Executive summary
1 Effective mobile communications are crucial to modern police work. For many years, each police force was responsible for the procurement and maintenance of its own radio communications systems. Many of the systems are based on what is now obsolete technology that does not meet current operational requirements and prevents each police force communicating easily with the other emergency services in its area or with its neighbours. In 1993, following a major review of radio communications in the Police and Fire Services, the Home Office concluded that a new system was required and that it should be procured on a national basis. Furthermore, the new system should be shared by the Police and Fire Services, along with other public safety organisations, if their requirements were met and it was cost effective to do so. An outline business case was produced and bids were sought from the private sector. Subsequently, the Fire Service had reservations about the project and opted in 1996 to be included only as a potential future sharer.
2 In 1998, the part of the Home Office responsible for the project was transferred to the Police Information Technology Organisation (PITO), a Non-Departmental Public Body established to provide a procurement, contract management and advisory service for communications and information technology used by police forces. One of PITO's key objectives in its early years was to take the project forward.
3 In February 2000, PITO signed a framework arrangement with British Telecommunications plc (referred to as O2 in this reporta) for a new radio service (now called Airwave) across police forces in England, Wales and Scotland by 2004-5. PITO negotiated the contract under the PFI, whereby O2 will design, build, finance and operate the fixed assets used to transmit and receive voice and data signals. The total cost of Airwave during the 19 years in which the framework arrangement will be in place is expected to be some £1,470 million, made up of the first two of the three key services below:
a) £1,180 million for the Core Service: all police forces will receive, and PITO will pay for, a guaranteed level of radio coverage and other key services;
b) £290 million for "Menu Exclusive" Services: police forces will need to purchase services over and above those provided under the Core Service to maintain or enhance their existing capabilities. As a number of these services, such as extra radio coverage and capacity, are integral to the network to be built under the Core Service, O2 will offer them to police forces at standard national prices negotiated with PITO; and
c) O2 and other potential suppliers will be invited to tender for the provision of "Menu Competitive" Services, including items such as handheld terminals and control room equipment. Each police force will determine the quantity of equipment and the prices paid will depend on the outcome of locally organised competitions. Estimated expenditure will be £280 million.
4 In this report we examine the prospects for achieving value for money from the negotiation and early implementation of the Core Service, including the pricing of Menu Exclusive Services. The report does not cover operational decisions by each police force on the use of Menu Exclusive Services or the arrangements to conduct local competitions for Menu Competitive items. These decisions will be taken by each police force in consultation with its police authority and are outside the remit of the National Audit Office.
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a In
November 2001 British Telecommunications plc demerged its mobile communications businesses, including the Airwave contract, into a separate company, O2 plc.