31 By January 2005, planning and judicial delays, plus changes to the design to provide a larger appeal hearing centre, had increased the capital cost of the project from £77.6 million to £87.7 million. The main components of the £11.8 million increase were a £3.2 million provision for further indexation of costs at £350,000 a month, (although there was some uncertainty around this element, as the Home Office was in discussion with the contractor regarding a separate settlement for the legal delay); £3.3 million increased contingency for Home Office-originated design change, in view of the contractor's perception of the worsening risk profile associated with the project; and £3.1 million for increased consultancy spend (see Figure 10).
32 The overall effect of the £11.8 million forecast increase in costs was to increase the net cost of the Bicester accommodation centre over the ten year operating life of the contract from £39.8 million to £51 million. The Home Office forecast no increase in the anticipated benefits from the centre. Analysis by the project's cost consultants indicated that termination of the contract could cost the Home Office an additional £6 million.
9 | Comparative prison operational costs per bed space | |||
Facility | Adjusted number of bed spaces | Annual operating cost | Cost per bed space | |
Open prison average |
|
| 22,290 | |
HMP Ford | 411 | 7.797 | 18,972 | |
HMP Kirkham | 479 | 13.373 | 27,920 | |
Bicester |
|
| 22,806 | |
Source: Home Office data | ||||
10 | Analysis of the forecast £11.8 million increase in costs as at January 2005 | |
| Amount | |
Further indexation at £350,000 a month, representing a nine month delay, including a contingency for construction issues | 3.2 | |
Increased contingency for potential Home Office changes, including £1.5 million to expand the on-site appeal courts from two to three permanent hearing rooms and a multi-purpose room | 3.3 | |
Increased contingency to take account of the Commission for Architecture and the Built Environment's comments on the detailed designs | 0.5 | |
Increased spend on the directly-engaged consultant team, including construction project managers, legal team and technical experts | 3.1 | |
Value added tax | 1.7 | |
| 11.8 | |
Source: Home Office data |
| |
NOTE 1 The Value added tax of £1.7 million was not taken into account when calculating the increased capital cost of the project. | ||