§ Mr. Lawsonasked the Chancellor of the Exchequer what is the annual cost of operating the Treasury's economic model; and what is his best estimate of the resale value of the model.
§ Mr. HealeyThe report of the Committee on Policy Optimisation (Cmnd. 7148) states that operation and research on the model involves the activities of about 20 persons, which, together with other costs, amounts to about £600,000 a year. The activities involved in these costs comprise forecasting, policy analysis and research. Of the total cost about £130,000 is for running the model on the computer. The model is run about 2,000 times a year.
The set of equations that comprise the model are available in the Treasury manual at a cost of £2.00. The model programme is available for operation at commercial bureaux at an average royalty to the Treasury of £50 a run which 515W includes provision of model programme and historic data base. The total cost of running the model once for a particular forecast or a policy simulation would be three or four times this, to include computer time, supplementary information and necessary skills.