By Nick Heath, 17 January 2008 12:43
NEWS
The government has admitted it cost £2.25m to send letters of apology to people affected by the loss of 25 million child benefit records by HM Revenue & Customs (HMRC).
The seven figure bill provoked outrage from the Taxpayer's Alliance who attacked the HMRC for losing the two CDs after it posted them to the National Audit Office last year.
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Financial secretary to the Treasury, Jane Kennedy, revealed the cost in written answers to the House of Commons.
She said: "The cost of sending letters to the families affected by the recent loss of data by HMRC is estimated at £2.25m including postage costs."
Both Conservative and Liberal Democrats MPs attacked the huge spend and said if any of the letters had gone missing it could have triggered a second wave of data loss.
The Treasury and the HMRC defended the decision to send out the letters saying it was right to approach those affected individually.
The revelation follows the Metropolitan Police's announcement that it would seek the full costs from HMRC for the force's hunt for the missing discs.
The bill for the search, which is now winding down, has been reported as being the most expensive lost property inquiry in the UK.
Comments
There are 11 comments. Join the discussion
1. Jeremy Wickins
£11 per letter!!!!!!!!! What the hell were they doing? - getting calligraphers to write each one individually on finest parchment, then sending them by sending each letter by registerd post , maybe. More incompetence ... when will they learn??
2. Karen Challinor
Jeremy I think you divided the wrong way round it should be 2.25m/25m, which comes out at 9p per letter
it's still a lot of taxpayers money though
3. anonymous
And i bet those involved in the fiasco will still get a nice fat bonus!!
This cost should be taken out of the incompetent HMRC staff sallery's.
4. Chris Goodman
I trust (LOL) that this is being absorbed by savings elsewhere in HMRC's operating budget.
Seems like those insulated from reality civil servants in their cushy jobs just don't care how much of our money they fritter wastefully away.
How much cheaper to put advertisements in every newspaper in the land.
5. Nick duncombe
No it's £11 per letter.
HMRC couldn't possibly do it for 9p a letter - Do they use the Post Office to deliver letter!
6. Nick Cole
A very expensive junior official's idea of saving a few thousand pounds!
Unfortunately it'll probably mean that they will get a promotion to somewhere else in the near future. Or perhaps he/she is already at the one level above their competence!
The end result of the bureaucratic short term thinking approach and dismissing common-sense advice and experience.
7. Karen Challinor
Nick 25 million letters at £11 each
would cost £11 x 25million or £275million
whereas
25 million letters at £ 0.09 each
cost
£0.09 x 25 million or £2.25million
so it's got to have cost 9p per letter
it's still a lot of money
8. Jeremy Wickins
Karen, you are correct I'm delighted to say! I really was worried about my figure (I blame the flu I've had for a fortnight)! However, 9p suggests that there has been some "creative accounting": the postage costs, paper, printing etc must have costmore than that. This is potentially more worrying than my inflated costing. Has anyone seen a breakdown of the figures supplied (a brief Google search hasn't come up with anything).
9. Robin Marks
The HMRC are saying they have sent letters for 9p each.
If you take the cost of printer ink, paper, envelopes, staff and equipment costs, 9p is probably the real cost of producing a letter without postage. Add on cost of postage of 9p and the true cost is likely around £5.5m.
10. Richard
A simple sum but only part of the true cost:
HMRC would have sent about 7 million letters to the 7 million households involved.
~7M x 32pence = ~2.25M Pounds
In other words, they've only reported the (approx) cost of the stamps.
11. Alistair Thomas
The first question we should be asking is not why was such an important CD was sent by post? but what sort of security clearance was necessary to even create such a dangerous CD in the first place.
This wasn't the fault of a junior officer acting incompetently. The public has the right to expect that our systems should be robust enough enough to prevent such a large-scale catastrophe except from a concerted conspiracy at the very highest level of the civil service (and then maybe - with cross checks from different departments or independent officers).
No, this is symptomatic of a root and branch failure of management and systems to collect, hold and correctly use data. How many other gaffs of less significance have gone unreported in this department. If this department has no idea of even the basics of data protection, how many other departments are similarly ignorant?
This was nothing short of a disaster which could only have happened with a complete absence of any intelligence at junior management all the way up. I'm stunned this isn't being taken more seriously. Very senior people in the civil service should have their jobs and pensions on the line for this error and all the other errors that are possible in a system without any evident safeguards.
Given the potential for error in the light of such basic failings in this dept and possibly others, I suspect that the £2.25M is a mere drop in the ocean compared to the real damage that has happened and is probably still happening. This story is a lot bigger than a missing CD and yet it's significance seems to have gone largely unreported so far.