Operating Costs

4 When comparing Bicester's forecast running costs with the cost of running a prison, the Home Office started with the base annual operational cost for Bicester of £25.633 million and then deducted staffing, transport, insurance and other costs that would not be incurred by a publicly run prison (Figure 15).

5 Overall, Bicester's annual operating cost per place (£22,806) was higher than the open prison average annual running costs and those for Ford prison but lower than costs for Kirkham prison (Figure 16).

12	Calculating the cost of constructing Bicester asylum accommodation centre
		(£ million)
Capital cost adjusted for optimism bias		90.624
Less Land acquisition cost		3.250
Subtotal		87.374
Less VAT		13.013
Subtotal		74.361
Less Contractor costs		3.759
Construction costs		70.602
Source: Home Office data

13	Calculating the adjusted capital cost for Bicester
		(£ million)
Construction costs		70.602
Less 10% First Mover Disadvantage allowance1		7.060
Subtotal		63.540
Less cost of Hearing Centre		3.500
Less Main Building cost reduction		7.000
Total		53.040
Source: Home Office data
NOTE 1 The Home Office believed Bicester was incurring a higher cost by being the first centre, and the allowance was to reflect this and adjusts costs as if Bicester were one of a number of centres.

14	Calculating the prisons' capital cost per bed space
Prison		Number of places	Adjusted budget (£ million1)	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
Source: Home Office data
NOTE 1 The cost of functions (mainly case-working and immigration related) which are not undertaken by a prison. 2 The cost of the local minibus service and insurance which are not required for publicly run prisons. 3 Such as interpreters' fees.

15	Bicester accommodation centre amended operational costs
		(£ million)
Base annual operational cost		25.633
Less Staff costs1		3.320
Less Transport costs2		3.000
Less Insurance cost2		1.627
Less Sundry costs3		0.581
Total		17.105
Source: Home Office data
NOTES 1 The cost of functions (mainly case-working and immigration related) which are not undertaken by a prison. 2 The cost of the local minibus service and insurance which are not required for publicly run prisons. 3 Such as interpreters' fees.

16	Comparative prison operational costs per bed space
Prison		Adjusted number of bed spaces1	Annual operating cost2 (£ million)	Cost per bed space (£)
Open prison average				22,290
HMP Ford		411	7.797	18,972
HMP Kirkham		479	13.373	27,920
Source: Home Office data
NOTES 1 The Home Office adjusted the number of bed spaces to reflect Prison Service advice that actual utilisation within open prisons tends to be 85 per cent of available bed spaces. 2 The Home Office operating costs, prepared in 2001-02 were indexed at 2.5 per cent per annum (10 per cent overall) for the four years to the anticipated opening of the Bicester centre.