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202 The LSE Identity Project <strong>Report</strong>: June 2005by individuals in a variety of ways. Some people could choose to payincrementally, through mechanisms such as saving stamps andcredits.” 468The cost of the larger system was then described as:“We have estimated total set-up costs and revenue over the first threeyears at around £36 million, £60 million and £90 million,respectively… The charge under debate will be met by each personwho receives a card for a service from which he or she willbenefit.” 469However, the system involves more than just paying for the card, the biometriccollection, and the set-up costs: issues such as system integration, data management andaudit need to be considered. When the Identity Cards Bill was introduced for secondreading in December 2004 the Government was less willing to discuss costs in detail.According to then Home Office Minister Des Browne,“The functionality of an identity system, as we debated in great detailin the context of the identity card for the electoral system in NorthernIreland, depends on a number of layers, and can be used in differentways. Of course there will need to be readers, and if we are to usecards for access to public services that will need readers too, but eachdecision will need to be made on a case-by-case basis for the purposesof those public services, according to a cost-benefit analysis of whatinvestment we need to put in to get the best benefit out—[Interruption.] That is the proper answer, and the hon. Gentlemanknows fine well that it is.” 470This statement underlines the uncertainty of the costs associated with the Bill. Thesecosts are likely to rise as the project develops, and one of the key reasons for this is theongoing work by the Home Office to consider the potential design. According to thedirector of security solutions at QinetiQ,“The Home Office wants matching online because it wants to keep aneye on the bad guys and keep an audit trail. But that means talkingover the internet to the central database. We are saying it is a step toofar.” 471In January 2004, BT warned the Home Affairs Committee that the database would haveto be designed with care. BT stated that the storage and interrogation of data in theNational Identity Register would be “heavily reliant” on the architecture, and this would468 Hansard, November 11, 2003: Column 173.469 Hansard, November 11, 2003 : Column 178.470 Hansard, December 20, 2004.471 ‘ID card plans are too complex and too expensive, government is told’, Bill Godwin, Computer Weekly, February15, 2005.
The LSE Identity Project <strong>Report</strong>: June 2005 203require “a high performance system”. 472 Northrop Grumman calls for the database tocontain “a limited choice of biometric” to ease the implementation. 473It is likely that the costs will rise further as more users are added to the system.Uncertainty will also probably increase because of the prevalence of biometrics. TheGovernment has already suggested the need for readers in every hospital and doctor'ssurgery. According to then Home Office minister Hazel Blears,“We also want to make sure that only the people who're entitled to useour public services like the National Health Service, making sure thatpeople who contribute to it can use it and those who don't, can't. So,where it is necessary, then we will have to have the technology inplace to read the cards.” 474According to a Home Office statement, the estimated total cost will be £3.1 billion. 475 Adetailed statement of this estimate was not provided to Parliament. It is hard tosubstantiate or justify this cost based on the published information. The Government hasnot, for example, stated which elements of the scheme this cost will cover, or theprocess used to derive those costs.When the Bill was reintroduced, the Government announced a new partial costsestimate. In the Regulatory Impact Assessment, the Government announced that:“The current best estimate is that the total average annual runningcosts for issuing passports and ID cards to UK nationals is estimatedat £584m. Some set-up costs will be incurred after the first IDcards/biometric passports are issued as it will be more cost effective tobuild parts of the infrastructure incrementally.” 476The new price rise was due to “allowances for contingency, optimism bias and nonrecoverableVAT.” 477The Government identified the running costs of the scheme as1. the issuing of passports and ID cards;2. the maintenance of passports and ID cards – e.g. to issue replacements for lostdocuments; and3. the verification service – e.g. through charges to accredited organisations.The Government’s best estimate for the costs was set at an “indicative unit cost” £93per card, for a card that is valid for 10 years.472 ‘Memorandum submitted by British Telecommunications plc’ to the Select Committee on Home Affairs, January2004, available at http://www.publications.parliament.uk/pa/cm200304/cmselect/cmhaff/130/130we04.htm.473 ‘Memorandum submitted by Northrop Grumman’, submitted to the Select Committee on Home Affairs, January2004, available at http://www.publications.parliament.uk/pa/cm200304/cmselect/cmhaff/130/130we40.htm.474 ‘U.K. to Put Biometric Readers in all Hospitals, Blears Says’, Bloomberg, September 29, 2004.475 ‘ID trials: What is involved?’ BBC Online, April 24, 2004.476 ‘Regulatory Impact Assessment’, released by the Home Office for the Identity Cards Bill, Introduced to the Houseof Commons on May 25, 2005, available athttp://www.homeoffice.gov.uk/docs4/Identity_cards_bill_regulatory_impact.pdf.477 Ibid.
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