Cost claims stir ID cards debate

Alan Johnson claimed that the cost of ID cards would be recovered through fees

The House of Commons last week debated identity cards for the first time in two-and-a-half years after the Conservatives proposed a motion for the government to abandon the scheme.

As expected, the motion was defeated, but the debate proved instructive in outlining both the government’s and the opposition’s attitude to what has proved a controversial scheme in two key areas –­ what will it cost and what the alternatives are.

The Tories and Liberal Democrats have argued that in times of fiscal constraint, the £4.9bn scheme must be abandoned ­ – although they are ideologically opposed to the plan as well.

But scrapping ID cards will not simply save £4.9bn. According to the latest cost estimates confirmed to Computing by the Home Office this week, £3.6bn of spending on the scheme supports the issue of passports ­ – a measure that none of the political parties opposes. So ending the scheme will save £1.3bn at most.

But the issue is complicated further by home secretary Alan Johnson’s claims that this £1.3bn would be recovered by the charges levied for cards.

“Over 10 years, the operating costs of identity cards will be recovered through fees, so they are not a charge on general taxation over that period,” he told MPs during the debate.

“Any initial savings from scrapping identity cards would be offset by the loss in fees that they would generate, which would make a significant contribution to the costs of technology and other systems necessary for the introduction of biometric passports.”

Excluding the £379m budget for the compulsory ID card scheme for foreign nationals ­ – which the opposition supports ­ – at the current fee of £30 per card, the government would therefore have to persuade 36 million citizens to purchase the voluntary cards –­ more than half the population. Only then would the ID card part of the scheme cover its costs, and Johnson’s estimate be proved correct.

Such take-up was only ever going to be likely if the scheme were mandatory ­ – a policy that the government specifically ruled out earlier this month.

Some experts point out that the debate on ID cards is academic ­ polls suggest the Conservatives are favourites to win an election next year and they have promised to terminate the scheme.

However, it is not that simple.

Although the Tories would scrap identity cards and the national identity register ­ a central database of biographical and biometric details ­ the Commons debate revealed they are not opposed to biometric passports.

Furthermore, they are not opposed to collecting the information stored on the passports, according to shadow home secretary Chris Grayling.

“If we had to have biometric passports, the data would clearly have to be stored. [But] I see no need to create a much more substantial database containing 30 or 40 extra items of information that are not necessary in an application for a passport,” he said in Parliament.

This leaves the Conservatives open to accusations that they will introduce a national identity register by another name ­ with the only difference being the details stored on it.

Such a charge is particularly stinging because two contracts worth a total of £283m have already been awarded to suppliers Thales and IBM for the construction of the technology to support the national identity register and the work is under way.

As two other suppliers told Computing, terminating these deals early would have to be done on “convenience” grounds ­ meaning that a substantial termination fee would have to be paid by the government, which some estimate to be as much as a third of the total cost.

The Conservatives claim with some justification that this hands them a “poison pill”.

Nevertheless, for any Tory administration to scrap the contracts, pay off suppliers, and then introduce another costly passport database to perform the same function but with fewer data fields, would not sit well with the economic austerity that must inevitably accompany the first few years of the next government.

Contracts for the National Identity Scheme

• Thales UK was awarded an £18m, three-year contract to manufacture and deliver the first ID cards to students and volunteers, starting this autumn.

• IBM has been awarded a £265m deal to build the biometrics database to support ID cards and passports.

• CSC has been given a £385m deal to upgrade the application and enrolment system – applicable to passports and ID cards.

• A £400m contract to deliver the next generation of UK biometric passports went to smartcard specialist De La Rue.

• A contract for a case management system for the UK Border Agency – again applicable to both passports and ID cards – worth “substantially less” than £500m is still to be awarded.

• A mooted £500m contract for production of the cards themselves has not yet been awarded and is likely to be delayed until after the next General Election.