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Delays in issuing passports earlier this year led to much anxiety and inconvenience for members of the public hoping to travel. By June, the Passport Agency had around 565,000 applications awaiting processing. Sir John Bourn, head of the National Audit Office, reported to Parliament today on the delays at the Agency during Summer 1999.

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Several factors contributed to cause the problems. The initial cause was the introduction from October 1998 of a new passport processing system in two of the Agency’s six offices – Liverpool and Newport. The new system was intended to replace an ageing computer system and to produce a more secure passport. Siemens Business Services is responsible for developing and providing the new computer system and for undertaking the initial processing of applications.

Sir John singles out:

  • a failure to assess and test adequately the time needed by staff to learn and work the new passport processing system, which involved some changes in clerical and administrative processes as well as computerisation;
  • insufficient contingency planning in the event that implementation of the new system might not go according to plan. Extending the pilot from Liverpool to Newport before problems were fully overcome compounded the problem; and
  • a failure to communicate effectively with the public, both at a personal level in dealing with calls from the public to its telephone enquiry bureau, and more generally via the media.

The strategy adopted by the Agency in early 1999 to get through the busy season rested on its past experience that it would be able to increase output by increasing overtime and hiring casual staff. A recovery plan was agreed between the Agency and the Home Office in March, including the recruitment of extra staff. However, the Agency did not foresee the loss in public confidence, which led to a sharp increase in applications and enquiries about them, once the delays attracted publicity. This was exacerbated by a higher volume of applications for child passports than the Agency expected. Whilst the Agency took action to make up for lost production in Liverpool and Newport – in May monthly output was 619,000 compared to a peak of 564,000 in the previous year – it was not able to make up for the increase in applications. The Agency was too reliant on using routine solutions, such as staff and managers working longer and longer hours to cope.

On the cost of the problems:

Sir John estimates that the cost of the additional measures taken by the Agency to deal with the failures during the year from October 1998 will be around £12.6 million, including £6 million for additional staffing.

Total compensation paid to members of the public for missed travel and other expenses currently amounts to £161,000, but is likely to rise further. Almost 500 travel dates were missed over the period and many more people were inconvenienced. Whilst the Agency’s performance over the Summer was at or around its target of meeting 99.99 per cent of travel dates, the Home Office accepts that this target did not reflect a meaningful standard of service for the public.

The Agency has received compensation totalling £69,000 from its contractors for shortfalls in performance. The Agency has waived other compensation due from Siemens, estimated by the Agency to be worth £275,000. Initially, the waivers had been granted by the Agency to allow time for the new system to settle down. The Agency is now discussing with Siemens how the costs of the crisis are to be shared.

On the action taken to prevent the problems recurring:

The Agency now faces a decision whether and when to roll out the system to its remaining offices. The new passport processing system has yet to achieve its performance targets; but the Agency and Siemens are now considering a range of measures to improve productivity. Nonetheless, the Report records that the unit cost to the taxpayer of producing a passport would rise, in the absence of other changes, to £14 in the medium term, compared to £12 in the Agency’s business case. These costs are recovered through the passport fee, which also helps to recover the cost of some consular services provided by the Foreign and Commonwealth Office.

The Agency is also considering a number of additional measures to improve its services to the public including, for example, an expansion of its telephone enquiry service and passport issuing service to cope with demand during peak periods. These additional measures are likely to add over £3 to the cost of producing each passport, bringing the unit cost to over £17 from 2000-01.

On the lessons to be learned:

Sir John commented “this case highlights a number of important lessons which all departments and agencies delivering services to the public will wish to consider”. The Report identifies ten points, in particular, including:

  • a need for proper testing of new systems before committing to live operation, in particular for staff to learn and work the system;
  • a need to have realistic contingency plans in place; and
  • a need, when service delivery is threatened, to have the capability to keep the public well informed.

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