Thursday, February 16, 2006

More Lies Over Identity Cards


As the government bulldozes us into identity cards, let us set aside the civil liberties issue: this scheme is also shaping up to be a major public expenditure scandal.

The government's own cost figures were reiterated by Charles Clarke in the Commons this week:

"Our estimate of the average annual operating costs of issuing passports and ID cards...is £584 million. Those costs will be met in the main by fees rather than by a call on public funds. I think the figure will end up being less than £584 million, although I think that is a firm and strong estimate."

In thinking this ludicrously precise number a "firm and strong estimate", Mr Clarke and his colleagues are virtually alone. By far the most rigorous external estimate was produced by the LSE, "a six month study guided by a steering group of 14 professors and involving extensive consultations with nearly 100 industry representatives, experts and researchers from the UK and around the world". It concluded that the true cost range is £10.6 to £19.3 billion, reflecting substantial uncertainties both in technology and operation.

Why the huge difference? One factor is that the government's estimate is just the annual operating cost, rather than the total cost. Expressing costs in that way is peculiar, and contrary to accepted practice in project decision-making. Moreover, while you could compound the annual figures to produce an overall capitalised cost, the Home Office's "operating costs" appear to exclude large chunks of initial set-up expense. They also exclude knock-on costs for other government departments, which again will be big.

Neither do we know what contingencies have been costed in. The government's record in delivering major IT projects is appalling: over half fail altogether, and "since 2001, four major projects in four Departments have gone seriously wrong; their collective budget was about £9 billion and they overran by £33.9 billion—nearly £34 billion" (HOC 13 February).

What's more, in the case of ID cards, many outside experts question the suitability of the technology itself. Respected cryptography and privacy specialist Professor Stefan Brands says many experts are "astonished" at the government's approach, while Jerry Fishenden, Microsoft's national technology officer for the UK, reckons the proposed national database would be a highly attractive target for hackers, leading to "massive identity fraud on a scale beyond anything we have seen before." No wonder the Institute of Electrical and Electronic Engineers magazine has branded the whole project a "loser".

We hardly need to be techies to understand that loser technology is expensive technology. We've seen that time and time again with crackpot government projects. They have to be fixed and modified as they go along, and while they generally never work as originally hoped, the cost sky-rockets.

So what's the government allowing here?

We have absolutely no idea. We have no idea about how the government has reached its figure because it refuses to tell us. Instead they mumble about "commercial confidentiality" and refer us to their Regulatory Impact Assessment. But all that says is that cost "is estimated at £584m...at 2005/06 prices and including allowances for contingency, optimism bias and non-recoverable VAT".

Incredibly, outrageously, that's all we get. Along with an unsettling open-ended statement that "some set-up costs will be incurred after the first ID cards/biometric passports are issued." Well, quite- but is that millions or billions? As mere taxpayers, we're not to be told.

Thus the LSE's estimates- spelled out in an impressively detailed 300 page report- are our only true guide. And they gain added credibility from the reaction of ministers: rather than engaging with the argument, they responded to the LSE's report by launching a series of gutter attacks on its authors: 'mad', 'technically incompetent', 'absurd', 'fabrication', and 'highly partisan', is just a sample of the bile.

Naturally, the academics were stunned at being the target of such bare-knuckle politics, and have issued another report to refute the charges. But we taxpayers can draw the proper conclusion.

We should be very angry about the ID cards project. Not only are the government's claims of likely benefits grossly overstated (see previous post), but there has been a systematic attempt to conceal from us the full extent of its prospective costs.

So let us take a moment to remember the figure: £584m pa to "be met in the main by fees rather than by a call on public funds."

This is the benchmark against which we will calibrate the government's deceit.

Cartoon: Steve Bell

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