UK's Emergency Services Network unlikely to start operating until 2029
CMA initiates price cap amid spiraling costs, Motorola Solutions to appeal
The price cap Britain's competition regulator imposed on Motorola's Airwave Solutions, whose tech provides comms between emergency services across the nation, could save taxpayers more than £1 billion by the time the successor is ready.
According to the Competition Market Authority's (CMA) final report into the inner workings of the Airwave Network that serves police, fire and ambulance services across the UK, the price ceiling levied against the Airwave Network will save £200 million a year.
Airwave was commissioned in 2000 and was due to run until 2017 when the replacement Emergency Services Network (ESN), also being built by Motorola, was scheduled to go live. It was beset by delays and the switchover was moved to 2019 under a revised program.
The deadline to introduce ESN was shifted again, this time to 2026 but the CMA suggests in its report this is now looking to be "more likely 2029" as the emergency services continue to rely on one supplier for communications.
The investigation found Motorola benefited from the situation to maximize profits. The report says that the capital cost of building the Airwave Network was baked into the original contract signed off by the Home Office in 2000.
When the original agreement ended, Motorola should have already "recouped" those costs and, in the same way mobile phone deals get cheaper after the handset is paid off, the price of the service should have fallen. It didn't and taxpayers were paying almost £200 million more a year, the report says.
The cap was processed by the CMA under the Enterprise Act, and is deemed to be the price the Home Office would pay in a "well functioning, competitive market." The cap will be reviewed in 2026 but applies to the end of 2029.
In a statement, Martin Coleman, chair of the CMA's independent inquiry group, said: "Our emergency services have to use the Airwave Network to protect the public and themselves. When the original contract period for the Airwave Network came to an end, there was no alternative provider so Motorola held all the cards when it came to pricing. As a result, the emergency services are locked in with a monopoly provider with no option but to pay a much higher price than they would if the market was working well.
"We are generally reluctant to impose price controls, but the particular circumstances of this case mean that a price cap is the only effective way of ensuring the emergency services, and the taxpayers who fund them, aren't paying considerably over the odds. The cap will end the supernormal profits that Motorola has been making while allowing it to make a fair return."
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In response, Motorola Solutions said via a statement: "Motorola Solutions strongly disagrees with the CMA's final decision and believes it cannot be justified on competitive, economic or legal grounds. We will appeal the decision."
It claims the price controls alter a "long-term contract that was mutually agreed, duly executed and is still in effect."
The history of the whole sorry mess should perhaps be taught at business schools as an example of how not to procure technology or run a complicated project. Proposals were overhauled time and time again, and even reviews of work undertaken delayed.
A new strategic approach was taken by the Home Office in 2018, and in 2020 there was a further overhaul. Home Office boss Matthew Rycroft recounted some of the tale to the Public Accounts Committee, telling MPs: "We have had a reset and that reset is not just about technology, it's also about mindset, and the mindset reset is to put the users at the heart of this and, you know, that does take a little bit longer, but I think it is time well spent."
Motorola shares some blame too: the ESN's push-to-talk feature – giving the caller an immediate connection to a fellow emergency service co-worker – relied on software called Kodiak, bought by Motorola when it was developing the Airwave replacement. This, however, needed development, according to the Major Project Authority, and would "not meet user requirements until 2020 at the earliest."
As of last month, the Home Office had spent just under £2 billion ($2.4 billion) on ESN with nothing to show for that money, years after the program to build ESN kicked off in 2015. The Airwave switchover to ESN was due to start in April 2016 and complete by September 2017.
Given the current track record, 2029 might be an optimistic start date, so it is small wonder the CMA is patting itself on the back for helping to achieve some savings in this debacle. ®