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Estimated costs up by 46%

21 February 2010

The Total Reward/Flexible Benefits Project is proving more expensive than originally estimated.

The original tender notice for the Total Reward/Flexible Benefits Project (The Project) stated:

"The contract will be awarded by the DfT for 3 years, with the option to extend at the Department's discretion for a further 2 years. It is anticipated that the major user, the Central Department for Transport, will spend approx 750,000 GBP over the three years of the contract, and a potential further 375,000 GBP for a two year extension if taken up. If other Govt. Departments use the contract this may increase the total value by a further 50%."

The Union has been told by DfT:

"The estimated overall cost of the Your Reward programme is currently estimated to be £1.1M, including external consultancy, project management and health screen costs."

Therefore the estimated cost has increased already from £750K to £1.1M; an increase of over 46%.

DfT go onto say:

"This is the total cost of the project over 3 years amounting to £367,531 per annum. The equivalent per capita cost is just over £19 per annum based on 19,237 employees.

Agencies will pay £408,450 towards licence costs (37% of the overall costs); Central Department is responsible for funding the YR build, development and project management costs.

The additional value generated by this investment for employees through Discounts & Cashback savings over 3 years is estimated to be £2M (based on a conservative 50% of employees making purchases with an average annual saving of £225 per capita).

The average health screen contribution in Year 1 for DfT-C employees will be in the region of £225 per capita; thereby generating a potential total reward value of £450 in 2010.

Additional employee/employer tax and NIC savings are excluded."

At a time of an increasing squeeze on public expenditure, we doubt whether spending over £1 million (in reality of course costs may go up again) on this project is the best use of tax payers money.
 

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