Passport costs increasing

NineDeuce

EachPenny wrote: »

Inflation doesn't have much to do with it though. The passport is a product of a monopoly who can charge what they can get away with.

In 2009 the price increased from £72 to £77.50. In 2012 the price was reduced by £5.

Therefore if we measure the change from 2012 then the 10-15% increase needs to be spread out over five and a half years. I don't have the inflation figures to hand, but I'd be reasonably confident that the cumulative effect of inflation over that time would indeed increase the cost of a £72.50 passport by more than £3.

The larger price increases have more to do with discouraging people from applying by post. And that is perhaps a moral question suitable for a different board, rather than a financial one.

That's not true. The passport is a public/government product and service. They are not allowed to operate in a commercial way which would see the major stakeholders/executives boost their own incomes. If they get a third party involved, a company to manufacture the passports, for example, then the government has to tender the work and get the best value for money. Therefore, reasons for increases have to be linked to costs involved.

But lets suppose they were profit driven, what would be the point of reducing their prices in 2012?

tenchy

Uxb wrote: »

I'm currently an executor of a deceased's estate
I have had to provide passport and sometimes also full address ID by way of an original bank/credit card statement to the following list:
Registrar of Deaths.
his Solicitor.
His Accountant.
His IFA.
The RICS surveyor valuing the house for IHT purposes.
The post office when submitting a postal redirect of the mail to myself
His bank when getting a funeral cheque out of them from his accounts

Even when recently renewing my ticket at the Public Record Office in Kew, London I stood in a queue with others doing the same all with our passports and original bill for address ID in our hands.

The passport has now become our defacto ID card, and indeed in some countries you might visit you are required to carry your passport with you at all times.

Yes, and most of those are ridiculous requirements serving no purpose. So you go to register the death: Passport please. Sorry mate, haven't got one. Driving licence? Nope. So what happens then? Presumably you need some paperwork from the hospital or doctor or similar confirming the death. Why is that not enough? Of course! I forgot! Bogus death registering is getting right out of hand so we must crack down on it!

EachPenny

NineDeuce wrote: »

That's not true. The passport is a public/government product and service. They are not allowed to operate in a commercial way which would see the major stakeholders/executives boost their own incomes. If they get a third party involved, a company to manufacture the passports, for example, then the government has to tender the work and get the best value for money. Therefore, reasons for increases have to be linked to costs involved.

No, that's not true. With a very few exceptions public sector services are charged for at a level decided by the Government - either national or local. They are free to set the charge at whatever they reasonably want, subject to any legislative limit. The key test is 'reasonable' - the body setting the charge might have to justify its reasonableness if challenged by way of judicial review.

In the case of the passport, you are not just buying a paper document, but also gaining access to services overseas in the event of difficulties. The Government claim that the current cost of the passport does not fully recover the costs associated with issuing them and the services provided to travellers, and therefore they want to increase the cost so the taxpayer subsidy is reduced.

Exactly the same principles apply to other public services such as rail travel. The cost of a ticket only pays a proportion of the cost of running the railway and the remainder is funded by the taxpayer. The reason for above inflation rail fare increases in recent years is the Government wanted to rebalance the contributions made by the user and the taxpayer. The cost of rail tickets has risen far more than increases in spending on the railways or improvements to services. And the Government have done that because they can.

As I understand it, the production of passports is a contracted out service, which as you say was subject to competitive tender. I don't know the precise details of the contract, but the typical arrangement would be an establishment charge (for having the necessary people and systems in place) plus a volume charge (for each document issued). The contract would normally specify cost increases (or decreases) depending on factors such as inflation and volume of work.

The fee for the passport would typically be paid to the Government, not to the contractor, although the contractor might be employed to process the payment. The collected fees would go into the relevant government service's budget, be topped up with taxpayer funding if necessary, and then the appropriate contractural payment would be sent to the contractor when due. The contractor would not get a direct benefit from the increase in the passport fee paid by the applicant.

The link between the amount charged for a passport (or most public services) and what it costs to provide is only a political one. If the Government makes a large profit from the passport service then it is harder for them to justify increasing the cost of a passport, but could do on the basis of introducing new services - which is what the Labour Government did to pay for the failed National ID Card scheme.

NineDeuce wrote: »

But lets suppose they were profit driven, what would be the point of reducing their prices in 2012?

It was a political point. The new Government had been critical of the increase in passport fees to pay for the ID scheme and used 'streamlining' of public services (as part of austerity) as a tool to deliver a £5 reduction. If you like it was a way of convincing the public there could be some benefits from swingeing cuts to public services.

The reduction has been delivered after a restructuring programme within the Identity and Passport Service, which has delivered savings of £40million in the last financial year. The standard adult passport fee will remain at £72.50 for at least the next two years.
https://www.gov.uk/government/news/new-reduced-price-for-passports

veryintrigued

NineDeuce wrote: »

That's not true. The passport is a public/government product and service. They are not allowed to operate in a commercial way which would see the major stakeholders/executives boost their own incomes.

You mean like state owned banks?