2.42 Charges for BOXER and UNITER in 1999/2000 are projected to be £32 million (28 per cent) of the Department's total spending on the Defence Fixed Telecommunications System of £116 million. They are very labour intensive services, with between 76 and 79 per cent of the total charge represented by labour charges, compared with between 15 to 34 per cent for most telecommunications services under the contract.
2.43 Previously, these systems were operated and maintained by uniformed Royal Air Force personnel, but are now run by BT. Replacing uniformed military personnel with civilian specialists usually leads to a reduction in staff costs, other things being equal. This is because:
■ the uniformed staff responsible for operating and maintaining BOXER and UNITER would also have had other duties, such as combat training and general military duties. Their wage costs would include a premium for these duties, compared with a civilian who is employed specifically to operate and maintain the systems, although civilians may be subject to call out charges and overtime payments which would not be made to military staff; and
■ these other duties mean that additional suitably trained personnel are needed so they can maintain services while exercises are taking place. So, a greater number of military personnel would be needed to provide the BOXER and UNITER services than is the case with the civilian specialists in the BT contract.
2.44 For these reasons, we would expect to see savings in the BOXER and UNITER support services. Annual spend on the services is instead similar to the previous level when they were operated by Royal Air Force personnel. The Department consider that there have been wider savings than those taken into account in their estimates; for example, in supervisory posts and training establishments, but they have not quantified these savings. The Department also saw advantages in having a unified system, which encourages the use of BOXER and UNITER. BT are now responsible for supplying a specified level of service and the Department suggested that BT may have included a premium for that. They are also responsible for maintenance risks and for replacing obsolescent equipment. While this may explain the difference we consider the Department should have quantified this risk transfer to demonstrate whether the price paid would be value for money.