ID card scrapping costs unclear

07 September 2010

The government has said scrapping 'wretched' identity cards will save the public money, but the cost of compensation to companies involved in developing the ID card scheme is still unclear.

Speaking in the House of Commons, Meg Hillier, the minister responsible for ID cards under the previous government, said that immigration minister Damian Green "pulls many different numbers out of his hat" on the savings from scrapping ID cards.

She said: "One figure that has not come out of the minister's hat, however, is the amount of compensation that his department will need to pay to companies and businesses involved in developing the ID card scheme."

Green said that the government is still in negotiations with companies and promised to reveal the outcome once a conclusion had been reached.

But responding to a question from Matthew Hancock, Green said that the there will be net savings of around £86m over the next four years from scrapping the scheme, something he cited the shadow Home Secretary as labelling "diddly squat".

He added: "On top of that, £835 million would have come out of citizens' pockets directly, as that is what people would have been forced to pay for these wretched ID cards if the previous government's policy had been allowed to continue."

Green said that between 2006 and 2010 £251m was spent on projects to establish ID cards and £41m was spent developing policy, legislation and the business case for their introduction.

COMMENTS

So Meg Hillier bemoans the cost of paying compensation that is a result of the contracts that the previous administration drew-up to entice companies onto a scheme many thought was doomed to fail?
James Elsdon-Baker - Hebden Bridge

Alan Johnson, Meg Hillier and David Miliband all vociferously denounce the coalition government for cancelling the ID cards project. When are they going to realise that they failed?

They failed to set up a national network of registration centres. They failed to create a national identity register. They failed to issue ID cards. They failed to explain how the project could enhance national security or improve the efficiency of public services. They failed to show that the biometrics on which the project depends work. They failed to convince people and businesses that there was any benefit for them in the project.

They had the time and they wasted £292 million of our money, and they failed.

It will cost millions of pounds to cancel the few contracts they managed to sign. So be it. Mark it down to experience. Their performance is a useful, if expensive, case study in how not to invest.

But there is no reason to proceed with the project, we lose nothing by cancelling it, there are no benefits which it could deliver, and people are left with £835 million in their pocket. Who knows, we may be better at allocating our resources than Alan Johnson, Meg Hillier and David Miliband.
David Moss - London/UK/BCSL