Mo' Bullshit
This is the letter that Andy Burnham sent out to Labour MPs on 7th February, prior to the ID Card Bill vote that is taking place right now. In it he wilfully misleads members of the house in order that they vote in favour of the bill and reject the modest amendments made by the House Of Lords.
Here we go then...
Important context
Again the myth is perpetuated that the NIR is a modest extension to changes being forced on the passport office by the world at large, but passport requirements are for an encrypted digital photo to be stored on a chip on the card. The recording of finger prints and iris scans onto an open-ended database recording every interaction with the state an individual has is not a modest extension. The less ambitious NHS database has already cost £6 billion. Bye bye context.
Consumer Costs and Running Costs
£584 million a year on UK Passport Service - 70% on passports themselves.
Which leaves £173.1 million a year on the ID cards - i.e. £1.73 billion, which is undoubtedly where the £30 a card comes from. The fact is the reason the cost breaks down in the favour of the passport is because the passport is carrying loads of stuff we don't need, unless of course it is utilised in the ever so cheap NIR. Not very subtle misdirection, and even worse considering the fact that the set-up costs have yet to be included.
Set-Up Costs
Mr Burnham is basically saying, "if we tell people how much it will cost, it will empower companies bidding for the contract." But he's saying this to Members of Parliament! The infrastructure does not exist that will allow MPs to know how much the set-up is likely to cost! The "commercial sensitivity" argument is a nonsense inasmuch as it suggests MPs cannot be trusted with this information. AB states it will be less than the annual running costs of the scheme. So that's alright then. The other aspect of the argument is, that we seem intent on giving the contract to the lowest bidder; we'll ultimately get what we pay for.
AB also confusingly suggests it won't be expensive because contractors may choose to put up some of the money to begin with and claim it back later... How does that make it any cheaper? How does it not make it more expensive in the long run?
Integration Costs
"It is for each department to consider the business case for integrating their systems and processes with the BIR." yet AB is certain that "there will be a net benefit to that organisation, not a net cost." So have these business cases been drawn up already? Apparently so, but you can guarantee they've not been distributed. In fact there have been written questions to suggest this actually hasn't happened, and the business cases don't exist. Burnham himself has stated that the infrastructure of the scheme has yet to be agreed on, so how can there be business plans worth considering.
LSE report
AB feigns ingnorance as to why the LSE report hazarded a five-year lifespan for both cards and biometrics might be prudent. Aside from the fact that the five-year renewal only figured in their more pessimistic costings of the scheme, it's a subject well worth making the most of, not least of all because Mr Burnham himself suggests that the impact on costs that a shorter renewal period than ten years would have would be astronomical.
So we have Burnham suggesting that the five year period is unfounded, yet also telling us that Northrop Grumman, the company that is perhaps in the best position of all to comment in that they actively use and deal with biometrics and biometric databases, is one of the companies being "listened to" in creating the NIR; a company that suggests the ID cards will have on average a three-year life span!
So there we have it! Mr Burnham believes the five-year lifespan isn't based on anything concrete, yet not only is the card itself in doubt but the longevity of the biometrics themselves, and these are worries raised not by "partisan critics" but by the very people running current Governmental systems. By his own admission the five-year card renewal will lead to a dramatic increase in the cost of the scheme.
The report also makes the point that as we get older, our biometrics change yet more rapidly, but we already know that the HO have a no concessions policy on public NIR costs...
The report "assumed a much higher loss/theft rate than is the case for existing documents." It seems clear that ID card loss or theft would be much higher than for existing documents if the cards are to be in use for the "millions of ID checks carried out every day". Furthermore with the card in place, the number of checks carried out, and with it the opportunities for loss and theft, will definitely increase. This is something that KMPG, whose findings of the "robustness" of the Home Office's methodology (note "methodology", and not "findings"), even commented on, stating in the same report that the ten-year life span was not a belief to confidently cling to. KPMG also said the estimates for the levels of lost, stolen, damaged or faulty cards, based on passport figures, "appear low".
Conclusion
"Indeed it is people on the lowest incomes who are most likely not to have a passport and therefore more likely to miss out on the protection and convenience it provides"
People on the lowest incomes are less likely to have good credit ratings and therefore are not a target of identity theft.
"Latest estimates show that identity fraud is growing and costs the country £1.7 billion every year."
No it doesn't. The HO applies a much broader definition of identity fraud than not only the rest of the world, but the HO's earlier report. As has been widely publicised, little of the £1.7 billion would be recoverable from the ID card scheme. What is more, the criminal world is not static - the introduction of the ID card scheme will, in all likelihood change the way in which criminals get money, it won't stop them all together, something that "best value" calculations need to take into account.
