1.5 Since 1982, a number of studies undertaken by the Department of their fixed telecommunications had identified scope for financial savings and operating efficiencies by creating a single fixed telecommunications system. The Department's stated primary purpose of the project was to "realise actual cost savings, against the current costs of fixed telecommunications", without any reduction in operational effectiveness or quality of service to the end user. The Department have confirmed to us that they did not have an objective of improving the service to the end user. The Department estimated in internal reviews1 that they could achieve savings in their fixed telecommunications of £30 million a year2, some 20 per cent of their annual spend on fixed telecommunications.
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1 The Front Line First Study, published in July 1994, considered areas of the Department's operations in which savings could be made by reducing activities that were not part of their core military business. The 1994 review entitled Defence Costs Study 16 considered, amongst other things, savings in the Department's fixed telecommunications.
2 The Department told the National Audit Office that they could save an estimated £40 million a year, as reported in the National Audit Office report into Management of Telephones in the Ministry of Defence (HC 637 1993-94). This figure was later revised to £30 million following the results of Defence Costs Study 16.