regional offices · 9 780102 928297 isbn 0-10-292829-0 published by tso (the stationery office) and...
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9 780102 928297
ISBN 0-10-292829-0
Published by TSO (The Stationery Office) and available from:
Onlinewww.tso.co.uk/bookshop
Mail,Telephone, Fax & E-mailTSOPO Box 29, Norwich, NR3 1GNTelephone orders/General enquiries: 0870 600 5522Fax orders 0870 600 5533Order through the Parliamentary Hotline Lo-call 0845 7 023474 E-mail: [email protected] 0870 240 3701
TSO Shops123 Kingsway, London,WC2B 6PQ020 7242 6393 Fax 020 7242 639468–69 Bull Street, Birmingham B4 6AD0121 236 9696 Fax 0121 236 96999–21 Princess Street, Manchester M60 8AS0161 834 7201 Fax 0161 833 063416 Arthur Street, Belfast BT1 4GD028 9023 8451 Fax 028 9023 540118–19 High Street, Cardiff CF10 1PT029 2039 5548 Fax 029 2038 434771 Lothian Road, Edinburgh EH3 9AZ0870 606 5566 Fax 0870 606 5588
The Parliamentary Bookshop12 Bridge Street, Parliament Square,London SW1A 2JXTelephone orders/General enquiries 020 7219 3890Fax orders 020 7219 3866
TSO Accredited Agents (see Yellow Pages)
and through good booksellers
UK PASSPORT SERVICE
ANNUAL REPORT AND ACCOUNTS
2003–2004U
KPA
SS
PO
RT S
ERVIC
EAnnual R
eport and Accounts 20
03
–2
00
4
REGIONAL OFFICES
Glasgow
Durham
Peterborough
London &HeadquartersNewport
Belfast
Liverpool
Contact:Passport Adviceline on 0870 521 0410www.passport.gov.uk
9 780102 928297
ISBN 0-10-292829-0
Published by TSO (The Stationery Office) and available from:
Onlinewww.tso.co.uk/bookshop
Mail,Telephone, Fax & E-mailTSOPO Box 29, Norwich, NR3 1GNTelephone orders/General enquiries: 0870 600 5522Fax orders 0870 600 5533Order through the Parliamentary Hotline Lo-call 0845 7 023474 E-mail: [email protected] 0870 240 3701
TSO Shops123 Kingsway, London,WC2B 6PQ020 7242 6393 Fax 020 7242 639468–69 Bull Street, Birmingham B4 6AD0121 236 9696 Fax 0121 236 96999–21 Princess Street, Manchester M60 8AS0161 834 7201 Fax 0161 833 063416 Arthur Street, Belfast BT1 4GD028 9023 8451 Fax 028 9023 540118–19 High Street, Cardiff CF10 1PT029 2039 5548 Fax 029 2038 434771 Lothian Road, Edinburgh EH3 9AZ0870 606 5566 Fax 0870 606 5588
The Parliamentary Bookshop12 Bridge Street, Parliament Square,London SW1A 2JXTelephone orders/General enquiries 020 7219 3890Fax orders 020 7219 3866
TSO Accredited Agents (see Yellow Pages)
and through good booksellers
UK PASSPORT SERVICE
ANNUAL REPORT AND ACCOUNTS
2003–2004
UK
PAS
SP
OR
T SER
VICE
Annual Report and Accounts 2
00
3–
20
04
REGIONAL OFFICES
Glasgow
Durham
Peterborough
London &HeadquartersNewport
Belfast
Liverpool
Contact:Passport Adviceline on 0870 521 0410www.passport.gov.uk
Passport errorsTo reduce the level of passportsreturned with errors after issue to0.25% (reduced from 0.33% in2002–03)
Not met: The level of passportsreturned with errors after issuewas reduced to 0.27%
Although the target was not met,the 0.27% error rate is asignificant improvement on2002–03 when the error ratewas 0.38%
PERFORMANCE TARGET RESULT
Customer satisfactionTo ensure a customersatisfaction rate of 93%
TurnaroundTo ensure that 99.5% ofstraightforward partner andpostal applications are turnedaround within 10 days
To ensure that 99.5% ofPremium and Fast Track servicesare turned around within theguaranteed period
Appointment timesTo ensure that 92% ofcustomers are seen within 20minutes of their appointmenttime
Telephone callsTo ensure that 90% oftelephone calls are answeredwithin 20 seconds
Exceeded: 95% of customerswere seen within 20 minutes oftheir appointment time
Exceeded: 99.9% ofstraightforward partner and postalapplications were turned aroundwithin 10 days, despite demandvolumes of 7% above plan
Partly met: 99.5% of Fast Trackapplications were processedwithin service standards; 98.8%of Premium service applicationswere processed within servicestandards
Exceeded: The averagecustomer satisfaction rate was98%
Not met: The number oftelephone calls answeredwithin 20 seconds was 89%
The volume of calls, at 3.3million, were 3% higher than2002–03
90%
92%
94%
96%
98%
100%
1999–00 2000–01 2001–02 2002–03 2003–04
Actual
Target
Customer satisfaction
Turnaround of postal and partner applications within 10 days
98.4%
98.6%
98.8%
99.0%
99.2%
99.4%
99.6%
99.8%
100.0%
2000–01 2001–02 2002–03 2003–04
Actual
Target
Customers seen within 20 mins of appointment
84%
86%
88%
90%
92%
94%
96%
98%
100%
2001–02 2002–03 2003–04
Actual
Target
86%
87%
88%
89%
90%
91%
92%
2000–01 2001–02 2002–03 2003–04
Actual
Target
Telephone calls answered within 20 seconds
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
0.40%
2000–01 2001–02 2002–03 2003–04
Returnedpassports
Target
Average number of passports returned with error
The staff satisfaction survey isundertaken every two years, and waslast completed in 2002–03. At thattime, 77% of staff were satisfied withtheir job
A new survey is due for completionin early 2005
Staff developmentTo invest 4.5% of salary cost intraining and development
Staff turnoverTo ensure staff turnover ratedoes not exceed 12%
Not met: The percentage ofsalary cost spent on training anddevelopment was 4.1%
Exceeded: The staff turnover ratefor the year was 9.1%
PERFORMANCE TARGET RESULT
Unit costTo achieve a unit cost of £24.41
Surplus/deficitTo achieve a surplus, after FCOcosts, of £15.4 million
Staff absenceTo ensure that the averageannual staff sickness absencerate does not exceed 11 daysper (full-time equivalent)member of staff
Invoice paymentTo ensure 97% of invoices arepaid within 30 days of receipt
Not met: The average rate ofsick absence was 11.1 days per(full-time equivalent) member ofstaff, however sick absence hashad a downward trend over thepast ten years
Exceeded: The total surplus,after FCO costs of £40.7 million,was £29.1 million
Exceeded: An average unit costof £22.86 was achieved
Exceeded: The averagenumber of invoices paid within30 days was 99%
Passport unit cost
0
5
10
15
20
25
30
1998–99 1999–2000 2000–01 2001–02 2002–03 2003–04
Pou
nds
Actual
Target
0
5
10
15
20
25
30
35
40
45
2000–01 2001–02 2002–03 2003–04
Actual
Target
Surplus after FCO costs
Mill
ion
poun
ds
Staff sickness absence
0
2
4
6
8
10
12
14
16
95
96
97
98
99
99
–0
0
00
–0
1
01
–0
2
02
–0
3
03
–0
4
Day
s pe
r an
num
Actual
Target
84%
86%
88%
90%
92%
94%
96%
98%
100%
1998–99 1999–2000 2000–01 2001–02 2002–03 2003–04
Actual
Target
Invoice payment within 30 days
Staff satisfactionTo ensure a staff satisfaction ratewith working for the UKPS of 90%
CONTACT:
If you wish to receive further information on any of the issues in this document or have any questions relating to the services
provided by the UK Passport Service, please contact:
Marketing and Communications Directorate
UK Passport Service
Globe House
89 Eccleston Square
London SW1V 1PN
Or via the Passport Service website: www.passport.gov.uk
You can also contact the Passport Adviceline (24 hours a day, 7 days a week)
0870 521 0410
(Calls are charged at national rate)
All media enquiries should be directed to the Home Office Press Office:
020 7273 4545
Passport errorsTo reduce the level of passportsreturned with errors after issue to0.25% (reduced from 0.33% in2002–03)
Not met: The level of passportsreturned with errors after issuewas reduced to 0.27%
Although the target was not met,the 0.27% error rate is asignificant improvement on2002–03 when the error ratewas 0.38%
PERFORMANCE TARGET RESULT
Customer satisfactionTo ensure a customersatisfaction rate of 93%
TurnaroundTo ensure that 99.5% ofstraightforward partner andpostal applications are turnedaround within 10 days
To ensure that 99.5% ofPremium and Fast Track servicesare turned around within theguaranteed period
Appointment timesTo ensure that 92% ofcustomers are seen within 20minutes of their appointmenttime
Telephone callsTo ensure that 90% oftelephone calls are answeredwithin 20 seconds
Exceeded: 95% of customerswere seen within 20 minutes oftheir appointment time
Exceeded: 99.9% ofstraightforward partner and postalapplications were turned aroundwithin 10 days, despite demandvolumes of 7% above plan
Partly met: 99.5% of Fast Trackapplications were processedwithin service standards; 98.8%of Premium service applicationswere processed within servicestandards
Exceeded: The averagecustomer satisfaction rate was98%
Not met: The number oftelephone calls answeredwithin 20 seconds was 89%
The volume of calls, at 3.3million, were 3% higher than2002–03
90%
92%
94%
96%
98%
100%
1999–00 2000–01 2001–02 2002–03 2003–04
Actual
Target
Customer satisfaction
Turnaround of postal and partner applications within 10 days
98.4%
98.6%
98.8%
99.0%
99.2%
99.4%
99.6%
99.8%
100.0%
2000–01 2001–02 2002–03 2003–04
Actual
Target
Customers seen within 20 mins of appointment
84%
86%
88%
90%
92%
94%
96%
98%
100%
2001–02 2002–03 2003–04
Actual
Target
86%
87%
88%
89%
90%
91%
92%
2000–01 2001–02 2002–03 2003–04
Actual
Target
Telephone calls answered within 20 seconds
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
0.40%
2000–01 2001–02 2002–03 2003–04
Returnedpassports
Target
Average number of passports returned with error
The staff satisfaction survey isundertaken every two years, and waslast completed in 2002–03. At thattime, 77% of staff were satisfied withtheir job
A new survey is due for completionin early 2005
Staff developmentTo invest 4.5% of salary cost intraining and development
Staff turnoverTo ensure staff turnover ratedoes not exceed 12%
Not met: The percentage ofsalary cost spent on training anddevelopment was 4.1%
Exceeded: The staff turnover ratefor the year was 9.1%
PERFORMANCE TARGET RESULT
Unit costTo achieve a unit cost of £24.41
Surplus/deficitTo achieve a surplus, after FCOcosts, of £15.4 million
Staff absenceTo ensure that the averageannual staff sickness absencerate does not exceed 11 daysper (full-time equivalent)member of staff
Invoice paymentTo ensure 97% of invoices arepaid within 30 days of receipt
Not met: The average rate ofsick absence was 11.1 days per(full-time equivalent) member ofstaff, however sick absence hashad a downward trend over thepast ten years
Exceeded: The total surplus,after FCO costs of £40.7 million,was £29.1 million
Exceeded: An average unit costof £22.86 was achieved
Exceeded: The averagenumber of invoices paid within30 days was 99%
Passport unit cost
0
5
10
15
20
25
30
1998–99 1999–2000 2000–01 2001–02 2002–03 2003–04
Pou
nds
Actual
Target
0
5
10
15
20
25
30
35
40
45
2000–01 2001–02 2002–03 2003–04
Actual
Target
Surplus after FCO costs
Mill
ion
poun
ds
Staff sickness absence
0
2
4
6
8
10
12
14
16
95
96
97
98
99
99
–0
0
00
–0
1
01
–0
2
02
–0
3
03
–0
4
Day
s pe
r an
num
Actual
Target
84%
86%
88%
90%
92%
94%
96%
98%
100%
1998–99 1999–2000 2000–01 2001–02 2002–03 2003–04
Actual
Target
Invoice payment within 30 days
Staff satisfactionTo ensure a staff satisfaction ratewith working for the UKPS of 90%
CONTACT:
If you wish to receive further information on any of the issues in this document or have any questions relating to the services
provided by the UK Passport Service, please contact:
Marketing and Communications Directorate
UK Passport Service
Globe House
89 Eccleston Square
London SW1V 1PN
Or via the Passport Service website: www.passport.gov.uk
You can also contact the Passport Adviceline (24 hours a day, 7 days a week)
0870 521 0410
(Calls are charged at national rate)
All media enquiries should be directed to the Home Office Press Office:
020 7273 4545
UK PASSPORT SERVICE
ANNUAL REPORT AND ACCOUNTS
2003–2004
Presented to the House of Commons pursuant to Section 7 of the Government Resources and Accounts Act 2000.
Ordered by the House of Commons to be printed 13 July 2004.
