Identity Cards Bill

The Minister is keen for us to be assured that we will be able to trust entirely the figures that his Department will come up with if the amendment tabled by the right hon. Member for Holborn and St. Pancras (Frank Dobson) is accepted. However, we must see the situation in the context of a report by the Comptroller and Auditor General. He had to report to the Home Office and the public at large that the Home Office had fallen down on its 2004–05 resource accounts. Let me pick out one or two paragraphs of the report so that hon. Members can get an idea of the context of our debate. The report also addresses the concern expressed by the hon. Member for South Derbyshire (Mr. Todd) about the absence of proper accounting assumptions in several of the Minister’s assertions. Paragraph 10 of the report said that the Home Office accounts for last year "““contained numerous errors and internal inconsistencies. In particular, amounts relating to cash, Exchequer funding and non retainable income due to the Consolidated Fund were contradictory and did not reconcile between the different places in which they appeared in the accounts. There were also material omissions and misstatements””." Paragraph 14 said: "““Difficulties were encountered in the transfer and cleansing of data, and staff were not trained to use the new system on a timely basis. These problems and delays, together with a lack of understanding of the new accounting system, meant that the Home Office could not use data from its new accounting system effectively to produce a cogent set of accounts to the required faster closing and statutory timetables.””" Paragraph 15 cited: "““control weaknesses within key Information Technology applications including access to the system, inadequate segregation of duties, the creation of standing data and the ability to interrogate and monitor changes made.””" "It continued:" "““These weaknesses made access to the database by unauthorised staff possible, representing a risk to the integrity of Adelphi data and exposing the Home Office to a greater risk of fraud and error.””" Let us go back to paragraph 11, which refers to the second draft accounts, which, unlike the first draft accounts—which were delivered rather late—were delivered only two days late. It states: "““The amounts in the revised accounts had changed significantly from the first draft. In particular nearly every major balance was markedly different. To illustrate the scale of the movements: the amount owed to the Exchequer by the Home Office of £68 million in the September draft accounts became an amount owed by the Exchequer to the Home Office of £112 million in the December draft accounts. This swing is due to major changes elsewhere in the accounts resulting in a change to the cash required by the Home Office.””" The Comptroller and Auditor General went on to say that because the Home Office was incapable of implementing its new accounting system, it had been "““unable to reconcile its cash at bank position””." Paragraph 16 continues: "““Bank reconciliations are one of the most fundamental of all accounting controls as they enable payments, receipts and cash balances to be validated to an external source and provide assurance about debtor and creditor balances. They are also a key control for the prevention and detection of fraud.””" Other references in the Comptroller and Auditor General’s report were equally impolite. In paragraphs 21 and 22 he criticised "““Poor controls and weaknesses in the audit trails maintained over the assignment of access rights; Absence of checks made against Human Resources records to ensure that new users are authorised, and leavers are removed promptly; Absence of controls to detect unauthorised access to the database””" and "““Over reliance on the Home Office contractor to undertake security checks, and a lack of effective processes to address the risks this exposes the Department to””." If that is what the Comptroller and Auditor General says about the Home Office’s accounts, it is perhaps not in the least bit surprising that other Departments have not found it convenient to hand over to the Home Office their assessments of the costs, workings, assumptions and accounting practices of their work in preparing for the great day on which the ID cards system is introduced and the national identity register comes on stream. In autumn, just before Christmas, I took the trouble to table written parliamentary questions to all the spending Departments, including the Home Office, to ask what work they had done to prepare for the national identity register and what cost estimates they had made. Even the Treasury said that it had done nothing to prepare for the great event. I suspect that it had done nothing because it did not want to become embroiled in an unquantified, unquantifiable and hugely expensive financial disaster, which the project seems likely to become. The least that we can expect from the Government is openness and transparency, but so far no credible reason has been advanced in this House or in the other place—I have not heard one this evening either—for preventing the House of Commons from having a right of scrutiny in respect of the huge sums of public money that the Government intend to spend on the ID cards system and the national identity register scheme. Whether we spend £5.84 billion over 10 years, as the Government suggest, or the £19 billion to £24 billion that the London School of Economics report suggests, makes no difference to the principle. The House must know what it is giving the Government permission to spend. There has been no willingness to be candid about the start-up costs, the capital costs, the transaction costs, the volumes or a host of other necessary details. I am driven to the conclusion that the Minister is not quite clear on what those concepts are. That puzzles and worries me.