Labour's understanding of food miles has little to do with apples in Tescos having come from half-way round the world, and more with Joe Public having the audacity to drive to out of town supermarkets to buy them. That is all there has to be said about Labour's perspective, and it carries through to the ID Card Bill. Ultimately, the financial victims of identity fraud are the credit card companies and compulsory public expenditure should not be used to further line their already pretty well lined pockets. As I've said elsewhere, if the Government brought in a law stipulating that credit card applications had to involve a face-to-face interview, and/or that the company retained a photo of the applicant, then a substantial amount identity theft would be ruled out immediately, the cost being met by the credit card companies who stand to take the biggest hit from ID theft in the first place. But Labour isn't interested in creating responsible lenders, so it'll be Joe Public that has to carry the can again.
I thought you might find it useful to have a detailed note about the costs of the Identity Cards scheme.
Important context
Two changes to the British passport to improve its security as an identity document are now imminent. First, by the end of this year, all new and reissued passports will include an electronic chip, leading to a full biometric passport by 2009. Second, from October, all first-time applicants will have to apply in person. These changes are planned irrespective of the Identity Cards Bill. They have all-party support.
The question which the Bill puts before the House is whether to build on this step forward in identity protection and create a National Identity Register that can be used: (a) to issue the new passport and identity cards; and (b) to improve the standard and security of the millions of ID checks carried out every day in Britain by a range of public and private sector organisations.
In considering this question, colleagues will want to weigh the benefits of this development against the additional costs of the NIR and identity card over and above the changes to the passport. The purpose of this note is to inform that consideration. It uses figures from the business case and Regulatory Impact Assessment (RIA) published alongside the Bill. These figures have been independently verified as sound by KPMG.
Consumer costs
The RIA puts the unit cost of enrolling an individual onto the National Identity Register and issuing a full biometric passport and ID card at £93. The passport will account for about 70% of this cost.
The price of a passport will rise over coming years irrespective of the decision on identity cards. It recently rose to £51 and will rise again in 06/07 when application by interview begins. While we have yet to confirm next year's price, the unit cost of producing the passport in 06/07 has been put at £57.93. It will rise further when the full biometric passport is introduced and fingerprints are added to the electronic chip.
Within this context, the Home Secretary has announced that it is affordable to make available a stand-alone ID card at a fee of around £30. The card will be able to be used as a travel document within the European Union.
Running costs
A new agency, based on the UK Passport Service, will manage the N!R and be responsible for issuing the new passports and ID cards. In the RIA, the annual running costs of this expanded operation are estimated at £584 million a year.
There are two important things about this figure: first, the bulk of it relates to issuing passports (around 70%); second, it is not additional to the current annual running costs of UKPS.
Reflecting the changes to the passport, UKPS running costs will increase significantly this year and next. From its baseline expenditure of £219 million in 2004/5, UKPS will spend £293 million in 05/06 and expects to spend £397 million in 06/07.
It is simply wrong to suggest, as opponents of the scheme do, that the £584 million can be spent on other priorities such as policing. As today with the funding of the passport service, the costs of running the combined passport and identity card service will be predominantly raised through fees.
Set-up costs
To date, the Home Office has spent £30 million on the Identity Cards Programme. This expenditure has been made from Home Office funds voted by Parliament.
Once the legislation is in place, there will be annual costs to the Home Office above the current level of expenditure over the years leading up to the issue of the first identity card and the scheme reaching full issuing capacity. The Home Office will bear the cost of running a major procurement exercise and of building the IT infrastructure, including the purchase and commissioning of biometric recording equipment.
In line with best practice in major procurement, our estimated set-up costs have not been published. By doing so, we would provide information to potential bidders and restrict our potential to gain value for money. People are asking us to keep costs down on the one hand, but then on the other making requests that would limit our ability to do so.
However, these annual set-up costs will be much less than the annual running costs of the scheme as a whole and will be met entirely from within existing departmental budgets. Indeed, it is quite possible that suppliers may propose bearing some of the initial set-up costs and recharging them on an annual basis over the lifetime of the contract.
Integration costs
We expect that the NIR will be a valuable resource for other government departments and public bodies and enable them to make considerable savings by ending the current duplication of identity checking processes across the public sector. However, it is for each department to consider the business case for integrating their systems and processes with the NIR. Any costs they incur will be offset by benefits such as increased efficiency, reduced fraud or better service to the public so in the economic analysis there will be a net benefit to that organisation not a net cost.
