TfL wastes millions on telecoms, says IIPAG watchdog

Watchdog IIPAG criticises Transport for London (TfL) for its inefficient and fragmented telecoms contracts

Transport for London (TfL) is wasting millions on its annual telecoms bill and missing easy opportunities to meet its cost-cutting targets, according to a report from the Independent Investment Programme Advisory Group (IIPAG).

IIPAG provides “independent assurance and expert advice” to the Mayor of London’s office around TfL’s maintenance, renewal, upgrades and other projects, taking into account issues of economy and efficiency.

Its 2013 report looked in-depth at TfL’s telecoms infrastructure, and slammed it for being fragmented and inefficient with “no effective co-ordination and no overall network management”. IIPAG said this meant costs were much higher than were necessary.

The watchdog recommended the creation of a single team to manage TfL’s system-wide telecoms assets and services, in an attempt to bring down its annual telecoms spend of over £150m.

In its 2014 report, which has just been released, IIPAG lamented the lack of progress in this aim and branded TfL's contracts “not fit for purpose”.

The report said TfL had failed to act on IIPAG’s recommendations of 12 months ago and duplicated infrastructure and services, having contracted too many telecoms suppliers, including BT, CityLink Telecommunications and Fujitsu.

IIPAG highlighted a number of key issues to address, notably:

  • A lack of accountability and strategic direction in managing telecoms assets;
  • A lack of network management and overview of performance;
  • Substantial failings around network flexibility and resilience;
  • Inconsistency and uncertainty around network security delivery;
  • An unknown extent of service and infrastructure duplication;
  • Missed opportunities to lever economies of scale and commercial synergies.

IIPAG made a number of recommendations to remedy the problem and repeated its advice of one year ago, saying: “TfL should radically simplify its arrangements by establishing a separate business unit to manage all telecommunications.

"This unit should form a single focal point responsible and accountable for telecommunications asset management, technical and commercial strategy (including commercial exploitation) and the procurement of all telecommunications across TfL.

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"IIPAG now believes that this difficult problem should be addressed in stages, the first being in rail and underground, where the scale of expenditure, the number of telecoms engineers and the criticality of telecoms assets and services are the greatest. IIPAG will work with the business to help achieve a more efficient outcome."

In a statement, TfL said: "We support IIPAG's assessment that there are opportunities to make savings and deliver value for money through the management of telecommunications. We are actively investigating how this can best be delivered while continuing to ensure our day to day operational needs are met."

A BT spokesperson commented: "BT’s contracts with TfL represent good value for money. It is our experience that the UK ICT market, none more so than telecommunications, is highly competitive. BT is committed to delivering value for money for our customers."

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