HC 803
London: TSO
£16.35
>>
CONTENTS
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
CHIEF EXECUTIVE’S MESSAGE v
INTRODUCTION 1Objectives 1Working in Partnership 2Our Structure 2Annual Report 3
OPERATING ENVIRONMENT 4Passport Demand 4Passport Fraud 4Identity Cards 4Modernising Government Agenda 4Freedom of Information Act 4
REVIEW OF THE YEAR 5Key Achievements 5
PLANNING PRIORITIES 6Customer Service: Responding to Customer Needs 6Quality and Security: Improving Fraud Prevention and Detection 6Efficiency and Finance: Achieving Operational Efficiency and Business Assurance 6Achieving through People: Unlocking Staff Potential 6Innovation and Development: Maximising the use of Technology 6
CUSTOMER SERVICE 8Responding to Customer Needs 9Maintaining Customer Service Standards 9
QUALITY AND SECURITY 11Improving Fraud Prevention and Detection 12Secure Delivery of Passports 12Personal Identity Project 12Omnibase 12Lost, Stolen and Recovered Passports Database 12Fraud and Intelligence Units 13Joint Working with other Agencies 13
EFFICIENCY AND FINANCE 14Achieving Operational Efficiency and Business Assurance 15Improve Productivity 15Process Mapping 15Maintain Effective Contract Management 15Risk and Assurance 15
ACHIEVING THROUGH PEOPLE 16Unlocking Staff Potential 17Training and Development of Staff 17Integrated Pay and Performance Management System 17
>>
iv
>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Re-accreditation as an Investor in People 18Implementation of Diversity Action Plan 18Development of Career Paths 18A Healthcare Programme 19Partnership with PCS 19Brightsparks 19
INNOVATION AND DEVELOPMENT 20Maximising the Use of Technology 21IT Strategy 21Person-centric Database 21ePassport 21Development of Management Information Systems 21Biometric Trial 21Internal IT Systems 21
FUTURE PRIORITIES 22Authentication by Interview 22Personal Identification Project (PIP) 22ONS Online 23Lost, Stolen and Recovered (LSR) Database 23ePassport 23Facial Recognition 23Second Biometric 23Passport Cards 23
CORPORATE AND SOCIAL RESPONSIBILITY 24Economic Factors 24Social Factors 24Environmental Factors 24
ACCOUNTS AND NOTES 25Foreword to the Accounts 25
STATEMENT OF THE UKPS AND CHIEF EXECUTIVE’S RESPONSIBILITIES 29
ANNUAL STATEMENT ON INTERNAL CONTROL 30
THE CERTIFICATE AND REPORT OF THE COMPTROLLER AND AUDITOR GENERAL TO THE HOUSE OF COMMONS 33
ACCOUNTS – FOR THE YEAR ENDED 31 MARCH 2004 34Notes to the Accounts 37
ACCOUNTS DIRECTION GIVEN BY THE TREASURY IN ACCORDANCE WITH SECTION 7 (2) OF THE GOVERNMENT RESOURCES AND ACCOUNTS ACT 2000 52
ANNEX (A) MEET THE MANAGEMENT TEAM 53
ANNEX (B) GLOSSARY OF TERMS 55
ANNEX(C) UKPS PUBLICATION SCHEME 56
ANNEX (D) DIVERSITY ACTIONS 58
FEEDBACK FORM 59
CHIEF EXECUTIVE’S MESSAGE
v
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
This Annual Report and Accounts summarises a further year of achievement for the UK Passport
Service.
The achievements outlined in this report are made against a backdrop of increased pressure on the
Service to maintain its reputation for the delivery of excellent customer service whilst remaining vigilant
to those who would try to access our services for illegal purposes. In response to this we have focused
resources on fraud prevention measures and have had a number of notable successes in this area.
Several new systems have been implemented during the year to strengthen the integrity of our
processes.
The year 2003–04 saw unprecedented levels of demand for passports, with over 5.9 million
applications being processed; some 7% above plan. Customer service has remained excellent with
almost all of our key targets met or exceeded, with continuing high levels of customer satisfaction. We
have delivered operational efficiency during the year and, despite a significant investment in fraud
prevention measures, have made a surplus that allows us to repay £26.7 million of past deficits to HM
Treasury.
Looking to the future, we have defined our vision: ‘To focus on stronger identity authentication for the
purpose of issuing passports.’ By focusing on stronger identity authentication we will provide better
customer service by safeguarding our customers’ identities. We benefit society by reducing identity-
associated criminal activity. We are making a strong contribution internationally to strengthen the
security of British travel documents. However, we will not lose sight of our primary role of enabling travel
as defined by our mission.
Our mission and vision are underpinned by a set of values that the UKPS aspires to reflect in everything it
does. We value our people, honesty and integrity, customer service, working together and personal
responsibility. The importance of our staff and their part in the excellent results contained within this
report cannot be underestimated. I would like to thank all staff for their continued commitment and hard
work. We have invested significantly in staff development and will continue to do so. I have also
strengthened the Board this year with the appointment of additional Executive and Non-Executive
Directors.
We cannot achieve our strategic objectives on our own and will be working in partnership with a range of
organisations in both the public and private sectors, as well as with the trade union representing our staff.
The achievements detailed in this report provide the UKPS with a sound platform for future
development. We have now embarked on a major change programme. Working with our staff and
partners, we will pursue this programme while ensuring that we continue to deliver excellence in service
to our customers.
Bernard Herdan
Chief Executive
>>
INTRODUCTION
1
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Our values'Customer service, working together, personal
responsibility, honesty and integrity and our people'
Our vision'To focus on stronger identity authentication
for the purpose of issuing passports'
Our mission'Confirming nationality and identity – enabling travel'
The UK Passport Service (UKPS) was established as an Executive Agency of theHome Office on 2 April 1991, and during the peak season this year employed2,890 full-time equivalent staff, over 90% of whom work in regional offices. It isresponsible for the issuing of passports to British nationals living in the UnitedKingdom. This responsibility is encapsulated in its mission, vision and values:
OBJECTIVES
In pursuit of its mission, the UKPS’s
main objectives, as reflected in its key
targets, are to:
• deal promptly, courteously and
efficiently with all enquiries
• provide services which support
diversity of customer choice
• maintain the integrity and accuracy
of documentation issued
• monitor the incidence and types of
fraud and take suitable measures to
prevent it
• improve efficiency and deliver value
for money
• ensure equality of opportunity for
staff
• develop the skills, professionalism
and job satisfaction of its staff.
Further details can be found in the
2003 UK Passport Service Framework
Document.
2
>>>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
• Our High Street partners
Worldchoice UK Limited and Post
Office Ltd are recognised as the first
port of call for those seeking
application forms. The partners also
provide a ‘Check & Send’ facility and
receive almost 45% of all
applications on behalf of the UKPS.
• Siemens Business Services (SBS)
provides services at the front end of
the passport production process. It is
responsible for providing mail-room
services, scanning application
forms, cashiering fees and initial
query handling with the applicant.
SBS also provided the IT
infrastructure to support all UKPS
passport applications operations
and is continuing to develop this.
• Security Printing and Systems Ltd
(SPSL) is responsible for printing over
90% of all passports.
• MM Group is responsible for dealing
with over 85% of all telephone
enquiries. It also handles
appointment bookings, e-mail and
electronic applications support on
behalf of the UKPS.
• Atos Origin provides IT and
infrastructure support to the
organisation.
• Special Mail Services Limited (SMS)
specialises in the secure delivery of
credit cards and other products for
the financial services industry. On 28
November 2003 the UKPS signed a
three-year contract with SMS for the
secure delivery of all UK passports.
INTAKE FRONT-ENDPROCESS
CORE EXAMINATIONAND ADJUDICATION
PRINTING OUTPUT
DIRECT POSTALAPPLICATIONS
APPLICATIONS THROUGHHIGH STREET PARTNERS
(URGENT) PERSONALAPPLICATION AT UKPS
OFFICES
SCANNING/DATA ENTRY EXAMINATION
PROCESS – IDAND
NATIONALITY
ADJUDICATIONDECISION
CENTRALPASSPORTPRINTING
ANTI-FRAUDCHECKS ANDADDITIONAL
EXAMINATIONS
COLLECT
DESPATCH
LOCALPASSPORTPRINTING(URGENTCASES)
ONLINEAPPLICATIONS
SUPPORTING IT INFRASTRUCTURE
HANDLING PUBLIC TELEPHONE ENQUIRIES
CASHIERING
CHECKCOMPLETENESS
= Outsourced
LEGEND:
Post Office & WorldChoice
SBS
MM Group
Atos Origin - Admin IT
SPSL
SMS
SBS - PASS
SBS
WORKING IN PARTNERSHIP
The UKPS works with a number of different partners at each stage of the passport issuing process:
OUR STRUCTURE
The UKPS Board has been restructured
this year, and has been strengthened
with the addition of a Strategic Planning
Director, a Commercial Director, and a
Director of Programmes. The Chief
Executive, Bernard Herdan, as Chief
Accounting Officer, remains directly
responsible to the Home Secretary for
the performance and future
development of the UKPS.
The UKPS Ministerial Advisory Board
was disbanded during the year.
However, a third Non-Executive Director
has been appointed to the UKPS
Management Board, and all three Non-
Executive Directors meet at least once a
year with the responsible Minister, and
have access to the Home Office sponsor
at other times during the year. The
Home Office sponsorship role is to be
strengthened.
3
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Management Board is responsible,
inter alia, for reviewing the progress of
the UKPS against its objectives, and
taking policy and operational decisions
as required. Full details of Board
members can be found in Annex (A) of
this report.
The financial probity of the UKPS is
overseen by an Audit Committee that is
chaired by a Non-Executive Director and
is attended by representatives from the
Home Office and National Audit Office.
The Service also consults its
stakeholders via the Consultative Panel
of Passport Users.
The UKPS Remuneration Committee
meets at least twice a year to determine
the reward appropriate to senior
managers other than those covered by
Senior Civil Service procedures. It aims
to ensure an appropriate balance
between internal and external
relativities, with account being taken of
performance and marketability. It is
chaired by a Non-Executive Director.
ANNUAL REPORT
This Annual Report covers the UKPS’s
performance over the financial year 1
April 2003 to 31 March 2004. It sets out
how the UKPS has performed against
the year’s key targets and tasks as
published in the UKPS Corporate and
Business Plan 2003–2008.
This document is primarily aimed at
those to whom the UKPS is accountable
and who are responsible for monitoring
the UKPS’s performance on behalf of
the public, including Ministers,
Parliament, the Home Office and the
UKPS Advisory Board. It also serves to
inform a number of groups interested in,
or affected by, the UKPS’s business. For
example, stakeholders such as partners
and people in the travel trade industry,
as well as the general public.
>>
OPERATING ENVIRONMENT
4
>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The UKPS continues to be a demand-led
organisation. Demand for passports in
the early part of the year was influenced
by the conflict in Iraq and the SARS
virus. Demand did recover during June
and July 2003. A well-publicised fee
increase and an announcement by the
United States regarding visa
requirements for travellers saw demand
reach unprecedented levels during
September and October 2003. It was
also extremely strong in the first quarter
of 2004. The combined result of all of
these factors is that the UKPS
processed 5.9 million applications for
passports, 7% above plan.
PASSPORT FRAUD
The UKPS remains vigilant to passport
fraud, and there has been extensive
evidence of the threat from this type of
crime. During the year it has worked in
partnership with the police and others
on a number of successful operations
targeting organised trafficking of illegal
immigrants and forged documents. Full
details of our fraud prevention activities
can be found in the ‘Quality and
Security’ section of this report.
IDENTITY CARDS
The year 2003–04 saw the UKPS
develop its role in support of the
Government’s identity card programme.
The UKPS has worked with the Home
Office ID Card Unit and with other
departments and agencies (including
the Department of Work and Pensions,
the Driver and Vehicle Licensing Agency
and the Immigration and Nationality
Service) to ensure a joined-up and co-
ordinated approach to the programme
is maintained across Government.
MODERNISINGGOVERNMENT AGENDA
The UKPS has made, and continues to
make, a significant contribution towards
implementing the modernising
government agenda. The UKPS is keen
to respond to the needs of all its
customers and recognises the
importance of responding to rising
customer expectations and changing
public behaviour when planning future
services. We continue to hold the
Charter Mark in recognition of our
excellent customer service standards.
We have made a commitment to provide
access to our services online, and are
currently developing an improved online
application route for launch in early
2005.
FREEDOM OF INFORMATIONACT
We remain fully committed to the
principles of the Freedom of Information
Act and have already published full
details of our publication scheme on our
website. Further details of the scheme
can be found at Annex (C) of this report.
The 2003/2004 strategic planning process identified sectors and activities that
would contribute to the achievement of UKPS’s objectives.
PASSPORT DEMAND
Demand 2003/04
0
200,000
400,000
600,000
800,000
Apr-03
May
-03
Jun-0
3Ju
l-03
Aug-03
Sep-0
3
Oct-03
Nov-0
3
Dec-0
3
Jan-0
4
Feb-0
4
Mar
-04
REVIEW OF THE YEAR
5
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The UKPS can be proud of its achievements over the year. During the last 12 months
it has received over 5.9 million applications for passports and processed an
extremely high proportion within service standards.
