FOI release

Overseas passport applications: processing cost forecast, 2013 to 2014

Published 5 March 2014

FOI release 30133

1. Overseas British passports - fees costings forecast for 2013-14

   The overseas fee covers the full cost of both the UK and overseas operation to support the 350,000 overseas applications, both European and non- European, per year. Costs of £41.4m are forecast for 2013-14

   Her Majesty’s Passport Office direct cost of passport production including UK	£11.7m
   FCO direct costs, including IT maintenance, redundancies, decommissioning estate	£4.9m
   Costs of staff working in FCO passport centres	£10.3m
   Share of FCO management & support and central overheads allocated to overseas passport operation	£14.5m.
   Total	£41.4 million

   Costs of £41.4m equate to an average fee of £118 per applicant (the fee is currently set at £128 per adult applicant and £81.50 per child).

2. During this repatriation transition period, HM Passport Office and FCO will be working to remove the costs associated with operating in the current overseas network. This will involve closing down operations, leaving estate, removing overheads and decommissioning systems. But these costs cannot be removed overnight and will largely be in place until the end of the repatriation process. For example, the overhead involved in running the overseas operation will remain in place throughout, as will the cost of running the system used until it is finally switched off. The full cost base in each location will remain in place until the transition for that location is complete. Thereafter, the related exit costs, such as vacating the premises and losing staff have to be recovered from overseas fees, as will the costs of processing applications received from overseas in the UK. As such, Her Majesty’s Passport Office is not expecting to over- recover from overseas fee payers.

UK passport fees both in the UK and overseas are set annually, following review by HM Treasury, to recover the full cost of providing passport services to UK citizens. It is never intended that passport services should make a profit or a loss, although, in reality, costs and passport demand can materialise differently to plans, which can lead to surpluses or deficits arising. Passport fees are contained within the Consular Fees Order and are maintained separately for UK and overseas applicants, to ensure they are treated fairly and consistently, each covering the costs associated with the totality of services provided to those customers. Her Majesty’s Passport Office does not anticipate any surpluses being generated from the overseas service during transition.

Once the transition is complete, all overseas exit costs have been incurred and all applications are being processed in the UK, we will be in a position to review the new cost base associated with processing overseas applications and revise the fees as appropriate. However, given that we will need to continue to provide some local overseas services for applicants in certain countries where it is not possible to send applications directly to the UK there will remain a differential in cost base between overseas and UK services. Inevitably this will mean that fees will also continue to have some form of differential beyond completion of the integration programme in March 2014.