Transparency data

30 October 2021: Emergency Services Mobile Communications Programme (ESMCP) accounting officer memorandum

Updated 1 May 2024

30 October 2021

Background

ESMCP was formed in 2011 with the objective of replacing Airwave. After a strategic review of the market, consensus settled on the idea of seeking a solution that ran over 4G technology on a commercial network.

The Emergency Service Network (ESN) vision is to deliver improved voice and data services to the emergency services at a significantly lower cost. In addition to replacing the core critical voice functionality, ESN will transform emergency services’ mobile working, especially in remote areas and at times of network congestion. It will create a vehicle for sharing data, enabling faster adoption of mobile applications that will provide our emergency services with the tools they need and help keep the public and emergency service workers safe.

ESN is jointly funded by the Home Office, Department of Health & Social Care, the Scottish and Welsh Governments, and by the emergency services that will ultimately use it. It is intended to save money by sharing an existing commercial 4G network, unlike Airwave, which is fully dedicated to its users. The technology being developed therefore needs to give the emergency services priority over other users of the network, in particular at times of urgent need such as major events or in crises.

The preferred future model for service delivery, along with a package of targeted improvements to requirements, was agreed by the Home Office’s Portfolio, Investment and Change Committee (PIC) in 2015. However, due to delays on the programme a reset was undertaken in 2019. This resulted in a refreshed Full Business Case (FBC) being approved by the Home Office Finance and Investment Committee (FIC) on the 17th June 2021 and the Government’s Major Project Review Group (MPRG) on the 23rd July 2021.

Procurement has proceeded in line with that agreement.

A commercial market test was organised and, under guidance from Crown Commercial Services (CCS), the scope of the programme was disaggregated into three lots (Delivery Partner, EE and Motorola). The Full Business Case (FBC) from 2015 reflected the procurement of ESN services which resulted in individual contracts between the single contracting Authority and suppliers of each of the main procurement Lots. In accordance with Government policies of the time, each lot had a relatively short contract duration. The programme was aiming to replace the entire Airwave system by the end of the life of the Airwave PFI, at the end of 2019.

ESMCP was originally forecast for deployment in September 2017. This date was amended by change notice CR110 to June 2018, and subsequently again by CR500 which moved the roll out completion date to December 2022 with contract extension for EE and Motorola to December 2024.

In the light of delays and cost pressures, in 2018 a review of the programme was carried out on behalf of the Permanent Under Secretary (PUS) to the Home Office. This review considered a range of options including cancellation. The review concluded ESMCP was the right strategic solution and a reset was announced. It recommended the programme should continue with a revised delivery approach, focusing on incremental delivery as well as a switch to fully standards-based software.

The re-baseline of the programme (CR500) signed in May 2019 was required to move to an incremental delivery approach with a standards-based product from Motorola, Kodiak. At the time we agreed a credible extension based on what we knew about the plan (which had not yet been baselined). We chose to go for as short an extension as possible, on the basis that subsequent extensions could be made if necessary. It was also important to demonstrate, in the face of possible criticism or legal challenge, that we were only asking for the minimum extension necessary.

Since CR500, full transition to the Motorola product was first forecast for completion by November 2024. The complexity of the build, integration and user transition process has however now become much clearer. Extensions to the Airwave, EE and Motorola contacts will be required as we have developed more detailed and comprehensive plans for user deployment and Airwave shutdown. These negotiations have started in line with Cabinet Office procurement processes and will be approved by Cabinet Office and HM Treasury Officials.

Regularity

The project does not require new or amended legislation to progress. I therefore consider it to conform to the Regularity Accounting Officer standard.

Propriety

Compliance continues to be monitored by the Home Office and the National Audit Office. Corporate and individual conduct are both subject to guidance and compliance reviews.

ESMCP has continued to operate within its Spending Round 2020 (SR20) spending limits and in line with principles and controls set out in Managing Public Money and the HMT Green Book. While the overall business case is compelling, the assumptions for core costs in 2022-25 are over and above the current SR20 baseline, even though work has been undertaken to reduce the difference by way of a smoother profile. The programme team is working through the SR21 bid in conjunction with HM Treasury and the Home Office to prioritise work without putting this programme’s critical path in jeopardy. Confirmation of the SR outcome for ESMCP will take place on 27 October, and early negotiations between Home Office and HM Treasury officials suggest that funding will be adequate.

I consider ESMCP to align with the principles documented in Managing Public Money and to conform to the Propriety Accounting Officer standard.