KEY ACHIEVEMENTS
• Met or exceeded the majority of our performance targets.
• Exceeded customer expectations in a number of areas.
• Strong financial performance allowed us to recover £26.7 million of past deficits.
• Successfully rolled-out a global passport-issuing database (Omnibase).
• Successful roll-out of the lost, stolen and recovered passport database.
• Introduction of secure delivery for passports.
• Enjoyed good employee relations via our partnership with the Public and
Commercial Services Union (PCS).
• Achieved re-accreditation as an Investors in People organisation.
• Input into an international decision on biometric chip passport standards.
• Key participant in the ID card programme.
• Defined a five-year integrated change programme (ICP).
• Supported the successful establishment of the Criminal Records Bureau as a
stand-alone agency.
Check & Sendservice
43%
Postal47%
Electronic2%
In-person8%
Amendments3%
Adult renewal51%
Child first-time
22%
Adult first-time
17% Child renewal7%
Applications by service type:actual 2003–04
Applications by route: actual 2003–04
>>
PLANNING PRIORITIES
6
>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The UKPS adopts a ‘balanced scorecard’
approach to planning and reporting
performance. This ensures a proper
balance is achieved between different
elements of the business. The five
elements of the balanced scorecard are:
• Customer Service
• Quality and Security
• Efficiency and Finance
• Achieving through People
• Innovation and Development.
The UKPS’s priorities set out in the
UKPS Corporate and Business Plans
2003–08 under the balanced
scorecard headings were as follows.
CUSTOMER SERVICE:Responding to Customer Needs
• To achieve a challenging set of
service standards.
• To improve the electronic application
route.
• To develop a passport card.
• To introduce secure delivery of all
passports.
• To identify the cause of passport
errors and work towards reducing
them.
QUALITY AND SECURITY:Improving Fraud Prevention andDetection
• To launch a global passport issuing
database in conjunction with the
Foreign and Commonwealth Office
(FCO).
• To build a global lost, stolen and
recovered passport database.
• To investigate and take action
against those seeking to obtain
passports illegally.
• To improve staff training in fraud
prevention and detection, and
create specialist fraud and
intelligence units.
• To work with other organisations
(both public and private) to share
data.
The following sections of the Annual
Report show how the UKPS has
performed against these objectives.
EFFICIENCY ANDFINANCE: Achieving Operational Efficiencyand Business Assurance
• To undertake measures to improve
operational efficiency.
• To maintain effective contract
management.
• To assess our wider market
activities.
• To undertake an annual review of
fees.
• To improve our internal control
framework, risk management and
audit.
INNOVATION ANDDEVELOPMENT:Maximising the use of Technology
• To undertake staff training
programmes.
• To develop the Personal
Identification Project.
• To assess the feasibility of creating a
person-centric database.
• To develop a biometric capability.
• To improve internal IT systems.
ACHIEVING THROUGHPEOPLE: Unlocking Staff Potential
• To deliver a quality training
programme to meet individual and
business needs.
• To reform existing performance
management arrangements linked
to pay reform.
• To develop a new competence
framework linked to new corporate
values.
• To manage attendance and poor
performance.
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>>
CUSTOMER SERVICE
8
9
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RESPONDING TOCUSTOMER NEEDS
We have continued to monitor our
performance against our customer
service standards. In addition to this, we
have continued to conduct independent
customer satisfaction surveys (via FDS
International) and ‘mystery shopped’ all
aspects of our services. We have also
run customer focus groups seeking
views on key proposals such as
biometrics and fee increases related to
improved security features.
When asked to assess our overall
performance, 98% of customers were
either satisfied or very satisfied with the
service received.
Our customer focus groups highlighted
continued support for fraud prevention
work, with customers viewing this as our
number one priority. The UKPS has
continued to enjoy Charter Mark
recognition during 2003–04.
A number of conferences and seminars
have enabled us to promote the efforts
of the UKPS in delivering effective
customer services.
The Chief Executive, Bernard Herdan,
gave a presentation to the
Parliamentary Information and
Technology Committee on using
technology to deliver public-sector
services.
The Deputy Chief Executive, Kevin
Sheehan, gave a presentation on
public/private partnership in business
process outsourcing in Berlin in October
2003, based on the UKPS’s experience.
The year 2003–04 saw the UKPS host a
number of overseas visitors including
delegations from Zambia, Israel, South
Korea and France. It also hosted the
Five Nations Conference with delegates
from Australia, Canada, New Zealand,
the United States and Japan meeting to
discuss customer service, operational,
technological and security issues.
Maintaining Customer ServiceStandards
Despite the number of applications
received being 7% above plan, the
UKPS has exceeded its target of
processing 99.5% of straightforward,
properly completed applications in ten
working days, achieving a 99.9%
standard.
Almost 450,000 applications were
made in person via our Fast Track or
Premium service options. We achieved
our target of processing 99.5% of Fast
Track applications within five working
days, but just missed our four-hour
turnaround time on our Premium
service, dealing with 98.8% of
applications against a target of 99.5%.
We achieved an accuracy rate of
99.73%, compared with 99.62% the
previous year.
Our call-centre operations, run in
partnership with the MM Group, dealt
with 3.3 million telephone enquiries
and answered 89% of these within 20
seconds. It dealt with almost 268,000
e-mail enquiries and responded to
100% of these within four hours of
receipt. This compares with 3.05 million
calls and 188,000 e-mails in 2002–03.
We received 7,094 complaints during
the year, which equates to just 0.13% of
our total business, and 1,685 positive
comments.
‘Truly the mostimpressive example ofcustomer service in anyfield I have experiencedto date.’
Roland Potts, London
‘ I am writing to expressmy sheer delight at theexpress service of thepassport service indelivering my passport.’
Miss V. Storey, Worcs
‘Faultless service.’
Dilwyn Jones, Devon
The UKPS call centre, run in partnership with the MM Group.
10
>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Improvements to our online application route
An easier online application route was introduced by the UKPS in December
2003. Outcomes included:
• in response to customer feedback, navigation, legibility and usability of the
online application route was improved
• data validation and help functions of the online application were improved.
Keeping customers informed
To advise customers of the new lost, stolen and recovered passports
telephone service and procedures, the UKPS sponsored the ITV2 Airline and
Holiday Airport series. This was the first time the UKPS has promoted its
services in this way and it was awarded two silver awards by the International
Visual Communication Association for:
• Best Animation, Graphics and Special Effects
• Best Business to Consumer Information
Passport cards
Work has continued to develop a passport card to make travelling to Europe
more convenient for British passport holders.
Liverpool Passport Office relocation
To improve the environment for both
customers and staff, work has been carried
out in preparation to move the Liverpool
Passport Office and it is on schedule to
occupy its new building in September 2004.
Quality and assurance teams
2003–04 saw the introduction of enhanced quality and security checks in
regional offices. Undertaking random checks on passports that are about to
be approved for issue, the team undertakes a thorough cross-check of the
documents and information provided. The number of passports issued with
errors has been reduced from 0.38% to 0.27%.
Other highlights for 2003–04 include:
QUALITY AND SECURITY
11
>
12
>>>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
IMPROVING FRAUDPREVENTION ANDDETECTION
There are strong links between identity
fraud and other forms of criminality. The
UKPS has strengthened its co-operation
with the police, Immigration Service and
other law-enforcement agencies. The
year 2003–04 saw members of staff
from the UKPS working on secondment
with some local police forces and other
agencies jointly to combat identity theft
and passport fraud.
Working with external organisations is
only one element of the UKPS’s fraud
prevention strategy; with substantially
more staff devoted to this work a
number of improvements to internal
operating systems and procedures have
been introduced during 2003–04.
Secure Delivery of Passports
Part of the 2003 fee increase has
enabled the UKPS to provide secure
delivery of passports to customers.
Working in partnership with Special Mail
Services Ltd, the initiative was rolled-out
across the UK in February/March 2004.
Although there have been some teething
problems, reported losses in delivery
have been drastically cut and over 98%
of passports are now delivered within 24
hours of printing. Remedial work is being
carried out to resolve outstanding
issues.
Personal Identity Project
Confirming a person’s identity is
absolutely key to the passport-issuing
process. To improve our identity
validation processes the UKPS has
been working on a trial basis to gain
access to information held on private
and public sector databases. In limited
geographic areas, applicants have been
asked to provide additional information
and consent to allow verification of their
data against a range of data sources. A
first trial was run in 2002–03 but the
results proved inconclusive. A new
larger-scale trial has been underway at
the Glasgow office in partnership with
Equifax during the year, and is expected
to conclude by the end of 2004. At that
point the UKPS will decide whether or
not to include this system as part of its
standard identity checking processes
for all applicants.
Omnibase
OmniBase has been developed by the
UKPS to provide online access to the UK
passport database by other government
departments.
OmniBase is fully rolled-out and is used to
support all Foreign and Commonwealth
passport issues overseas.
In addition, OmniBase is used by the
following government departments for
fraud or other investigations:
• DVLA
• CRB
‘The increased price hasbeen well worth it.’
Victoria Robinson,London
Operation Wisdom
The UKPS has been matching birth and death data for England and Wales
against passport records. This exercise has now been completed with over
1,000 names being placed on a World-Wide Warning List. Arrests have taken
place in the UK, USA, Canada, Australia and in Africa and Asia. The Team is
now working on data coming from Scotland and Northern Ireland.
Over 312,000 passports were
reported lost or stolen during
2003–04. Some of these were later
recovered from individuals trying to
enter the UK illegally. To improve the
speed at which we are advised of a
lost or stolen passport, we have
created a dedicated hotline for
customers as well as other routes by
which we are informed of losses by
customers, police and FCO posts
overseas.
We have created a global database
of passports that have been
reported as lost or stolen, ensuring
that the information is shared
rapidly with our colleagues in FCO
offices and the Immigration Service.
In 2004 it is planned to develop
sharing this data through Interpol
and European Union systems, as
well as bilaterally.
Lost, Stolen and Recovered Passports Database
13
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
• NCIS
• Immigration Service.
The UKPS is currently in discussion with
additional organisations regarding the
expansion of access to Omnibase:
• DfES
• Customs and Excise
• Special Branch
• expanding access within the
Immigration Service.
Fraud and Intelligence Units
The year 2003–04 has seen the UKPS
strengthen its internal fraud
investigation capabilities. Additional
staff have been recruited to each of our
regional offices to strengthen existing
fraud prevention units.
The responsibilities of the Fraud and
Intelligence Units (FIUs) include
undertaking both proactive and reactive
fraud investigations, and being
responsible for delivering fraud
awareness training to colleagues.
By March 2005, we will have 60
counter-fraud specialists (accredited by
Portsmouth University) working within
these teams, operating to policy and
guidance developed in accordance with
legal requirements.
Joint Working with other Agencies
The UKPS continues to work with a
range of investigative agencies,
including the police, and has
established close links with the UK
Immigration Service via an Immigration
Officer seconded to our Central Fraud
and Intelligence Unit at Globe House.
The UKPS also has an officer seconded
to the National Criminal Intelligence
Service, and through this arrangement
has developed links to other agencies
across the UK and beyond.
Since August 2003 the UKPS has had
two staff seconded to the Joint
Operation Maxim
During 2003–04 Operation Maxim was responsible for over 160 arrests.
Associated premises searched recovered 235 passports (both UK and others),
36 UK driving licences, a number of other identity documents (from the UK
and abroad) and immigration stamps. Enquiries also resulted in the seizure of
laminators, embossing machines and computers. Financial investigations
have secured £180,000 in cash seizures, £150,000 in confiscation orders
and £12,000 cash forfeited. In addition, over £1 million in other assets have
been identified and are awaiting restraint.
As a result of this success the UKPS has agreed to provide a further secondee
to another Operation Maxim team to be set up in July 2004.
Operation Primeline
A long-term investigation by officers from the UKPS and the Metropolitan
Police uncovered numerous false passport applications being submitted in
the London and South Coast areas with similar characteristics. From over 100
passport applications made by the main suspect, 43 passports were issued.
An arrest was made in April 2003. Following a lengthy court case the
defendant was found guilty in February 2004 on 28 counts of obtaining and
attempting to obtain passports by deception, and was sentenced to six years
for each charge (to run concurrently).
The Judge presiding over the case described the accused as ‘a thoroughly
dishonest man who set up a sophisticated system to circumvent the checks’.
Intelligence Unit of Operation Maxim, which is working with Metropolitan Police and
UK Immigration Service colleagues as part of a co-ordinated response to tackling
organised immigration fraud. These secondments will continue until 2006.
>>
EFFICIENCY AND FINANCE
14
15
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ACHIEVING OPERATIONALEFFICIENCY AND BUSINESSASSURANCE
We have continued to improve financial
performance and drive forward
efficiency throughout the organisation.
In 2003–04 our operating surplus after
FCO costs was £29.1 million, against a
target of £15.4 million. The extra money
was used to pay off the remaining £26.7
million of past deficits.
The additional surplus was generated
by higher than expected demand being
serviced by current staffing levels.
We have supported the Government’s
commitment on payment to suppliers by
paying 99% of all invoices received
within 30 days of receipt.
