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ID scheme will cost £400m annually

It's OK: Jacqui can afford it

hands waving dollar bills in the air

The government could save around £400m each year if it cancelled identity cards and stuck with the current generation of passports, according to Home Office figures.

If start up costs of £300m are included, the National Identity Scheme looks set to cost government and citizens around £4.3bn more than the cost of current passports over a decade.

This is more than triple the £1.31bn specific cost of identity cards over a decade released by the Home Office earlier this week. This is because the £400m annually also includes the cost of adding fingerprints to passports – the current ones include only digitised photos – the costs to the rest of government of the National Identity Scheme and the charges made to individuals for having their biometrics taken.

The figures were released in an impact assessment signed by home secretary Jacqui Smith and placed in the House of Commons library on 6 May 2009. This also says that the scheme will eventually generate annual benefits of £900m to £1.6bn.

These benefits would total £9bn to £17bn over 30 years, measured on a discounted basis, compared with total discounted costs of £7bn. This will produce a net benefit of £2bn to £10bn, with the midpoint, £6bn, quoted by Jacqui Smith in a speech last week.

The Home Office says the benefits will come from time savings to individuals in dealing with government and business, more efficient processes for government and business, and reduced costs from identity related fraud.

"It is crazy to fritter away billions of pounds on an unnecessary and intrusive ID card scheme during the biggest crisis in public finances for a generation," said Liberal Democrat shadow home secretary Chris Huhne.

"Only the most profligate of governments would stick with this ridiculous plan when costs are spiralling out of control. It shows just how out of touch ministers are that they think charging people through the nose to invade their privacy is acceptable."

This article was originally published at Kable.

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