NAO slams inflexible Welsh Office PFI deal

The cost of extending the Welsh Office computer contract to cover the Welsh Assembly was too high, Westminster's main financial...

The cost of extending the Welsh Office computer contract to cover the Welsh Assembly was too high, Westminster's main financial watchdog said this week.

The National Audit Office (NAO) has criticised the Private Finance Initiative deal with Siemens, which ran 40% over budget.

Head of the NAO, comptroller and auditor-general John Bourn, said this proved that it was vital to build flexibility into PFI deals to allow for changes which may occur long after the contract is agreed. Extending the Welsh Office deal to include the Cardiff-based Assembly sent costs rocketing by nearly 40% above projections, from £46m to £64m.

The NAO said the original Osiris PFI contract between the Welsh Office and Siemens Business Services, based on user numbers, worked well. But when assembly members were elected two years ago there was insufficient time to do anything more than extend the contract to include additional services.

The assembly had to spend £377,000 improving services although some functions were not cost effective, notably a helpdesk for members at weekends and evenings which cost £6,000 per call. Contract costs escalated because the original deal was set up on a per user basis and user numbers rose sharply. No allowance was made for levels of use.

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