Financial probity and assurance (or
internal controls) are overseen by an
audit committee that is chaired by a
Non-Executive Director (with two others
as members) and meets on a quarterly
basis.
An Efficiency Plan has been developed
and a series of points of action have
been approved by the Board.
Mechanisms are being put in place to
track outcomes.
Improve Productivity
Unit cost performance was considerably
stronger than expected during the year,
through higher rates of staff
productivity.
This productivity improvement was
achieved through controlling
expenditure by maintaining the current
staff numbers, while experiencing
higher than expected demand.
Process Mapping
A business process mapping exercise
was commenced in each office during
the year. The focus of the exercise was
to map our key processes and highlight
any variations from office to office.
Numerous workshop sessions have
been held at each location for all key
processes, with business process maps
being developed.
Thirteen key processes have been fully
mapped and these are now available to
staff via our intranet, ‘Inform’. Work is
continuing to identify and remove
differences in processes, in an effort to
drive consistency and maximise the
productivity of processing activities.
Maintain Effective ContractManagement
To ensure better value for money and
more coherent management of our
relationships with our partner service
providers, a Commercial Director was
appointed in September 2003. By the
end of the financial year, savings of over
1% on non-payroll spend had been
gained through more effective
procurement arrangements. The
Commercial Director is also assessing
income generation opportunities for the
UKPS as part of its wider market
activities.
During the year the UKPS also
successfully undertook mid-term
contract reviews with its two major
outsourced service providers (SBS and
SPSL). The reviews ensured we continue
to provide value for money to the public
and strengthened our relationships with
our partners.
Risk and Assurance
The UKPS Board continued to review a
regularly updated list of the top ten
escalated risks to the service each
month throughout the year, and further
developed risk management
arrangements below Board level. The
UKPS did not need to implement its
large-scale business continuity plans
during the year. However, plans were
tested in a series of exercises as well as
some minor incidents, and have been
reviewed accordingly.
The Agency’s risk and assurance
functions were formally aligned in the
year to recognise the close
interdependencies of the functions.
Comprehensive risk registers are
maintained at each level of the
organisation for both operations and
change projects, with close attention
paid to the timely execution of
mitigation actions.
During the year Pricewaterhouse
Coopers delivered internal audit
services for the first year of a five-year
contract.
Full details of our internal control
system can be found at pages 30–32 of
the Accounts.
‘Congratulations onbeing the most efficientservice outlet I have everexperienced.’
Hedley Coombs, Hants
‘Congratulations on yourvery fast service.’
Lesley-Anne Wise,Cornwall
ACHIEVING THROUGH PEOPLE
16
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17
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
WORKING TOGETHER
• Teamwork to achieve results
• Supporting colleagues in new roles
CUSTOMER SERVICE
• Providing the best possible standards ofcustomer care
• Treating all customers with respect
HONESTY AND INTEGRITY
• Being open and frank about issues
• Behaving in a professional manner at all times
OUR PEOPLE
• Having the skills to do the job
• Being recognised for a job well done
PERSONAL RESPONSIBILITY
• Being accountable for what you do
• Learning from mistakes, not blaming others
*Our values symbols were designed by Lisa Phillipson from the Durham Passport Office, with most of thesymbols being based on British Sign Language
DELIVERING A DIFFERENCE
We value
UNLOCKING STAFFPOTENTIAL
The UKPS places a high priority on
ensuring its staff feel valued and
empowered. Based on the results of the
last staff survey, the UKPS has
embarked on a programme to address
areas of concern to staff and improve
levels of staff satisfaction. A number of
initiatives were pursued during
2003–04 including the launch of a set
of corporate values and the continuing
development of a new performance
management system.
A set of valued behaviours have been
developed and these will support the
recruitment and selection process of
the UKPS as well as potentially being an
integral part of the new performance
management system.
Training and Development of Staff
During the year, the UKPS invested 4.1%
of its salary costs on training and
developing staff, below our target of
4.5%. The delay of some programmes
such as those supporting the Integrated
Pay and Performance Management
System caused this shortfall. However,
extensive training was still delivered to
all levels within the organisation.
The senior management team has
taken part in a 360º appraisal exercise
and a leadership development
programme is now being implemented
to enable senior managers to develop
their personal and collective capability
to strategically lead the UKPS, and to
create an environment where staff can
positively rise to the challenges facing
the Agency.
A middle-manager programme has
been developed and implemented, and
will be expanded over the coming year.
Existing modules have been refreshed
for the First-Line Practical Manager
programme to achieve Institute for
Leadership and Management
accreditation.
Tender documents are being prepared
to transfer the examiner training
modules into e-learning units, to be
implemented across the business
during the Autumn of 2004. On
successful completion of all e-learning
units, examiners will be awarded an
internally-accredited certificate.
The UKPS has continued to support
non-vocational training via the Agency
Lifelong Learning scheme. During the
year 154 staff took part in a wide range
of vocational and non-vocational
activities, including learning languages,
studying health and social care
practice, and learning IT skills.
Integrated Pay and PerformanceManagement System
The year 2003–04 saw the introduction
of a corporate office bonus scheme,
where staff can earn a bonus of up to
£200 if pre-agreed targets are achieved
by the office. A bonus scheme for
members of the senior management
team has also been launched.
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>>>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Work was pursued on a new
performance management system,
however its introduction has been put
on hold and re-evaluated following the
results of a ballot of PCS (our trade
union) members. It is clear that staff
need further information on the system
prior to its introduction and aspects will
potentially require redesign.
Re-accreditation as an Investor inPeople
The UKPS was formally re-recognised as
an Investors in People (IiP) organisation
in June 2003. The IiP assessor did
identify some areas for improvement
but these were not significant enough
for the organisation not to be re-
recognised, and they are now receiving
further attention. A staff survey
undertaken in July 2003 revealed that
progress had been made in key areas
but there were still some areas that
needed attention, very much mirroring
what the IiP assessor had identified.
These are the subject of a combined
Investors in People and Staff Survey
action plan and remedial action is
underway.
Implementation of DiversityAction Plan
The UKPS’s commitment to diversity is
borne out by the results of the Staff
Survey. There is a comprehensive
diversity strategy in place and a
dedicated Diversity Manager oversees
the implementation of the diversity
action plan.
Diversity is about valuing our
differences and this ethos is the
cornerstone of the UKPS’s approach to
diversity in the workplace. Diversity is
treated as the responsibility of each
member of staff. During 2003–04
diversity activities included:
• a ‘buddy system’
• a mentoring programme
• comprehensive policies addressing
workplace bullying and harassment
• family-friendly policies including
paternity and adoption.
Disability forums continue to operate in
UKPS offices with disabled employees.
The forums are run by disabled
employees for disabled employees.
These forums feed into a central Home
Office disability forum, which feeds
back to ministers. The UKPS employs
167 disabled staff (6.9% of the total
average number of staff).
Full details of our diversity performance
can be found at Annex (d) of this
document.
Development of Career Paths
As part of the revised performance
management system, a revised career
path for examiner staff has been
proposed. The path consists of four job
roles – from newly recruited examiner to
‘Super’ examiner – and reflects the
skills and experience a person will gain
during the course of their career.
STOP PRESS
The UKPS is on the shortlist for
the prestigious Carl Bertelsmann
Prize 2004, awarded for
Organisational Culture and
Leadership in the Public Sector.
Staff Survey Results
• 58% of staff believe they have a good work/life balance
• 83% of staff understand the need for change
• satisfaction with the way performance is managed has increased by 12%
• development of line managers has improved
• we are firmly committed to equality of opportunity.
Areas for improvement
• information available to staff
• help to apply for promotion
• more feedback on individual performance
• management of change.
‘Your staff are FIRSTCLASS.’
Jeremy Usher-Smith,Kincussie
A Healthcare Programme
Influenza vaccinations were available to
all members of staff; 429 took
advantage of this during the year. A
health assessment programme has
been developed and offered to all staff,
with 1,000 taking part. An employee
counselling and welfare service is
available (available to staff 24 hours a
day, and known as the Employee
Assistance Programme (EAP)) and
individuals seeking to return to work
after a period of absence are offered
the opportunity to have an occupational
health assessment.
Partnership with PCS
Following the signing of the Partnership
Agreement with the Public and
Commercial Services Union (PCS) in
May 2002, the management of UKPS
has remained committed to working
closely with the Union. Despite
2003–04 being a challenging year,
employee relations within the UKPS
have continued to remain positive.
Focus Days have been held with senior
managers and national officers during
the year to discuss future developments
within the UKPS when the input from
the Union was extremely valuable.
A new Managing Attendance procedure,
which was developed in partnership
with PCS, was introduced in February
2004. Its aim is to reduce absence
within the organisation, which will
continue to be monitored throughout
the year.
19
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‘I was greeted bysmiling, cheerful andextremely helpfulpeople.’
Graham Coley,Peterborough
Brightsparks
We continued to support a staff suggestion scheme during 2003–04.
Launched in February 2003, the scheme is now one year old and has received
over 1,000 suggestions and made £5,330 in awards. A number of suggestions
made through the scheme have provided significant benefits to the
organisation.
Suggestions made and implemented during 2003–04 included:
• a number of changes to the PASS computer system to improve efficiency
and usability
• introduction of a Tannoy system to announce customer names in the
London office improved customer service and simplified communication
procedures
• a suggestion to introduce a deaf awareness course for all staff, resulted in
the planned implementation of a workshop for staff on working and dealing
with people with disabilities.
>>
INNOVATION AND DEVELOPMENT
20
21
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MAXIMISING THE USE OFTECHNOLOGY
The UKPS is aware of the need to make
best possible use of technology in
support of its business. It must ensure it
develops systems to support the
growing number of customers that wish
to access services online, as well as
using technology to stay one step ahead
of fraudsters and criminals.
IT Strategy
In support of its vision, the UKPS has
undertaken a substantial review of how
it uses technology to provide customer
services and manage its business. Work
was commissioned to develop a long-
term IT strategy and this has now been
completed. It is clear from the work
carried out that the existing passport
application processing system (PASS)
will need to be progressively replaced
over the next five years to cope with new
demands: a new modular-structured
system is needed to facilitate the scale
of anticipated change in the years
ahead. The way we manage customer
information will also be improved via the
introduction of a person-centric rather
than passport-centric data storage
arrangement.
Person-centric Database
As part of the review of IT within the
UKPS, a feasibility study concluded that
a person-centric database will better
support our fraud prevention activities
and the UKPS’s role in the
Government’s ID card programme. This
will be implemented during 2004–05.
ePassport
The UKPS has been progressing
analysis and development of an
ePassport incorporating an
International Civil Aviation Organization
standard facial biometric. The first
ePassports are expected to be rolled-
out in late 2005/early 2006.
Development of ManagementInformation Systems
Work continued during 2003–04 to
develop a wholly integrated management
information system for the UKPS
management team. The first stage of the
project has been completed with the
launch of a Flexible Reporting System
across all offices. This system provides
up-to-the-minute information on
business performance to management
teams within our regional offices.
Internal IT Systems
During the year, several improvements
were made to the PASS system in
support of new customer service
initiatives, including the lost, stolen and
recovered database and electronic
payment for online applications.
Remote access to enable some staff to
work from home was also introduced
during the year.
‘Congratulations on awell-designed andstructured website.’
Mike Goodwin, Exeter
Biometric Trial
The UKPS is currently undertaking
a biometric trial (with 10,000
volunteers), which is investigating
the options for fingerprinting
and/or iris scanning for use in
future passports.
Photo: Des Browne MP, Minister of State forCitizenship, Immigration and Nationality
‘I have rarely used sucha “user-friendly”website. The forms andprocesses were sosimple.’
Mrs C. McKie, Glasgow
>>
FUTURE PRIORITIES
22
>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Mission:Confirming
nationality andidentity –
enabling travel
Vision:To focus on stronger
identityauthentication for
the purpose ofissuing passports
Strategic objectives Aims
Identity authentication Safeguarding document integrity
Prevent identity fraud
Internal fraud prevention
Responding to customer needs
To ensure that entitled customers are able to travelfreely
To ensure that customers are satisfied with theservice
Unlocking staff potential
To develop a new ‘valued behaviours’ framework
To deliver a quality learning and developmentprogramme to meet individual and business needs
To reform existing performance managementarrangements linked to pay reform
To continue to focus on excellent internalcommunications
To manage attendance and poor performance
Efficiency and business assurance
To be significantly more efficient in everything we do
To establish sound finances to support businesscontinuity and change
To comply with regulatory requirements
Optimising the use of technology Optimising the use of technology
The UKPS recognises that it can only
meet the needs of its stakeholders if it
continues to provide excellence in
customer service while ensuring the
highest integrity of passport application
processes and the security of the
passport document. Future activities
will support both customer service and
fraud prevention and detection. The
UKPS will continue to drive forward
quality improvement and ensure that it
develops staff to their full potential. It
will ensure that it provides not only high
standards of customer service but that
it does so in an effective and efficient
manner making best use of IT.
The Corporate and Business Plan,
published in March 2004, sets out its
strategy for 2004–09. The planned
Integrated Change Programme contains
eight strategic projects supported by a
number of enabling projects. The eight
strategic projects are discussed below.
