7 Operating costs, revenue and
surplus
81. HM Passport Office remains on course to meet
its Comprehensive Spending Review targets by the end of the review
period in 2014-15, which includes being self-funded on core operations
and delivering a reduction of administrative costs by 33%. In
fact, in 2012-13 the Agency made an overall surplus of £56
million.[86] The Agency
is primarily funded through the fees it charges and, in line with
HM Treasury guidance, prices for passports are set to recover
the cost of processing and producing them. Since 2010-11, HMPO
have made £80m of efficiency savings through IT improvements,
reviewing processes, operating from fewer offices, improving contracts
with suppliers and reducing the use of consultants.[87]
This has reduced the average unit cost for UK passports, as set
out in Table 6.Table 6: Unit cost of processing
a passport application
| Financial year
| Average unit cost
|
| 2009-10
| £68.92
|
| 2010-11
| £70.91
|
| 2011-12
| £64.68
|
| 2012-13
| £59.40
|
| 2013-14
| £57.71
|
Source: Extracted from letter from Paul Pugh,
Chief Executive, HM Passport Office, 20 June 2014 (WPO0002) and
Her Majesty's Passport Office, Annual Report and Accounts 2013-2014,
HC 595, p7
82. Some of these efficiency savings have been passed
on to customers in the form of reduced application fees.[88]
The fee for a standard adult passport was reduced from £77.50
to £72.50 in September 2012, and for a child passport, from
£49 to £46.[89]
From April 2014, the passport fee for customers applying for a
UK passport from overseas was reduced by £45.00 for adults
to £83.00, and £28.50 for children to £53.00. The
fee for an overseas 48-page passport application was also reduced
by £63.50 to £91.00.[90]
83. HMPO is not an enterprise that
aims to make a profit on behalf of HM Treasury. It is a public
body that provides services to UK citizens. Many of these citizens
are already paying taxes. They are then asked to pay a fee to
acquire a passport, and pay a fee to get a better service than
the standard level. Whilst it is right that applicants are asked
to cover the cost of the passport, it is clear that the price
they are paying is too high, which is resulting in repeated, large
surpluses. The state should not be exploiting its citizens by
making a profit on what is a basic right. We recommend that HM
Passport Office set prices at a break-even point (allowing for
a reasonable margin of error), either by reducing prices, or by
devoting surplus revenue to measures designed to raise service
standards by investing in the product and training people who
deliver it.
Contractors
84. HMPO's Annual Report and Accounts 2013-14 sets
out the 'Key supply arrangements' for the agency. The key IT supplier,
Computer Sciences Corporation (CSC), completed the roll-out of
the new passport application management system, which has been
designed to be easier to use and to enable cases to be examined
more efficiently. De La Rue, who design and produce the passports,
produced 5.5m passports that year, and have produced 17.5m since
they started production in October 2010. In September 2013, a
new agreement was signed with Post Office Ltd to provide the Check
and Send service to customers for the next seven years. In addition,
in February 2014, the French company Teleperformance were awarded
the new contract as the contact centre provider.[91]
85. Due to the number of complaints received by the
Committee regarding call centres, we questioned Mr Pugh on the
contact centre contract. He informed us that the amount Teleperformance
were paid was determined by the volume of calls they received.
Additionally, as they did not have full access to HMPO's casework
system for individuals, they could access only basic information
which they could relay to the customer.[92]
86. We are concerned that callers
wishing to find out about their passport application will not
receive a decent service due to the information they require not
being accessible to Teleperformance. We are also concerned that
the contract between HMPO and Teleperformance has the potential
to be gamed to the detriment of UK taxpayers. If Teleperformance
are being paid by volume of calls it gives them a perverse incentive
to 'create' more calls. This could be easily achieved, by cutting
off a call, so another call has to be made, or by not fully dealing
with the callers query, so that a further call is required. We
recommend that the basis of payment is altered, so it is not by
the phone call but by completed customer query.
86 Her Majesty's Passport Office, Annual Report and
Accounts 2013-2014, HC 595, p10 Back
87
Her Majesty's Passport Office, Annual Report and Accounts 2013-2014,
HC 595, p7 Back
88
Her Majesty's Passport Office, Annual Report and Accounts 2013-2014,
HC 595, p7 Back
89
"Passport fees" https://www.gov.uk/passport-fees Back
90
Her Majesty's Passport Office, Annual Report and Accounts 2013-2014,
HC 595, p7 Back
91
Her Majesty's Passport Office, Annual Report and Accounts 2013-2014,
HC 595, p10 Back
92
Q 248-263 Back
|
