MPs slam spiralling IT costs of new GCHQ spy centre

MPs have slammed the government's PFI deal for the new GCHQ spy headquarters after it was revealed IT costs rose tenfold from £41m to £450m.

The transfer of GCHQ to its purpose-built 'doughnut' listening post building in Cheltenham took place last year under a £489m PFI contract.

GCHQ decided to do the IT and technical transfer itself for security reasons but a report out today by the Parliamentary Accounts Committee (PAC) reveals experts massively underestimated the cost.

The technical transition had originally been estimated in 1997 at £41m but it was only after extensive Y2K work that GCHQ fully understood the complexity of its systems and in 1999 a revised estimate put the bill at £450m.

The PAC report said: "GCHQ acknowledged the failure of its engineers to spot that a growing degree of networking of systems was going to complicate the process of doing the technical transition…. What had not been forecast was the cost of providing new information technology architecture, which was a very big undertaking."

The Treasury refused to fund such a large increase but has contributed £216m to a revised budget o £308m over the first five years, with the technical transition now taking place in stages to contain costs.

GCHQ will also keep part of its existing Oakley site open until 2012, incurring additional running costs of £43m.