AUTHENTICATION BYINTERVIEW
As part of its fraud prevention strategy a
feasibility study is being carried out into
whether or not personal attendance
should be required for some or all
customers applying for adult passports
for the first time. Moving to personal
attendance would require a complete
overhaul of existing structures and
consideration is being given to the
potential implications for customers
and the UKPS.
PERSONAL IDENTIFICATIONPROJECT (PIP)
Throughout the year the UKPS trialled
the use of access to private and public
23
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sector databases (with applicant
consent) to assess whether identity
authentication is strengthened, and the
operational implications of this.
A decision will be made by the end of
2004 as to whether to roll-out PIP to all
offices and to integrate it into our
standard processes.
ONS ONLINE
Work has begun on establishing an
electronic link to the Office of National
Statistics (ONS) births, marriages and
deaths database. This link will help
eliminate reliance on paper
documentation, enhance customer
service, and help eliminate some types
of fraud.
LOST, STOLEN ANDRECOVERED (LSR)DATABASE
In late 2003 the UKPS successfully
launched a global lost, stolen and
recovered (LSR) passport database, in
order to combat individuals who apply
for passports using false
documentation, including forged
passports.
The UKPS will be developing usage of
the database with the FCO, the UK
Police Service, IND and internationally
through Interpol.
ePASSPORT
Work is continuing to develop systems
to incorporate biometric information
into passports. The first ePassports with
biometric chips inserted will be rolled-
out in late 2005/early 2006.
FACIAL RECOGNITION
The UKPS is in the process of
developing the use of facial recognition
technology to detect fraudulent
applications. In the first instance we will
be piloting the use of facial recognition
to compare each applicant’s facial
image against our stop-file images of
known fraudsters to complement
current stop-file data checks.
SECOND BIOMETRIC
A trial to determine the most
appropriate biometric for future needs
began in late 2003–04 (continuing into
2004–05), and will involve 10,000
volunteers providing facial, iris pattern
and fingerprint data.
This trial will help inform the UKPS and
partner organisations on implementing,
if appropriate, a second biometric to
passport documents. A second
biometric will help deter and detect
duplicate applications, and strengthen
the link between passport/ID cards and
the individual holder.
PASSPORT CARDS
A passport card is under consideration.
The card would enable travel
throughout the whole of the EU. The
card would also potentially form part of
the Government’s proposed identity
card programme from 2008.
>>
CORPORATE AND SOCIALRESPONSIBILITY
24
>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The UKPS is committed to its
customers, employees, the
environment and, in the wider context,
the community at large. The UKPS
believes that in the long term it must act
in a responsible manner creating
benefits for all of its stakeholders. This
ethos underpins the decision-making
process within the organisation.
Account is taken of external influences
that are likely to impact on our future
business. We also assess the impact
our decisions will have on stakeholders,
developing strategies to minimise
potential difficulties.
ECONOMIC FACTORS
The UKPS is a self-funded Agency,
reliant wholly on the fee income it
generates. We are committed to
managing our resources in a prudent
manner to ensure that increases in fees
are only sought when necessary and
that the level of increase is kept to a
minimum for our customers.
SOCIAL FACTORS
The UKPS has a positive role to play in
the communities in which it operates,
benefiting both customers and
employees. Providing excellence in
customer service is a key priority for the
Service, balancing this against the need
for improved security measures. Our
human resources policies are
structured to attract and retain the best
people to achieve this goal. The UKPS is
committed to:
1. Complying with regulatory
requirements.
2. Providing a safe, secure and healthy
working environment for its
employees.
3. Ensuring managers are committed to
the health and well-being of their
staff.
4. Promoting equality of opportunity for
all. Ensuring that individuals
progress within the organisation by
talent alone.
5. Treating all stakeholders with
courtesy and respect.
6. Communicating openly and honestly
with all stakeholders – both
internally and externally.
7. Regularly reviewing our policies to
ensure we are maintaining our
commitment to our stakeholders.
The UKPS engages it stakeholders
through various media and
communications including staff
newsletters, an intranet, our website,
the staff briefing system, and through
members of the Consultative Panel
(made up of representatives from the
travel industry, Citizens Advice Bureau,
DfES, and the FCO, amongst others).
ENVIRONMENTAL FACTORS
The UKPS is aware of the impact its
operations has on the environment and
is working to reduce this. Our ‘Green’
strategy sets out four key areas on
which we will focus our efforts. These
are:
1. Reducing consumption of natural
resources.
2. Recycling schemes at all locations.
3. Setting Key Performance Indicators
to measure progress.
4. Promoting our strategy to all
employees and seeking their active
involvement in initiatives.
ACCOUNTS AND NOTES
25
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HISTORY ANDBACKGROUND
The United Kingdom Passport Agency
was established as an Executive Agency
of the Home Office on 2 April 1991
under the Government’s Next Steps
initiative.
In March 2001, the Agency was
renamed the Passport and Records
Agency (PRA) to encompass the two
distinct operating arms within the
Agency, the United Kingdom Passport
Service (UKPS) and the Criminal
Records Bureau (CRB). Following a
review of CRB operations and
strategies, the CRB became an
independent Executive Agency of the
Home Office on 1 September 2003 and
the UKPS reverted back to separate
Agency status.
PRINCIPAL ACTIVITIES
The function of the UKPS is to provide
passport services for British nationals
in the UK. Its main objectives are set out
on page 1 of the Annual Report.
Performance against key targets is
described on the inside front cover of
this Annual Report. For the year ended
31 March 2004 the UKPS made a
surplus of £29.1 million, which has
eliminated past deficits accumulated
under agreement with HM Treasury.
BASIS FOR PREPARING THEACCOUNTS
A Treasury Direction requires the UKPS
to produce the accounts to conform with
the accounting principles and
disclosure requirements of the
Resource Accounting Manual (RAM) in
respect of 2003/2004 and future
years, in accordance with section 7(2)
of the Government Resources and
Accounts Act 2000.
The UKPS uses the Companies Act
1985 Schedule 4 format 1.
BUSINESS AND FUTUREDEVELOPMENTS
The UKPS continues to seek and to
deliver improvements in the quality,
value for money and efficiency of the
current service provided to its
customers, in line with the service and
financial targets set by Ministers. At the
same time the UKPS has implemented
a series of change projects over recent
years and is now planning a more
integrated change programme.
Integrated Change Programme(ICP)
The UKPS operating environment is
complex and challenging, playing a key
role in dealing with the challenges of
illegal immigration, identity fraud and
the threat of international terrorism. The
UKPS is also a key participant in the
implementation of the government’s
proposed national identity card
scheme. In order to meet these
challenges a newly defined Integrated
Change Programme (ICP) has been
established and a new Programme
Director appointed to oversee delivery
of the key strategic elements of the ICP:
• Authentication by interview
• Personal Identification Project (PIP)
• Online access to
birth/marriage/death records
• Lost, stolen and recovered passport
database (LSR)
• ePassport
• Facial recognition to detect fraud
• Biometric trial and second biometric
• Passport cards.
Additionally, there are a number of key
enabling projects supporting the
initiatives above.
Delivery of the key elements of the ICP
will achieve the UKPS core strategic
objectives of stronger identity
authentication and greater document
security. Throughout delivery of the ICP,
the UKPS will continue to ensure
members of the public continue to
receive their passports on time and
correctly issued, with progressive
strengthening of anti-fraud measures.
More detail on the ICP is contained on
pages 22 to 23 of the Annual Report.
Fixed Assets
During the year, the UKPS made
significant capital investment in three
major areas, Liverpool office relocation,
development of a new electronic
passport application system and a lost,
stolen and recovered passport
database. More information on fixed
assets is included within note 9 to these
accounts.
FOREWORD TO THE ACCOUNTS
26
>>>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Management Information
Business process maps for our key
processes have been delivered during
the year and will be a key management
tool in delivering improved consistency,
quality and efficiency across all offices.
Work on delivering an Enterprise Data
Warehouse (EDW) has begun with
planned delivery during 2005. This will
facilitate far more flexible reporting
arrangements and access to
information throughout UKPS,
integrating data from the operations,
finance and human resource systems. A
project to deliver a new finance and
procurement system is underway to
support e-commerce, enhanced
financial analysis and cost modelling. A
comprehensive IT strategy was
developed during the year and further
detail on this is included on page 21 of
the Annual Report.
Net Regime
The UKPS continues to operate under a
net regime for resource expenditure.
Capital expenditure is funded by the
Home Office. All receipts are paid into a
UKPS account held with the Office of
the Paymaster General. The UKPS then
Appropriate in Aid from this account
sufficient receipts to cover expenditure,
including consular services overseas
provided by the Foreign and
Commonwealth Office, and then pay the
surplus to Home Office as Consolidated
Fund Extra Receipts (CFERs). We will
continue to review whether there is a
business case for the UKPS to progress
to Trading Fund status in the future.
Outsourcing
Contracts were awarded in July 1997 to
Siemens Business Services (SBS) and
the security printing division of The
Stationery Office in Manchester (now
Security Printing and Systems Ltd –
SPSL).
In 2003 the UKPS reached the mid
point of these contracts and a review, as
required by the contracts, took place.
This resulted in small unit price
increases for both SBS and SPSL,
consistent with the terms of the original
contracts.
In addition to the operational service
charges levied by SBS, we have also
invested during the year in developing
improvements to the Passport
Application Support System (PASS) to
facilitate future services such as
Electronic Passport Applications (EPA)
and the introduction of some key anti-
fraud initiatives.
Fee Increase
On 2 October 2003 the UKPS
introduced higher fees for all our
services to facilitate the introduction of
the ICP improvements to our systems,
whilst maintaining the integrity of the
British passport through improved
arrangements to tackle fraud. This
increase allows the UKPS to continue to
provide a consistently high quality
service to our customers within an
increasingly secure environment and
makes provision for significant past
deficit recovery (to be fully recovered by
October 2004 as agreed with HM
Treasury), increased FCO consular
protection costs (see below) and an
inflationary element.
There is an element within the passport
fee for consular protection costs
overseas – effectively an insurance
premium. The element of this FCO
premium within the services (post and
pre fee increase shown respectively)
are:
• Adult passports £9.65 (£9.40)
• Child passports £2.41 (£2.35)
• Jumbo passports £14.49 (£14.10).
The UKPS turnover is shown gross of the
total amount £40.7 million of this
premium in the Income and Expenditure
account.
Identity Issues
The UKPS continues to strive to ensure
the British passport remains amongst
the most secure worldwide and
continues to improve security. In order
to improve fraud prevention and
detection, a number of significant
projects were delivered during the year,
including creating specialist fraud and
intelligence units in all offices, the
launch of a global passport database
(Omnibase), improved arrangements for
reporting, recording and sharing
information on lost, stolen and
recovered (LSR) passports and the
introduction of secure delivery of all
passports nationwide in partnership
with Special Mail Services (SMS).
Following the Home Secretary’s
announcement on identity cards on 11
November 2003, the UKPS is
committed to playing a key role in the
delivery of the national identity card
scheme. The implication of this
announcement is that the UKPS will be
responsible for, or active in, a
programme of key projects to enable
the delivery of a national ID card. The ID
card programme is being managed by
the Home Office ID Card Programme
Board on which the UKPS is
represented. Draft legislation was
submitted to Parliament on 26 April
2004 and is now subject to a period of
public consultation with the intention
then to formally legislate in the
Parliamentary session beginning in the
autumn 2004. Note 23, post balance
sheet events, provides more detail on
the launch of a biometric trial to capture
facial, iris and fingerprint details of
10,000 volunteers. This trial was
launched in April 2004 and aims to test
the technology for biometric capture.
More detail on this subject is contained
on page 21 of the Annual Report and in
Home Office publications.
Corporate Governance
These accounts incorporate a
statement on the UKPS system of
internal controls. It is in line with the
requirements of the Turnbull report on
Corporate Governance as set out in
Chapter 21 of Government Accounting
2000.
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The content of the statement is
supported by the work carried out by the
UKPS internal audit service, the
contract for which was awarded to
PricewaterhouseCoopers in 2003, and
by external audit, as well as other
reviews that cover internal financial
control of the UKPS. The UKPS Audit
Committee meets quarterly to oversee
all audit work carried out and is
supported by business assurance
committees that also meet quarterly.
The system of internal control is based
on an ongoing process designed to
identify the principal risks to the
achievement of the UKPS’s plans,
policies and objectives, to evaluate the
nature and extent of those risks and to
manage them efficiently, effectively and
economically. In order to strengthen
UKPS corporate governance, the
functions of risk and business
assurance were merged to form the
Risk and Assurance Team.
The Comptroller and Auditor General is
the external auditor of the UKPS
supported by the National Audit Office
and is appointed under statute,
reporting to Parliament. For the
statutory audit carried out on this
Annual Report and Accounts, the UKPS
paid a notional fee to the NAO of £137k.
In order to further strengthen the UKPS
governance arrangements, a third Non
Executive Director was appointed to the
Management Board providing further
external challenge and wide experience
beyond the UKPS. Further Executive
Directors have been appointed to
strengthen the Agency in the Strategic
Planning, Commercial, Marketing and
Communication, Programme
Management and Identity Project areas.
