Home Office hands EE additional £220m for ESN

The Home Office is to spend over £200m of taxpayers’ money on extending the life of EE’s contract, to develop and provide a 4G network service for the troubled Emergency Services Network (ESN) project, citing delays and cost overruns.

Announced on the same day Boris Johnson was confirmed as the winner of the Conservative leadership contest, the additional money means the Lot 3 contract owned by EE will now be worth £895.7m as opposed to the current value of £675.6m.

Additionally, the Lot 3 contract will now run until December 2024, as opposed to December 2022, with the transition of emergency services users onto the EE network now set to begin in September 2020.

The new terms also include a new payment structure, whereby EE will be paid for delivery of the network on the basis of material completion, but any infrastructure not completed by the milestone date will lead to payment abatements.

“The need for these changes is because the ESN project is delayed,” said the Home Office in a procurement notice posted online. “It is necessary to extend the Lot 3 contract, which would otherwise expire during (or at best very shortly after) the ESN roll-out period (from September 2020 to December 2022).”

The Home Office said that if this was not done, there would be either a high risk of a change of network provider during one of the most critical stages of the ESN’s deployment, or a high risk of a change of provider during immediate aftermath of its deployment.

It said there was no realistic prospect of a new provider being found, and that if it was to procure a new contract through a fresh competition, it would add another three years at least to the timeframe, because no other supplier would have any hope of being ready to move before 2024 at the earliest.

This, in turn, would mean the government would have to spend an additional £1.6bn at least on maintaining the Airwave terrestrial trunked radio (Tetra) network.

Last week, the Public Accounts Committee’s long-running probe into the ESN debacle concluded with a damning report that said the project still faced substantial risk, and warned that further delays and budget increases were practically inevitable. The network is already over budget and a recent National Audit Office report revealed that costs would increase to £9.3bn.

PAC chair Meg Hillier said: “Neither the emergency services, nor the PAC, are convinced that the Home Office has a credible plan to deliver a reliable and effective service anytime soon. In the meantime, services are having to find workarounds and buy new equipment to prop up the old Airwave system.

“The Home Office’s reset of the Emergency Services Network programme has failed to deliver any more certainty. The financial benefits originally predicted for this programme are rapidly evaporating, and it will not now realise cost savings – on the most optimistic forecasts – for at least a decade,” she said.