Value for money

ESMCP is anticipated to have a Whole Life Cost of £11.3bn over the period of the FBC (FY2015/6 - FY36/7). This includes sunk costs of £3.4bn, further Programme Delivery costs of £1.0bn, Ongoing Costs of £4.1bn (net of income) and legacy costs (inc. Airwave) of £2.7bn.

Compared to the baseline “Do Minimum” option, the preferred option, ESN, is better value for money with a significant positive Net Present Social Value (NPSV) of £0.8bn. This remains the case following robust sensitivity analysis showing a 90% likelihood that the NPSV will be c£0.3bn. The non-monetised benefits further enhance the value for money assessment.

Given the maturity of the Programme and a clear understanding of the risks in its delivery, a Quantified Schedule and Cost Risk Analysis has been undertaken, in place of a generic Optimism Bias, to assess an appropriate level of contingency. Contingency has been set to provide a P50 threshold of confidence in the cost envelope for the programme, i.e. it is just as likely to be delayed as it is to be delivered early. This is based upon specific risks identified by the Programme, their likelihood of crystallisation and the range of potential impact, both in terms of delay to completion of the Programme and additional costs. Where mitigations are planned these have been accounted for in the analysis.

Whilst costs compared to 2015 Approved FBC, have risen by £6.2bn (P50), in large part due to maintaining the existing Airwave services beyond the period previously envisaged and extending the appraisal period, it would be extremely expensive to retain Airwave longer than the minimum period necessary to complete transition. Assuming Airwave retirement in February 2024 (P50), the net cash saving compared with maintaining Airwave is £0.7bn.

Taking account of the points above, overall, I consider the project to conform to the Value for Money Accounting Officer standard.

Feasibility

There is a robust assurance framework in place for ESMCP. There is ongoing, regular assurance conducted by the ESMCP Independent Assurance Panel and the Infrastructure and Projects Authority (IPA), which recently completed a Project Assessment Review. ESMCP is also regularly assured by Cabinet Office, HM Treasury, and National Audit Office as well as subject to internal review within the Home Office. These processes provide independent assurance, and where necessary, approval, of ESMCP as a major government programme. They also hold the programme to account to ensure that it is acting within defined parameters of performance, spend and legislation. They provide the programme with information and advice to improve governance and programme management, to help reduce potential causes of project failure and to identify opportunities to deliver improved outcomes. Significant review and assurance includes Project Assessment Review (IPA, Cabinet Office), Commercial Approval Board (Home Office), Finance and Investment Committee (Home Office), Major Projects Review Group (Cabinet Office), and Independent Assurance Panel (chaired by my independent advisor on ESMCP).

The programme also works alongside the emergency services, and specifically Senior Users, who provide the operational context and expertise to the programme, acting as the voice of the end user. Their role within the context of the programme is to provide assurance of operational viability of the technical solution to their Funding Sponsor Bodies (FSBs) as well as to lead deployment and transition activities for their organisations. National Police Chiefs’ Council (NPCC) operates on behalf of the Police, the National Fire Chiefs’ Council (NFCC) on behalf of Fire, and Association of Ambulance Chief Executives (AACE) on behalf of ambulance services. They will make the organisational recommendations on the adoption of ESN in their respective organisations. They have a legal responsibility for ensuring that ESN solutions are robust and fit for purpose. We are working with them to ensure that Airwave is safely decommissioned.

Finally, a recent project assurance review which examined key programme artefacts and interviewed programme, supplier and senior user representatives, was undertaken in October 2020 and concluded positively.

Based on the above, I consider that the programme conforms to the Feasibility Accounting Officer standard.

Conclusion

As the Accounting Officer for the ESMCP, I have prepared this summary to set out the key points that informed my decision in September 2021.

I have considered this assessment against the four accounting officer standards of regularity, propriety, value for money and feasibility.

I am satisfied the programme:

• relies on clear legal powers
• meets the standards of Managing Public Money and accords with the generally understood principles of public life
• represents good value for money for the Exchequer as a whole
• is feasible to deliver

I am therefore satisfied that the programme is a good use of public resources.

If any of these factors change materially during the lifetime of this project, I undertake to prepare a revised summary, setting out my assessment of them. This summary will be published on the government’s website (GOV.UK). Copies will be deposited in the Library of the House of Commons and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.

Matthew Rycroft

Home Office Permanent Secretary and Accounting Officer for ESMCP