Full details of the Board and Directors
are included in Annex (a) of the Annual
Report.
Pension Scheme
Comprehensive details of the various
pension schemes available to UKPS
employees are contained within notes 6
and 14 to these accounts.
Efficiency Strategy
An Efficiency Board has been
established to develop and oversee
delivery of the UKPS efficiency strategy,
established in line with both the
increasing government focus on
efficiency and the strong internal driver
of needing to limit the impact of the ICP
on the passport fee. The strategy
includes a focus on process re-
engineering and greater automation as
well as driving forward shorter-term
productivity improvement through
improved management and
management information.
Resource Accounting andBudgeting
The Home Office is preparing resource
accounts for 2003/2004 which will
consolidate the UKPS accounts. The
UKPS provides accounting data to the
Home Office on a monthly basis.
Consistency of accounting policies and
treatment has been assisted by the
requirement on both parties to prepare
accounts in accordance with the RAM.
Euro
The UKPS is keeping closely in touch
with developments on the Euro and is
taking steps to ensure that its financial
and operational systems can be flexibly
adapted to facilitate the Euro as and
when required.
Liverpool Relocation
During the year the UKPS made
significant progress in the construction of
new accommodation for the Liverpool
office in the city centre. Building work is
complete with fit-out well underway. The
new building is planned to be open in
October 2004 and will provide better
quality and more modern and flexible
accommodation for staff and customers.
Call Centre
The UKPS continued to develop its
contact centre service during the year to
help deal with the large volume of
enquiries from the public, which
exceeded three million calls during
2003/2004. Changes will be introduced
to make the PASS system available to the
call centre to enhance the service to
customers enquiring on progress of
applications. This service is anticipated to
be fully operational by September 2004.
PAYMENT PERFORMANCE
The UKPS’s payment performance is
outlined on the inside cover of the
Annual Report.
RESEARCH ANDDEVELOPMENT
The UKPS has continued to undertake
research into the factors influencing the
volume and pattern of demand for
passports. The UKPS continues to
implement improvements to the
passport issuing process through the
use of digital and biometric technology.
All these costs are charged to the
Income and Expenditure Account.
MANAGEMENT BOARD
The names, positions and brief
personal details of the Management
Board are as set out in Annex (a) of the
Annual Report. The Chief Executive is a
permanent member of staff appointed
by the Home Office under Senior Civil
Service terms. Executive Directors’
remuneration is within the UKPS agreed
pay scales adjusted by the
Remuneration Committee where
appropriate to effect reasonable
comparison with similar roles within the
Civil Service. Full details on
remuneration of the Management
Board are contained within note 6 to
these accounts.
>>
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>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
UNLOCKING STAFFPOTENTIAL
Full details of the UKPS’s staff
initiatives, including the development
and launch of a set of corporate valued
behaviours, are set out on pages 17 to
19 of the Annual Report.
DIVERSITY
The UKPS is committed to diversity and
opportunity. Our main objective is to
promote and develop diversity
initiatives within the organisation, with a
view to matching and, if possible,
improving on best practice within the
Civil Service.
Since developing our Equal
Opportunities Policy, the UKPS has
undertaken a number of equal
opportunities initiatives. The
organisation has concentrated on
ensuring the equal treatment of groups
disadvantaged in employment. As a
consequence, the UKPS has developed
an anti-harassment and workplace
bullying policy, family-friendly initiatives
such as the provision of childcare
vouchers, part-time and job-share
opportunities, and taking part in the
Guaranteed Interview Scheme. Special
efforts are being made to encourage job
applications and applications for
promotion from black and ethnic
minorities, with the intention of
ensuring staff from minority groups
reach their true potential and all offices
fully reflect their local communities. The
UKPS has also developed a diversity
strategy designed to promote social
inclusiveness within the UKPS.
During the year the UKPS made no
charitable donations.
EMPLOYMENT OFDISABLED PEOPLE
The UKPS employs 167 disabled staff
(6.9% of total average number of staff)
and there is an Equality Manager who is
responsible for overseeing
implementation of the policy.
HEALTH AND SAFETY
The UKPS is committed to maintaining
the standards required by the Health
and Safety at Work Act 1974, and other
United Kingdom and European
regulations relating to the health and
safety of its employees and the public.
Resources have been strengthened in
this area and the UKPS will continue to
raise staff awareness on all aspects of
Health and Safety. A healthcare
screening and a flu vaccination
programme exists for all UKPS staff.
PARTNERSHIP AGREEMENTWITH THE TRADE UNION
The UKPS will continue to work closely
with colleagues in the Public and
Commercial Services Union (PCS),
building on the partnership agreement
signed in 2002.
INFORMATIONTECHNOLOGY
Full details covering the UKPS’s IT
systems and website services are
included on page 21 of the Annual
Report.
Bernard Herdan
Chief Executive
18 June 2004
>>
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>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ANNUAL STATEMENT ON INTERNAL CONTROL
1 Scope of responsibility
As Accounting Officer, I have
responsibility for maintaining a sound
system of internal control that supports
the achievement of the United Kingdom
Passport Service’s (UKPS) policies,
aims and objectives, whilst
safeguarding the public funds and
departmental assets for which I am
responsible, in accordance with the
responsibilities assigned to me in
Government Accounting.
The UKPS is an Executive Agency of the
Home Office. As Accounting Officer I am
fully accountable for the running,
management, performance and future
development of the UKPS.
2 The purpose of the system ofinternal control
The system of internal control is
designed to manage risk to a
reasonable level, rather than to
eliminate all risk of failure to achieve
policies, aims and objectives; it can
therefore only provide reasonable and
not absolute assurance of
effectiveness. The system of internal
control is based on an ongoing process
designed to identify and prioritise the
risks to the achievement of the UKPS’s
policies, aims and objectives, to
evaluate the likelihood of those risks
being realised, and their impact should
they be realised, and to manage them
efficiently, effectively and economically.
The system of internal control has been
in place in the UKPS for the year ended
31 March 2004 and up to the date of
approval of the Annual Report and
Accounts, and accords with HM
Treasury guidance.
3 Capacity to handle risk
A central component of the way in which
the UKPS gives leadership and direction
to the risk management process is the
risk management strategy that I have
endorsed through the Board and Audit
Committee. This strategy reflects
appropriate elements of the Home
Office risk management strategy and is
subject to regular review.
Further leadership is given to the risk
management process by the UKPS
Management Board, supported by a
Risk Assurance Group, which maintains
a strategic risk register reviewed by
representatives from all directorates.
Managers are accountable for the
management and mitigation of risks
within their area of responsibility.
Guidance in risk management is given to
staff by risk management framework
and guidance documents. We seek to
learn from best practice by taking an
active part in the Home Office Risk
Improvement Forum and by individual
benchmarking with other government
departments and agencies. The UKPS
Risk Assurance function takes a lead in
the identification and dissemination of
best practice.
As part of the UKPS risk management
strategy, my Head of Risk and Assurance
undertakes risk review workshops, one
to one interviews, round table
discussions and seminars as part of the
plan to ensure that awareness is raised
and that staff are trained to manage risk
in a way appropriate to their
accountabilities and responsibilities,
goals and objectives. This activity has
taken place in the UKPS throughout
2003/2004 and will continue, to ensure
that these processes are fully applied in
all areas of the business.
A revised risk management strategy
document was produced in November
2003, as part of a process of
continuous improvement. In addition, a
series of functional and senior
management risk and assurance
workshops have been undertaken. I
consider that this moves action forward
to continue to develop an embedded
risk and assurance management
culture throughout the organisation.
4 The risk and control framework
The Board has adopted a risk
management strategy. Risk appetite is
determined by the Board in the
prioritisation of objectives within the
corporate planning process.
The UKPS has established the following
processes to identify, evaluate and
control risk:
• A Management Board that meets
monthly, with a standing item
relating to significant risk and
assurance issues.
• An Audit Committee that meets on a
quarterly basis, chaired by a Non
Executive Director, and including the
Chief Executive and the two other
Non Executive Directors.
• Regular reports by internal audit, to
GIAS standards, which include
recommendations for improvement.
The UKPS internal audit services are
provided on an outsourced basis.
• Individual risk registers, which will be
integrated during 2004/2005 to
incorporate regional office,
directorate and corporate risks into a
single database. During the current
year the most significant risks
identified have been summarised in
a strategic risk register for
31
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
consideration by the UKPS
Management Board.
• A Risk Assurance Group which meets
on a monthly basis to review UKPS
risk management, business
assurance and business continuity
arrangements. This is a sub group to
the Management Board, with a
dotted line to the Audit Committee,
reporting on an exception basis
where there are significant areas of
risk.
• A self-assessment process of Internal
Certificates of Assurance, carried out
by UKPS senior managers, which is
used to inform internal letters of
assurance. The whole framework for
these certificates, including
supporting documentation, will be
developed in 2004/2005.
• Internal compliance reviews in other
key areas of risk, including policy, the
PASS passport processing system,
HR and finance systems.
• Given the nature of the UKPS’s
business, I also have a separate
Security Team, with a Head of
Security reporting to the Director of
Operations who is responsible for
informing the Management Board
and Audit Committee on all matters
of passport security. Internal control
in this respect is also exercised by a
developing system of checks
designed to mitigate the risks of
passport fraud.
• Business continuity plans to manage
the risks of loss of key premises and
processes.
• Strengthening of the strategic
planning, programme and
commercial function.
• A third Non Executive Director, who
was previously a member of the
Advisory Board, has been appointed
in the course of the financial year.
• Significant investment in the year has
been put into developing business
process maps for a number of key
processes, with the scope of this
activity being widened to encompass
all processes going forward. These
are supporting the identification of
‘one best way processes’ for the
business that is helping to drive
consistency of application in areas
such as case noting of decisions on
passport entitlement and Main Index
updating. As such it is helping the
UKPS to deal with a long-standing
issue in a very positive way.
Risk priorities in the year have been:
• Maintenance of high levels of
operational performance against
record demand levels.
• Development of the capability to
deliver a significant integrated
change programme. A Programme
Office has been established to
oversee the UKPS Integrated Change
Programme, and to implement best
practice for project and programme
management. An experienced
Programme Director was appointed
towards the end of the financial year
to direct this work. The UKPS Change
Programme is overseen by the
Integrated Change Programme
Board, which meets on a monthly
basis.
• Counter fraud activity.
• Involvement in the ID card
programme.
5 Review of effectiveness
As Accounting Officer, I have
responsibility for reviewing the
effectiveness of the system of internal
control. My review of the effectiveness of
the system of internal control is informed
by the work of the internal auditors and
the executive managers within UKPS
who have responsibility for the
development and maintenance of the
internal control framework, and
comments made by the external
auditors in their management letter and
other reports.
In addition to the monthly review of
significant corporate risks, the UKPS
Management Board has included on its
agenda an annual review of strategic
risk management. The Audit Committee
meets quarterly and oversees the
system of internal control, receiving
reports from the UKPS internal auditors,
and NAO, as external auditors. My
directors provide me with annual
certificates giving me assurance on the
systems of internal control for which they
are individually responsible, identifying
any control weaknesses, together with
their plans to address these.
My Head of Risk and Assurance acts as
Risk Improvement Manager, reporting
to my Director of Finance, and is
responsible for developing and
improving the UKPS risk management
capability. We will review the UKPS risk
management capability and
effectiveness in the forthcoming year,
using the HM Treasury Risk Assessment
framework.
Assurance activities are further
informed by, facilitated and supported
by the Risk Assurance Group, which
meets on a monthly basis to address
the key elements of Risk Management,
Business Assurance and Business
Continuity. A plan to address
weaknesses and ensure continuous
improvement of the system is in place.
A risk-based approach to internal audit
activity has been followed in the current
financial year, with a supporting
programme of activity, which is
approved by the Audit Committee.
Internal audit comment relevant to the
Statement on Internal Control is as
follows:
‘Our work revealed significant
weaknesses in the procurement and
payroll systems, which led to our
concluding that the controls over these
systems were operating inadequately.
Management has put action plans in
place to seek to address these issues.
Our audit work in other areas did not
indicate that these weaknesses were
systematic across the risk
management, governance
arrangements or controls within UKPS.
Consequently, other than procurement
and payroll, our work has demonstrated
>>
32
>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
that, overall, controls reviewed were
adequate but there is further scope to
improve the risk management,
governance and internal control
processes in line with emerging best
practice’.
6 Significant internal controlissues
The UKPS is operating in an
environment of significant change, both
in respect of normal operations as a
result of major increases in demand,
and also in respect of developments in
its methods of operation to meet new
technological and fraud prevention
objectives. This presents a number of
challenges, which the UKPS is
endeavouring to meet in part by
ensuring that it has the right skills and
resources in place. This action is
progressive, particularly in the
programme office to ensure effective
delivery of the UKPS Integrated Change
Programme.
A wide range of challenging business
and financial targets and tasks have
been achieved in the year and the UKPS
is starting to drive forward and deliver
significant outcomes in terms of its
developing identity verification and
fraud prevention agenda.
