GCHQ director Dr David Pepper told MPs on Monday that the cost of upgrading the agency's computer system had soared because those responsible didn't grasp the complexity of what was needed. The HQ move was originally predicted to cost £41m, but actually cost £308m due to the cost of developing the new system.
According to Pepper, the key problem was that the engineers designing the system simply didn't realise how important it would be to support networking between the various computers within the system.
"The engineers simply didn't spot the fact that the degree of networking was going to complicate enormously the process of transition," Pepper told the House of Commons Public Accounts Committee.
GCHQ's new base in Cheltenham cost a total of £1.2bn, and plans for the move were first drawn up in the mid-1990s when the concept of intranets was not widely understood.
Pepper explained that GCHQ realised the need for much more investment in networking in 1998, when drawing up plans to combat the Millennium Bug.
GCHQ has acknowledged that the situation should have been better understood when the plans were first drawn up, but insists that the computer system that was eventually built is much better than the one in place before the move.
"The large expenditure which was authorised on the technical transition has produced lasting value in terms of the new architecture, the ability to manage it and considerably more resilience," said Sir David Omand, Cabinet Office intelligence and security coordinator, according to the daily newspaper The Scotsman.
However, staff at GCHQ are said to be forced to share computers and hotdesk because of a lack of space.