Jamie Doward, social affairs editor
Sunday May 29, 2005
The Observer
http://observer.guardian.co.uk/politics/story/0,6903,1494944,00.html
The government’s plans to introduce identity cards were dealt a body blow last night after it emerged the true cost of the scheme could top £18 billion, more than triple the official estimate.
The figure has been calculated by experts at the London School of Economics, who have spent months producing one of the most authoritative analyses of the scheme.
Their findings, which will be published in the next two weeks, will be seized upon by critics of the current ID card bill working its way through parliament. It is likely to spark a backbench rebellion from Labour MPs and be taken up by the Tories and Liberal Democrats, who oppose the government’s plans.
Last week the Home Office issued a report which estimated that, over the next decade, the cost of running the scheme, in conjunction with a new biometric passport system, would be £5.8bn. Because the Treasury has insisted the scheme must be self-financing, this works out at an average cost of £93 to each card holder.
But, according to the LSE’s analysis, a draft section of which has been obtained by The Observer, the true cost of implementing and running the scheme, will be between £12bn and £18bn. This could make the average cost of a card as high as £300 to every adult, unless government departments are prepared to shoulder some of the financial burden.
The LSE believes the government has grossly underestimated the cost of the technology involved in making the system work. Last week the government estimated the biometric card readers needed to scan the cards would cost £250-£750. ‘A more likely figure … would be in the range of £3,000 to £4,000 per unit,’ the report suggests.
The report also raises doubts about whether the government is right to assume a 10-year life span for each card. ‘All technical and scientific literature indicates that biometric certainty diminishes over time, and it is therefore likely that a biometric – particularly fingerprints and facial features – will have to be re-scanned at least every five years. This cost must be taken into account.’
A further problem, which the government appears not to have factored in, is ‘refuseniks’ – people who will not co-operate. ‘There is evidence that this population could create a substantial additional cost burden. The administrative costs of handling this group will be substantial,’ the report states.
The LSE also questions the strain placed on the system by individuals notifying a change in their personal circumstances, as they will be required to do so by law.
‘This requirement may result in [between] 300 million and 1.2 billion contacts with the register over 10 years,’ the report says. ‘This additional cost must be taken into account. If human management is necessary to ensure changes are verified, this facet will add between £1bn and £4 bn to the 10-year rollout of the scheme.’
The scheme, which will see some 44 million people issued with a card containing personal details including their name, date of birth and address, is considered controversial because personal details on the central database can be accessed by public sector organisations, without the individual’s consent.
But immigration and asylum minister Tony McNulty defended the plan. ‘A secure compulsory national identity card scheme will help tackle illegal immigration, organised crime, ID fraud, terrorism and will benefit all UK citizens,’ he said.
Opposition parties have expressed concern about the costs of the scheme. Critics have also pointed out that previous government IT projects have run considerably over budget. New systems for the Child Support Agency and the Passport Office were plagued with problems.
But the government has pointed out that it has ‘road-tested’ the combined ID and biometric passport scheme, one of the UK’s most ambitious IT projects, on 10,000 volunteers.
Under the scheme a microchip will hold biometric details including an iris scan, fingerprints and facial image, making it difficult to forge. But the trials revealed significant error rates, raising concerns about its efficacy.
Ministers anticipate that the system will be introduced in a phased roll-out. By 2013 it is expected that it will become compulsory to have an ID card, although holders will not have to carry them at all times. A recent poll showed that half of people questioned believed ID cards were the best weapon in combating identity theft, which is estimated to cost Britain £1.3bn a year.
A spokesman for the Home Office said it was impossible to comment on the LSE’s findings because of the confidential nature of the commercial contracts involved
But the LSE report notes: ‘The ongoing dispute over costs is due in large part to the fact that the government is either not certain exactly what the ID infrastructure will entail, or is unwilling to disclose these details.’