Management believed that aspects of
control in the areas of procurement and
payroll services were weak, from the
perspective of inefficient processes and
not due to any suspicion of fraud. These
areas were therefore tested and the
results corroborated by Internal Audit,
and their detailed findings have
enabled robust action plans to be
developed and driven forward.
The Agency’s Programme function was
embryonic, whilst developing at a fast
rate, during the financial year. Some
high level assurance has been achieved
on Programme controls during
2003/2004 from OGC Gateway and
Home Office reviews and more detailed
audit and assurance arrangements are
being developed to ensure that key
Programme controls are in place and
operating consistently.
Actions are also being driven forward,
aided by findings from an internal audit
review, to strengthen blank passport
book stock management processes, as
a key control over document security.
The UKPS has already more closely
aligned its risk and assurance functions
and will strive to make a bigger impact
in these areas with a stronger risk and
assurance focus in all areas of the
business and closer planning,
resourcing and management against
key risks. This will focus on
improvements in self assurance and
risk management processes, supported
by a training programme based on a
new risk tool to be implemented in the
early part of 2004/2005 financial year.
My review of the effectiveness of the
system of internal control is informed by
the work of the internal auditors and the
executive managers within the UKPS
who have responsibility for the
development and maintenance of the
internal control framework, and
comments made by the external
auditors in their management letter and
other reports. I have been advised on
the implications of the results of my
review of the effectiveness of the
system of internal control by the
Management Board, the Audit
Committee, the Risk Assurance Group
and a plan to address weaknesses and
ensure continuous improvement of the
system is in place.
Bernard Herdan
Chief Executive
18 June 2004
33
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
UNITED KINGDOM PASSPORT SERVICETHE CERTIFICATE AND REPORT OF THE COMPTROLLERAND AUDITOR GENERAL TO THE HOUSE OF COMMONS
I certify that I have audited the financialstatements on pages 34 to 51 under theGovernment Resources and AccountsAct 2000. These financial statementshave been prepared under the historicalcost convention as modified by therevaluation of certain fixed assets andthe accounting policies set out on pages37 and 38.
RESPECTIVERESPONSIBILITIES OF THEAGENCY, THE CHIEFEXECUTIVE AND AUDITOR
As described on page 29, the UKPS andChief Executive are responsible for thepreparation of the financial statements inaccordance with the GovernmentResources and Accounts Act 2000 andTreasury directions made thereunder andfor ensuring the regularity of financialtransactions. The Agency and ChiefExecutive are also responsible for thepreparation of the other contents of theAnnual Report. My responsibilities, asindependent auditor, are established bystatute and I have regard to the standardsand guidance issued by the AuditingPractices Board and the ethical guidanceapplicable to the auditing profession.
I report my opinion as to whether thefinancial statements give a true and fairview and are properly prepared inaccordance with the GovernmentResources and Accounts Act 2000 andTreasury directions made thereunder,and whether in all material respects theexpenditure and income have beenapplied to the purposes intended byParliament and the financial transactionsconform to the authorities which governthem. I also report if, in my opinion, theForeword is not consistent with thefinancial statements, if the Agency hasnot kept proper accounting records, or if I
have not received all the information andexplanations I require for my audit.
I read the other information contained inthe Annual Report and consider whetherit is consistent with the audited financialstatements. I consider the implicationsfor my certificate if I become aware of anyapparent misstatements or materialinconsistencies with the financialstatements.
I review whether the statement on pages30 to 32 reflects the Agency’s compliancewith Treasury’s guidance on theStatement on Internal Control. I report if itdoes not meet the requirements specifiedby Treasury, or if the statement ismisleading or inconsistent with otherinformation I am aware of from my auditof the financial statements. I am notrequired to consider, nor have Iconsidered whether the AccountingOfficer’s Statement on Internal Controlcovers all risks and controls. I am also notrequired to form an opinion on theeffectiveness of the Agency’s corporategovernance procedures or its risk andcontrol procedures.
BASIS OF AUDIT OPINION
I conducted my audit in accordance withUnited Kingdom Auditing Standardsissued by the Auditing Practices Board. Anaudit includes examination, on a testbasis, of evidence relevant to theamounts, disclosures and regularity offinancial transactions included in thefinancial statements. It also includes anassessment of the significant estimatesand judgements made by the Agency andChief Executive in the preparation of thefinancial statements, and of whether theaccounting policies are appropriate to theAgency’s circumstances, consistentlyapplied and adequately disclosed.
I planned and performed my audit so asto obtain all the information andexplanations which I considerednecessary in order to provide me withsufficient evidence to give reasonableassurance that the financial statementsare free from material misstatement,whether caused by error, or by fraud orother irregularity and that, in all materialrespects, the expenditure and incomehave been applied to the purposesintended by Parliament and [the financialtransactions] conform to the authoritieswhich govern them. In forming my opinionI have also evaluated the overalladequacy of the presentation ofinformation in the financial statements.
OPINION
In my opinion:
• The financial statements give a trueand fair view of the state of affairs ofthe United Kingdom Passport Serviceat 31 March 2004 and of the surplus,total recognised gains and losses andcash flows for the year then ended andhave been properly prepared inaccordance with the GovernmentResources and Accounts Act 2000and directions made thereunder byTreasury; and
• In all material respects theexpenditure and income have beenapplied to the purposes intended byParliament and the financialtransactions conform to theauthorities which govern them.
I have no observations to make onthese financial statements.
John Bourn Comptroller and Auditor General National Audit Office 157–197 Buckingham Palace Road Victoria London SW1W 9SP29 June 2004
>
>>
34
>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2004
UNITED KINGDOM PASSPORT SERVICE INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2004
NOTES 2003/2004 2002/2003
£000 £000
Turnover from continuing activities 2 197,541 152,971
Cost of sales 3 (82,344) (78,412)
Gross surplus 115,197 74,559
Distribution costs 4 (5,538) (3,133)
Administrative expenses 5 (41,649) (36,081)
(47,187) (39,214)
68,010 35,345
Other operating income 1.10 2,853 3,272
Operating surplus 1.8, 7 70,863 38,617
Loss on disposal of fixed assets (33) (12)
Cost of capital 8 (1,050) (1,387)
Surplus on ordinary activities 69,780 37,218
Non-retainable element of the passport fee
for consular protection 21 (40,650) (33,539)
Surplus /(deficit) after deducting non-retainable
element of the passport fee 29,130 3,679
STATEMENT OF RECOGNISED GAINS & LOSSES FOR THE YEAR ENDED 31 MARCH 2004
2003/2004 2002/2003
£000 £000
Surplus on ordinary activities 69,780 37,218
Unrealised surplus on the revaluation of assets 441 587
Gains recognised for the year 70,221 37,805
35
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
UNITED KINGDOM PASSPORT SERVICEBALANCE SHEET AS AT 31 MARCH 2004
2003/2004 2002/2003
NOTES £000 £000 £000
Fixed assets
Tangible assets 9 31,637 24,546
Current assets
Stocks 3,734 4,353
Work in progress 396 487
Debtors 10 10,981 15,759
Cash at bank and in hand 16 41,597 30,698
56,708 51,297
Creditors
Amounts falling due within one year 11a (67,696) (41,461)
Bank overdraft 16 (2,241) (1,605)
(69,937) (43,066)
Net current assets/(liabilities) (13,229) 8,231
Total assets less current liabilities 18,408 32,777
Creditors Amounts falling due after more
than one year 11b (3,400) (3,800)
Provisions for liabilities and charges 12 (548) (119)
14,460 28,858
Taxpayer's equity
General fund 13a 12,981 27,784
Revaluation reserve 13b 1,479 1,074
14,460 28,858
Bernard Herdan
Chief Executive
18 June 2004
The notes on pages 37 to 51 form part of these accounts.
36
>>>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
UNITED KINGDOM PASSPORT SERVICECASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2004
NOTES 2003/2004 2002/2003
£000 £000
Net cash inflow from operating activities 87,850 73,148
Capital expenditure and financial investment (11,048) (8,371)
Net cash flow from financing (66,539) (40,217)
Increase in cash in the year 16 10,263 24,560
Reconciliation of operating cost to operating cash inflows
Net operating surplus 70,863 38,617
Adjust for non cash transactions 15a 4,845 48,344
Adjust for movements in working capital other than cash 15b 12,453 (5,309)
Adjust for VAT payments made 15c (10,322) (11,054)
Adjust for VAT receipts 10,011 2,550
Net cash inflow from operating activities 87,850 73,148
Analysis of capital expenditure and financial investment
Purchase of fixed assets 9 (11,048) (8,394)
Proceeds from fixed asset disposal - 23
Net cash outflow from investment activities (11,048) (8,371)
Analysis of financing
Cash funding from Home Office to General Trading account * - 44,415
Cash collected and paid over to Home Office 21 (66,539) (84,632)
Net cash funding to Home Office (66,539) (40,217)
*Cash movements prior to the transfer of ownership of the PGO account from the Home Office, October 2002
37
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NOTES TO THE ACCOUNTSFor the year ended 31 March 2004
1 Accounting policies
The accounts are prepared using the
historic cost convention modified by the
inclusion of fixed assets at current cost.
Without limiting the information given,
the accounts meet the accounting and
disclosure requirements of the
Resource Accounting Manual (RAM),
the Companies Act 1985 and the
accounting standards issued or
adopted by the Accounting Standards
Board so far as these requirements are
relevant.
1.1 Tangible fixed assets
(a) Motor vehicles
The motor vehicle used to transport
internal post around London is
capitalised and will be written off over 5
years.
(b) Furniture and fittings
New furniture and fittings to facilitate
the operation of Passport Application
Support System (PASS) are capitalised
and written off over 10 years.
(c) Refurbishment
All refurbishment work in regional
offices is capitalised over the length of
the lease agreements.
(d) Telecoms
All telecommunications equipment
such as video conference equipment
and PBX with a value over £750 is
capitalised and written off over 5 years.
e) Electrical equipment
All electrical equipment such as
computers and printers with a value
over £750 is capitalised and written off
over 5 years.
f) IT development
Projects, which involve IT development
expenditure, are capitalised when
incurred on projects that will improve
our services to the public. The
expenditure is capitalised as a tangible
asset and is depreciated over the
expected useful life of the benefits
envisaged, limited to a maximum of 5
years. There is no de minimus level set
for capitalisation of IT development
costs.
g) Assets under construction
All tangible assets being developed and
not in operation at year end are
capitalised as an asset under
construction. No depreciation is
recognised until these assets are
brought into use.
h) Revaluation
The UKPS is required to disclose fixed
assets in the balance sheet at current
cost. The UKPS’s policy is to revalue by
applying appropriate indices compiled
by the Office of National Statistics to
each class of asset (excluding IT
development).
i) Depreciation
A full year’s depreciation is provided on
all tangible fixed assets in the year of
acquisition at rates calculated to write
off the cost or valuation of each asset
evenly over its expected useful life as
follows:
Motor vehicles 5 years
Furniture and fittings 10 years
Refurbishment over the
period of the
lease
Telecoms 5 years
Electrical equipment 5 years
IT development 5 years
j) Research
All research expenditure is written off as
incurred.
Expenditure on development in
connection with a product or service,
which is to be supplied on a full cost
recovery basis, is capitalised if it meets
the criteria specified in SSAP 13. Other
development expenditure is capitalised
if it meets the criteria specified in the
RAM which are adapted from SSAP 13
to take account of the not-for-profit
context.
Expenditure, which does not meet the
criteria for capitalisation, is treated as
an operating cost in the year in which it
is incurred. Fixed assets acquired for
use in research and development are
depreciated over the life of the
associated project, or according to the
asset category if the asset is to be used
for subsequent production work.
k) Capitalisation
The minimum level for capitalisation of
tangible fixed assets (excluding
furniture and fittings and IT
development) is £750 per item.
Costs associated with the Public Private
Partnership contracts are not
capitalised in the UKPS’s Balance Sheet
in line with all relevant guidance.
1.2 Operating leases
Rental payments for land and buildings
occupied by the UKPS on the basis of
operating leases are charged to the
Income and Expenditure Account on a
straight line basis over the lease term.
Lease incentive income received is
deferred over the term of the lease on a
straight line basis. This accounting
treatment is in line with Urgent Issue
Task Force 28.
1.3 Stocks
Stocks are valued at the lower of current
replacement cost and net realisable
value and comprise of new digital
passport blanks (including the
contingency stock) and image transfer
sheets.
Because of uncertainty at this time
regarding the Biometrics Project,
contingency stock of standard blank
passports held at the Bank of England
are valued at cost.
1.4 Work in progress
Work in Progress (WIP) is valued using
three elements:
• the number of applications which
have been passed for issue by the
38
>>>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
UKPS but not printed by Security
Printing and Systems Ltd (SPSL) are
valued at the Siemens unit charge to
reflect the UKPS’s liability to
Siemens for this work.
• the above number of applications
are also valued at average UKPS
direct labour cost in March 2004 at
each office.
• the number of applications which
have not been completed by the
UKPS’s examiners are valued at an
appropriate proportion of the
average direct labour cost in March
2004.
Work in progress in Siemens is not
deemed to be owned by the UKPS and is
therefore excluded from UKPS WIP
count as no liability for these
applications has been incurred by the
UKPS at this stage.
