The financial implications for the Bureau and the taxpayer

4.16  The Bureau was intended to break even within five years of being set up. The original Business Plan was based on fee levels of up to £18 for all applications including volunteers. In spring 2001, the fee for both Standard and Enhanced Disclosures was set at £12, and it was decided that volunteer applications were to be processed free. Business volumes have been much lower than originally estimated for Enhanced and Standard Disclosures, and volumes have also been lower due to the absence of Basic Disclosures. The reduced volumes have been the main reason for financial variances. These factors, together with delays in the start of the service and increased costs, mean that full cost recovery will not now be achieved until 2005-06. The deficit (see Figure 13) will be funded through greater provision from the Home Office and contributions from other Government Departments.

4.17  Both sides have incurred additional costs. Capita paid or are paying:

■  £555,000 in service credits for the three month delay to November 2001;

■  £135,000 in service credits for lack of functionality in the system (for example, no web access) to January 2003;

■  £1.1 million in service credits for failing to meet service standards in the period March 2002 to January 2003; and

■  £1.9 million in service credits for not meeting service levels from 1 February 2003.

4.18  Under normal contract change procedures, the Agency paid Capita:

■  an additional £2.2 million for changes to requirements during the implementation phase;

■  £1.7 million for effecting the bulk paper channel; and

■  £4.5 million to cover the costs of additional system and pilot testing and consequent delay to the start of the service.

4.19  Up to January 2003 Capita has been paid £20.4 million for their work associated with processing Disclosure applications and a further £2.9 million for accommodation and other ancillary charges.