A Home Office plan to replace the existing emergency service communication system for the police, fire and ambulance service has so far cost the taxpayer £2 billion and delivered nothing.
MPs on the Commons Public Accounts Committee today issued a scathing report on the ministry’s handling of contracts for the new system known as the Emergency Services Network (ESN) which are now years behind schedule, with costs doubled.
They accuse the ministry of complacency and being “disconnected from reality” in the way it handled the huge contract.
Dame Meg Hillier MP, Chair of the Committee, said: “The ESN project is a classic case of optimism bias in Government. There has never been a realistic plan for ESN and no evidence that it will work as well as the current system.
“Assertions from the Home Office that it will simply ‘crack on’ with the project are disconnected from the reality, and emergency services cannot be left to pick up the tab for continued delays. With £2 billion already spent on ESN and little to show for it, the Home Office must not simply throw good money after bad.”
The present mobile radio system, which is run by the US company, Motorola, is called Airwave, and is expected to become obsolete because of new developments in technology.
Back in 2015 the Home Office gave Motorola and EE, a mobile network company, a £6 billion contract to develop the system. It was supposed to be up and running by 2019.
Instead the development has made little progress and the earliest it is expected to be working is 2029 while the cost has doubled to £12 billion and is expected to rise further when a new business review is carried out next year.
Motorola was investigated by the Competition and Markets Authority for a suspected monopoly by holding both the contract to run the present system and the contract to replace it. There are no rivals to provide such a service leaving Motorola in a monopoly position to make huge profits from the Home Office.
The CMA reported: “we find …that Airwave Solutions, and Motorola, can be expected to make total supernormal profits from the operation of the Airwave Network of around £1.27 billion between 1 January 2020 and 31 December 2029. This is equivalent to charging almost £200 million per year more than we would expect to see in a well-functioning market.”
The report led Motorola to decide to quit and it was paid £45 million by the Home Office because it was leaving the contract early and to provide some basic service for the following 12 months. The MPs suggest because Motorola had such a profitable contract for running the existing service it was in no hurry to develop a new system.
But the Home Office has yet to find another supplier to continue working on the project and has paused work on the entire scheme after already £2 billion had been spent on developing its successor.
The pause has had a serious effect on the police, ambulance and fire services who have spent millions of pounds already to prepare for the new system.
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The report said: “The ambulance service interacts with ESN through the Ambulance Radio Programme (ARP) on which it had spent £9.5 million. The fire service said it had spent £6 million preparing for transition, and £2 million on early versions of ESN which now had to be replaced. Police forces estimate that Airwave devices cost £125 million since 2018, and expect to spend another £25m by 2026. Forces spent another £5 million on transition teams.”
None of this money will be reimbursed by Whitehall leaving the three services having to find the money from their own already stretched budgets.
A Home Office spokesperson told Byline Times: “The Home Office and Motorola mutually agreed to terminate the contract to provide services for the Emergency Services Network last December. We have agreed that Motorola will provide some services for twelve months following this date.
“The Home Office is making good progress in procuring a new user services supplier.”