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Last Updated: Wednesday, 16 July, 2003, 05:24 GMT 06:24 UK
GCHQ criticised for huge move overspend
The 'doughnut' - the new home of GCHQ in Cheltenham
The new HQ has been dubbed "the doughnut"
GCHQ has been criticised for massive cost overruns in the move to its new headquarters.

The National Audit Office (NAO) said the electronic spying agency vastly underestimated the cost of transferring its sophisticated computer equipment to its new base, dubbed "the doughnut" because of its ring-shaped design.

It added that if ministers had known the final cost - more than seven times the original estimate - they may never have approved the project.

Originally GCHQ had calculated the cost of the move from its existing home in more than 50 small buildings across two sites in Cheltenham to an all-in-one site in the town at 41m over two years.

This would have involved shutting down each computer system and restarting them in the new building.

The original estimate of 40m for the cost of moving their computer systems all in one go may be the most inaccurate I have ever seen
Edward Leigh
Commons Public Accounts Committee

But during work to prepare computers for the so-called "Millennium bug", analysts found the various systems were more linked in a more complex way than previously thought.

As a result, they concluded that a simple "box move" would leave GCHQ virtually unable to produce vital signals intelligence for two years.

Completing the transfer within the original time-frame without "unacceptable damage" to the flow of intelligence would cost 450m.

Revised plans for a move over five years were then drawn up, at a cost of 308m.

'Poor management'

But this meant keeping some of GCHQ's old buildings open until 2012, at a further cost of 43m.

Edward Leigh, chairman of the Commons Public Accounts Committee, described GCHQ's original estimate for the cost of the move as "staggeringly inaccurate".

"This report reveals that there was some very poor management along the way," he said.

"The original estimate of 40m for the cost of moving their computer systems all in one go may be the most inaccurate I have ever seen."

Personnel will begin moving into the new headquarters in September.

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