LSE report
It is our view that the LSE 'Identity Project' report on the Home Office identity card scheme set out deliberately to inflate its costs. The cost estimate of £19 billion was based on a series of assumptions that do not correspond with the scheme we are proposing.
For example, the LSE report fails to explain why reputable research indicating 10-year reliability for biometrics should be discounted in favour of an assumption of a 5-year lifespan. If people have to be re-interviewed every five years, it adds enormous cost.
The LSE also allocated an inflated £1 billion marketing budget and assumed a much higher loss/theft rate than is the case for existing documents. In that way, the research generated headlines of the kind that read '£300 for an ID card' which some may say was the object of the exercise.
Conclusion
There has been much inaccurate comment on the costs of the scheme. Some of it has been intended to undermine public confidence in the principle of an identity card scheme.
As I hope this note shows, the investment needed to bring the National Identity Register and identity cards into being - on top of the considerable funds already being made available to improve the security of the passport - is both realistic and affordable for the Home Office, the Government and the individual citizen.
But, more than that, we believe it will bring the country significant benefits for years to come. The benefits case for the scheme is based on detailed work with other departments. It shows that the benefits of the scheme will far outweigh its costs when fully operational.
At present, the only document in Britain which provides a high degree of identity assurance is the passport. But, false passport applications are still made and, at 45-48 million records, the system does not cover the whole of our population. Indeed, it is people on the lowest incomes who are most likely not to have a passport and therefore more likely to miss out on the protection and convenience it provides.
It is the very lack of a comprehensive identity management system that makes it possible for identity fraudsters to exploit gaps in the system. Latest estimates show that identity fraud is growing and costs the country £1.7 billion every year. An identity card backed by a biometric National Identity Register will put the individual in control of the use of their personal data and cut the potential for identity fraud.
I also enclose a table detailing the Lords' amendments that I hope you will find useful.
Yours sincerely
ANDY BURNHAM
Here we go then...
Important context
Again the myth is perpetuated that the NIR is a modest extension to changes being forced on the passport office by the world at large, but passport requirements are for an encrypted digital photo to be stored on a chip on the card. The recording of finger prints and iris scans onto an open-ended database recording every interaction with the state an individual has is not a modest extension. The less ambitious NHS database has already cost £6 billion. Bye bye context.
Consumer Costs and Running Costs
£584 million a year on UK Passport Service - 70% on passports themselves.
Which leaves £173.1 million a year on the ID cards - i.e. £1.73 billion, which is undoubtedly where the £30 a card comes from. The fact is the reason the cost breaks down in the favour of the passport is because the passport is carrying loads of stuff we don't need, unless of course it is utilised in the ever so cheap NIR. Not very subtle misdirection, and even worse considering the fact that the set-up costs have yet to be included.
Set-Up Costs
Mr Burnham is basically saying, "if we tell people how much it will cost, it will empower companies bidding for the contract." But he's saying this to Members of Parliament! The infrastructure does not exist that will allow MPs to know how much the set-up is likely to cost! The "commercial sensitivity" argument is a nonsense inasmuch as it suggests MPs cannot be trusted with this information. AB states it will be less than the annual running costs of the scheme. So that's alright then. The other aspect of the argument is, that we seem intent on giving the contract to the lowest bidder; we'll ultimately get what we pay for.
AB also confusingly suggests it won't be expensive because contractors may choose to put up some of the money to begin with and claim it back later... How does that make it any cheaper? How does it not make it more expensive in the long run?
Integration Costs
"It is for each department to consider the business case for integrating their systems and processes with the BIR." yet AB is certain that "there will be a net benefit to that organisation, not a net cost." So have these business cases been drawn up already? Apparently so, but you can guarantee they've not been distributed. In fact there have been written questions to suggest this actually hasn't happened, and the business cases don't exist. Burnham himself has stated that the infrastructure of the scheme has yet to be agreed on, so how can there be business plans worth considering.
LSE report
AB feigns ingnorance as to why the LSE report hazarded a five-year lifespan for both cards and biometrics might be prudent. Aside from the fact that the five-year renewal only figured in their more pessimistic costings of the scheme, it's a subject well worth making the most of, not least of all because Mr Burnham himself suggests that the impact on costs that a shorter renewal period than ten years would have would be astronomical.
