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Home Office 'confident' of ID card costs

KPMG report on programme estimates published

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The Home Office has published an extract of the independent report which assessed the costing estimates of the National ID card scheme as "robust and appropriate."

Charles Clarke used this report to underline the basis for the cost estimates of £30 for a stand alone ID card and £93 for a passport and ID card package that was announced on 13 October.

The report produced by international consultancy firm KPMG on the Outline Business Case concluded that "the cost assumptions within our scope were based on appropriate benchmarks and analysis from the public sector and suppliers."

Conducted between 12 September and 3 October 2005, it reviewed the method used by government to establish the cost in the OBC scheme and the key assumptions used to arrive at the £30 figure.

Four specific cost areas which total around 60 per cent of total expenditure, were examined: Card production costs and card life; Enrolment processing times and resourcing; National Identity Register (NIR) ICT costs; and Identity Card take-up.

KPMG makes a number of recommendations to ensure subsequent estimates for the scheme remain as accurate as possible. The report proposes "options for refining some cost assumptions and recommend market testing some cost assumptions as soon as possible, subject to commercial and procurement constraints."

It also recommends greater sensitivity analysis on operating costs to reflect the information and understanding of the programme needs as they become available. For example, the report believes the cost of hardware and software for the NIR is based on reasonable assumptions, but the number of enterprise scale servers required to host the system is not certain and it suggests the government should take "market soundings" with CRM providers or telecom or utilities companies.

The Home Office has published a second document outlining the department's current progress in addressing KPMG's recommendations.

Commenting on the publications of the report extracts, Home Office Minister Andy Burnham said: "We are confident in our cost estimates for the ID Cards Scheme and I am very pleased that confidence is shared by KPMG. There has been lots of discussion of the potential costs of identity cards, much of it based on misinformation and misunderstanding. This review provides independent confirmation that, while estimates will continue to be refined as new information becomes available, the methodology is fundamentally robust and reliable.

The total average annual running costs for issuing passports and ID cards to UK nationals is currently estimated at £584m.

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