,000) |
| |
Sub Total | 115,123 |
| |
Discounted by 3.5 per cent a year | (15,397) |
| |
Present value of costs less narrow benefits |
| 99,728 | |
Less discounted value of end contract land value2 |
| (29,954) | |
Present value of costs less narrow benefits and land value |
| 69,772 | |
Less discounted value of broad benefits |
| (30,004) | |
Present value of costs after narrow and broad benefits |
| 39,768 | |
Source: Extract from Home Office's Bicester: Discounted Cash Flow Table – Revised Benefits Realisation Exercise – Narrow and Broad Analysis | |||
NOTES 1 Costs are prepared as at March 2004 prices. 2 The estimated resale value of the land and buildings at the end of the ten year operating period. 3 Figures reflect the full contract period (three years to build plus ten year operating period). | |||
8 | New prison capital costs per place | |||
Facility | Number of places | Adjusted budget | Budgeted capital cost per bed space | |
Ashford | 450 | 30.025 | 66,723 | |
Peterborough | 860 | 55.761 | 64,839 | |
Belmarsh 2 | 600 | 60.765 | 101,277 | |
Bicester |
|
| 70,720 | |
Source: Home Office data | ||||
27 The project team also compared the estimated annual operating costs for a place at Bicester (£22,806) with the average cost of a place at an open prison and places at Ford and Kirkham Prisons (see Figure 9). Overall, a place at Bicester was more expensive than Ford Prison, broadly the same as the open prison average and less expensive than Kirkham Prison.
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20 Bicester was to have had its own on-site Hearing Centre where one or more Immigration judges would hear and decide unsuccessful applicants' appeals against asylum decisions made by the Home Office in matters of asylum, immigration and nationality.