Hansard 6th February 2006:
Mr. Drew: To ask the Secretary of State for the Home Department which international biometric databases are being used as exemplars for the development of the UK National Identity Card Register. [42804]
Andy Burnham: Since the final details of the design and implementation of the National Identity Register cannot be completed in advance of procurement stages for the Scheme, it is not possible to provide a direct comparison with another biometric database at present and as such there are no 'exemplars' for the Register. However, as well as looking at the outcomes of biometric research and testing and the advice of biometric experts, the development the National Identity Register will be informed by experience gained from the operation of other biometric databases including: IAFS—IND's biometric database, IDENT1—UK fingerprints database, Philippines Social Security Card System, Hong Kong Identity Card System, US Visit biometric border control system, US Department of Homeland Security border crossing database, US Department of State Mexican visa database, United Arab Emirates Iris Expellee Tracking and Border Control database.
LSE Report:
The RIA estimates an indicative unit cost for an ID card and passport at £93. This assumes a ten-year life for a card and a recorded biometric. However, 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. If the enrolled biometrics do not significantly match the re-enrolled biometrics, it may be necessary to conduct another full identity check. Northrop Grumman, the operator of the national fingerprint information system (Nafis) argued that cards would need to be replaced on average every three years.663 The question of how a card subject is accurately verified to receive a new card is unclear, but we feel that the process will necessarily be costly and time-consuming.
...
663 ‘Memorandum submitted by Northrop Grumman’, submitted to the Select Committee on Home Affairs, January
2004, available at http://www.publications.parliament.uk/pa/ cm200304/cmselect/cmhaff/130/130we40.htm.
So we have Burnham suggesting that the five year period is unfounded, yet also telling us that Northrop Grumman, the company that is perhaps in the best position of all to comment in that they actively use and deal with biometrics and biometric databases, is one of the companies being "listened to" in creating the NIR; a company that suggests the ID cards will have on average a three-year life span!
LSE Report wrote:
Furthermore, the UKPS is considering a reduction in the period of validity of a passport, from ten years to five years,556 which implies that for many individuals, passport fees will be payable every five years. The UKPS acknowledges that this will represent a major financial burden on customers, and that it could be operationally challenging, but
it would remedy potential problems caused by chip damage and allow for the updating of biometric information.557
556 UKPS Corporate and Business Plans 2004 –2009, page 18
557 UKPS Corporate and Business Plans 2004 –2009, page 23
So there we have it! Mr Burnham believes the five-year lifespan isn't based on anything concrete, yet not only is the card itself in doubt but the longevity of the biometrics themselves, and these are worries raised not by "partisan critics" but by the very people running current Governmental systems. By his own admission the five-year card renewal will lead to a dramatic increase in the cost of the scheme.
The report also makes the point that as we get older, our biometrics change yet more rapidly, but we already know that the HO have a no concessions policy on public NIR costs...
The report "assumed a much higher loss/theft rate than is the case for existing documents." It seems clear that ID card loss or theft would be much higher than for existing documents if the cards are to be in use for the "millions of ID checks carried out every day". Furthermore with the card in place, the number of checks carried out, and with it the opportunities for loss and theft, will definitely increase. This is something that KMPG, whose findings of the "robustness" of the Home Office's methodology (note "methodology", and not "findings"), even commented on, stating in the same report that the ten-year life span was not a belief to confidently cling to. KPMG also said the estimates for the levels of lost, stolen, damaged or faulty cards, based on passport figures, "appear low".
Conclusion
"Indeed it is people on the lowest incomes who are most likely not to have a passport and therefore more likely to miss out on the protection and convenience it provides"
People on the lowest incomes are less likely to have good credit ratings and therefore are not a target of identity theft.
"Latest estimates show that identity fraud is growing and costs the country £1.7 billion every year."
No it doesn't. The HO applies a much broader definition of identity fraud than not only the rest of the world, but the HO's earlier report. As has been widely publicised, little of the £1.7 billion would be recoverable from the ID card scheme. What is more, the criminal world is not static - the introduction of the ID card scheme will, in all likelihood change the way in which criminals get money, it won't stop them all together, something that "best value" calculations need to take into account.
Labour's understanding of food miles has little to do with apples in Tescos having come from half-way round the world, and more with Joe Public having the audacity to drive to out of town supermarkets to buy them. That is all there has to be said about Labour's perspective, and it carries through to the ID Card Bill. Ultimately, the financial victims of identity fraud are the credit card companies and compulsory public expenditure should not be used to further line their already pretty well lined pockets. As I've said elsewhere, if the Government brought in a law stipulating that credit card applications had to involve a face-to-face interview, and/or that the company retained a photo of the applicant, then a substantial amount identity theft would be ruled out immediately, the cost being met by the credit card companies who stand to take the biggest hit from ID theft in the first place. But Labour isn't interested in creating responsible lenders, so it'll be Joe Public that has to carry the can again.
posted by Hamilton's Brain | 7:16 pm
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