The Government “prioritised image over cost” when it chose to spend £6.4m a year on a central London office for the National Cyber Security Centre (NCSC), a new report has claimed.

The Intelligence and Security Committee’s report into the decision to locate the cybersecurity division of GCHQ in Victoria concluded that then-Chancellor George Osborne chose the more expensive office complex over cheaper options in Canary Wharf and Shoreditch.

A leading contender for the NCSC office had been a building in Canary Wharf which would have cost £3.1m per year, within the initial office budget of £3.5m per year.

Over the 15-year period of the NCSC’s lease, the intelligence agency could have saved around £50m if it had chosen the cheaper option.

The report also claimed that the Victoria office cost £21,000 per NCSC employee per year, a figure which the committee claims is more than double the average cost for Government staff in London.

An early plan to base the NCSC among many of London’s technology businesses in Shoreditch was dropped in favour of having the NCSC close to existing Government departments in Whitehall.

Boris Johnson wrote on Thursday that “the Government acknowledges there are lessons that can be learned from the procurement process.”

The Government “prioritised image over cost” in its decision to drop cheaper office options, the report concludes.  

“The Chancellor did clearly consider an office which provided ‘a modern, hi-tech environment’ to be essential, and GCHQ clearly considered a Westminster location non-negotiable,” the report says.

Committee members Kevan Jones MP and Stewart Hosie MP wrote that “the cost significantly exceeded the funding allocation, meaning that GCHQ is paying for the shortfall out of its main budget – money which could otherwise have been spent on operational capabilities.”

In his written response to the report, Mr Johnson said that the Victoria office building “met all the key criteria required by Government, including proximity to Whitehall and other stakeholders within the Government Secure Zone.”