1.5 Non-cash costs
In accordance with the Resource
Accounting Manual a non cash cost at
the appropriate rate is included for
Interest on Capital. Amounts are also
included for central Home Office costs
for Payroll, Accounts Branch and for
National Audit Office audit fees.
1.6 Turnover from continuingactivities
Turnover from continuing activities
represents the sale value of all services
provided during the year.
All income is deferred until the passport
is issued.
1.7 Funding
The UKPS is funded on a net resource
basis from Home Office Request for
Resources 1 – subhead g.
1.8 Surplus
The surplus of income over expenditure
generated by the UKPS is intended to
meet the cost of passport and non-fee
bearing consular services overseas
provided by the Foreign and
Commonwealth Office (FCO). This non-
retainable element of the passport fee
for consular protection is paid to the
Treasury via the Home Office. Any
surplus remaining after the FCO
contribution has been surrendered to
the Consolidated Fund, is paid via the
Home Office on a cash basis.
1.9 Pension costs
The UKPS participates in the Principal
Civil Service Pension Scheme. This is a
statutory defined benefit scheme. The
UKPS is required to pay an employer’s
contribution, which is currently between
11% and 18.5% of pensionable pay
depending on the grade of staff.
These contributions are charged to
operating expenses as and when they
become due.
In accordance with the Resource
Accounting Manual, the costs of
employees retiring under the approved
early retirement scheme are charged in
full to the Income and Expenditure
Account in the year of departure. For
those retiring under the 80:20 scheme,
a provision is made for the future
liability relating to the proportion of the
costs to be met by the UKPS. The
balance is credited to the General Fund.
As the provision is utilised it is credited
to the General Fund.
1.10 Other operating income
Other operating income represents
miscellaneous receipts including wider
market income and Invest to Save
funding.
1.11 Public Private PartnershipContracts
The UKPS has accounted for Public
Private Partnership in accordance with
the Treasury Taskforce Guidance
Technical Note 1 Revised ‘How to
account for PFI transactions’.
39
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
2 Turnover from continuing activities
2003/2004 2002/2003
£000 £000
Standard Passport Services 197,541 152,971
197,541 152,971
All activities are governed by the Consular Fees Act 1980 and so far as segmental reporting requirements are concerned are
considered to be one single class of business.
3 Cost of sales
2003/2004 2002/2003
£000 £000
Labour costs 32,884 32,790
Bank charges 276 201
PIMIS maintenance* – 173
Passport stationery 1,004 787
Application forms 1,938 1,446
Outsourcing service charges** 41,672 38,947
Telecommunication charges, including call centre charges 4,570 4,068
82,344 78,412
* Final PIMIS maintenance obligation in 2002/2003: PASS roll-out fully implemented.** Outsourcing service charges include payments to Siemens Business Services for initial receipt, cashiering and data capturing of applications and to Security
Printing and Systems Ltd for manufacturing, personalisation and issue of digital passports. A budget of £3.8m has been agreed with Siemens BusinessServices for technical refreshment which will be ongoing throughout the remaining term of the contract.
4 Distribution costs
2003/2004 2002/2003
£000 £000
Postal charges 2,369 2,450
Secure Delivery * 2,682 –
Application form distribution 487 683
5,538 3,133
* The Secure Delivery programme was implemented in February 2004.
40
>>>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
6 Staff costsa The total remuneration for the year of the Chief Executive, the highest paid member of the Management
Board was:
2003/2004 2002/2003
£ £
Mr Bernard Herdan 153,601 151,667
153,601 151,667
The Chief Executive's pay is covered by the Senior Civil Service pay arrangements and he is an ordinary member of the Civil
Service Pension Scheme (see note 14). Mr Herdan's remuneration includes an allowance for home to office travel as per his
contract.
5 Administrative expenditure
2003/2004 2002/2003
£000 £000
Staff 17,070 14,597
Accommodation 7,227 6,377
Other costs 6,737 5,609
IT running costs 3,372 2,966
Telecoms charges 904 1,127
Publications, stationery and printing 1,544 1,651
Depreciation 4,163 2,977
Diminution in assets 201 251
Non cash costs
HO Payroll and Accounts Branch 294 316
External audit Fees 137 137
Internal audit Fees* – 73
431 526
41,649 36,081
* The UKPS internal audit function is now carried out by PricewaterhouseCoopers and is no longer a non cash item. The costs are now reflected in the 'Other costs'section of this note.
41
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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42
>>>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
c Total staff costs were:
2003/2004 2002/2003
£000 £000
Salaries 40,540 38,415
Earnings related National Insurance 2,500 2,087
Superannuation (note 14) 4,866 4,646
Travel and subsistence 2,048 2,239
49,954 47,387
These costs have been included in the Income & Expenditure Account as follows:
2003/2004 2002/2003
£000 £000
Cost of sales (note 3) 32,884 32,790
Administrative expenses (note 5) 17,070 14,597
49,954 47,387
d The average number of employees on the Agency payroll during the period, including seasonal staff, was:
2003/2004 2002/2003
Number Number
Management 626 570
Administration 269 272
Production 1,524 1,542
2,419 2,384
43
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
7 Operating surplus
2003/2004 2002/2003
£000 £000
The surplus for the period is shown after charging:
Hire of Plant & Machinery 380 386
Bad debts 17 446
Depreciation 4,163 2,977
External audit fees* 137 137
Internal audit fees* 139 73
* The auditors have received no remuneration for non audit work.
8 Interest on capital
2003/2004 2002/2003
£000 £000
A notional interest on capital charge is made, calculated in accordance
with the Treasury guidelines at a rate of 3.5% (2002/2003: 6%)
Cost of capital 1,050 1,387
e Remuneration of the Non Executive Directors
Under the new UKPS Governance arrangements the Advisory Board was disbanded in January 2003. There are now
three Non Executive Directors: Jim Michie, John Holden and Linda Walton. During 2003/2004 Jim Michie received
£28,986 for his services as a member of the UKPS Management Board and as the Chair of the UKPS Audit Committee
(2002/2003: £17,500 relating to 2002/2003 plus an additional payment of £5,000, relating to 2001/2002). John
Holden, a Non Executive Director, received £14,097 for his services as a member of the UKPS Management Board and
UKPS Audit Committee (2002/2003: £11,600). Linda Walton, a Non Executive Director, received remuneration from
UKPS, the total costs in the year were £15,594 of which £10,250 (£3,000 to be paid in 2004/2005) has been received
for her services relating to the Passport Verification Service project (2002/2003: £2,500). Christine Ashton, an Advisory
Board member in 2002/2003, received no remuneration from UKPS during 2003/2004 as she left due to the
disbandment of the Advisory Board in January 2003 (2002/2003: Total costs £2,000).
44
>>>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
9 Tangible fixed assets
Motor Vehicle Furniture and Electrical Telecoms Refurbishment IT Assets Under TotalFittings Equipment Equipment Development Construction
£000 £000 £000 £000 £000 £000 £000 £000
Cost or valuation
At 1 April 2003 6 3,622 2,978 1,497 19,853 2,841 1,139 31,936
Additions – 88 1,086 26 1,417 3,108 5,323 11,048
Revaluation – – – – 510 – – 510
Diminution – (6) (187) (8) – – – (201)
Disposals – (1) (82) (40) – – – (123)
Transfer of assets into use – – – – – 1,139 (1,139) –
At 31 March 2004 6 3,703 3,795 1,475 21,780 7,088 5,323 43,170
Depreciation
At 1 April 2003 2 1,865 1,379 699 2,877 568 – 7,390
On disposals – – (49) (40) – – – (89)
Charge for year 1 240 760 270 1,515 1,418 – 4,204
Backlog depreciation – (2) (36) (3) 69 – – 28
At 31 March 2004 3 2,103 2,054 926 4,461 1,986 – 11,533
Net book value 31 March 2004 3 1,600 1,741 549 17,319 5,102 5,323 31,637
Net book value
31 March 2003 4 1,757 1,599 798 16,976 2,273 1,139 24,546
10 Debtors *
2003/2004 2002/2003
£000 £000
Trade Debtors 36 36
HMG Debtors 3,226 7,070
Staff Debtors 208 195
Prepayments and Accrued Income 5,171 2,136
Partnership Debtors** 2,340 6,322
10,981 15,759
* All debtors shown above fall due within one year.
**The balance due from POL at the end of the period was £2.3m (2002/2003: £6.2m) see note 21.
45
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
11a Creditors: Amounts falling due within one year*
2003/2004 2002/2003
£000 £000
Trade creditors 4,121 3,457
Other creditors ** 4,719 –
Deferred income 6,377 2,678
Accruals 11,182 4,876
Amounts due to Home Office general cash account 41,297 30,450
67,696 41,461
* The 'General Trading' bank account has been removed from the 'Creditors: Amounts falling due within one year’ and shown on the face of the Balance Sheet as 'Bank Overdraft'.
** Included within 'Other Creditors' is £4.6m. This represents the non-retainable element of the passport fee for consular protection for March 2004 which is still owed to the Treasury.
11b Creditors: Amounts falling due after more than one year
2003/2004 2002/2003
£000 £000
Deferred Income * 3,400 3,800
3,400 3,800
* This represents the deferred income arising from a lease incentive received on the re-leasing of Globe House, London.
12 Provisions for liabilities and charges
2003/2004 2002/2003
£000 £000
Balance at 1 April 119 179
Amount utilised (71) (81)
Arising in the year – Early retirement 50 21
Arising in the year – POL* 450 –
Balance at 31 March 548 119
*Represents the obligation to Post Office Limited for the potential invoicing discrepancy of passport fees.
46
>>>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
13 Reconciliation of movements in Government funds:
13a General fund
2003/2004 2002/2003
£000 £000
Balance at 1 April 27,784 16,862
Surplus on ordinary activities 69,780 37,218
Non-retainable element of the passport fee for consular protection* (40,650) (16,363)
Transfer from revaluation reserve 36 42
VAT Recovered by Home Office (4,153) (6,676)
Non cash cost 431 526
Amounts owed to the Home Office (41,297) (30,450)
Cost of capital 1,050 1,387
Removal of amounts owed to Home Office 2001/2002 – 4,523
Payroll funded by the Home Office* – 43,983
Refunds* – 586
Fees paid over to Home Office* – (68,269)
Receipts from Home Office to fund Trading account* – 44,415
Balance at 31 March 12,981 27,784
* Amounts in 2002/2003 represents the period from April to September 2002, reflecting movements prior to the transfer of ownership of the PGO account from
the Home Office in October 2002.
The UKPS made a surplus of £29.1m (after deducting non retainable element of the passport fee) which has eliminated past
deficits accumulated under agreement with HM Treasury.
13b Revaluation reserve
2003/2004 2002/2003
£000 £000
Balance at 1 April 1,074 529
Movement in Year 510 637
Backlog Depreciation (unrealised) (69) (50)
Movement to General Fund (36) (42)
Balance at 31 March 1,479 1,074
The revaluation reserve represents the difference between the net book value of the fixed assets on a revalued basis and on an
historic cost basis where the revalued amount is higher.
47
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
14 Pension costs
The PCSPS is an unfunded multi-
employer defined benefit scheme but
the UKPS is unable to identify its share
of the underlying assets and liabilities.
A full actuarial valuation was carried out
at 31 March 1999, details of which can
be found in the resource accounts of the
Cabinet Office: Civil Superannuation
(www.civilservice-pensions.gov.uk).
The conditions of the Superannuation
Acts 1965 and 1972 and subsequent
amendments apply to those employees
of the UKPS who are Civil Servants. For
year to date contributions of £4.9m
were paid to the PCSPS at between 11%
and 18.5% of salary as determined by
the Government Actuary and advised by
the Treasury.
Pension benefits are provided through
the Civil Service pension arrangements.
From 1 October 2002, civil servants
may be in one of three statutory based
‘final salary’ defined benefit schemes
(classic, premium, and classic plus).
New entrants after 1 October 2002 may
choose between membership of
premium or joining a good quality
money purchase stakeholder based
arrangement with a significant
employer contribution (partnership
pension account).
(a) Classic scheme
Benefits accrue at the rate of 1/80th of
pensionable salary for each year of
service. In addition, a lump sum
equivalent to three years' pension is
payable on retirement. Members pay
contributions of 1.5 per cent of
pensionable earnings. On the death of
a member with two or more years'
qualifying service, pensions are payable
to the surviving spouse at a rate of half
the member's pension. On death in
service, the scheme pays a lump sum
benefit of twice pensionable pay (to the
member's nominee) and also provides a
service enhancement on computing the
spouse's pension. The enhancement
depends on length of service and
cannot exceed 10 years. Medical
retirement is possible in the event of
serious ill health. In this case, pensions
are brought into payment immediately
without actuarial reduction and with
service enhanced as for widow(er)
pensions.
(b) Premium scheme
Benefits accrue at the rate of 1/60th of
final pensionable earnings for each year
of service. Unlike classic, there is no
automatic lump sum, but members may
commute some of their pension to
provide a lump sum up to a maximum of
3/80ths of final pensionable earnings
for each year of service or 2.25 times
pension if greater (the commutation
rate is £12 of lump sum for each £1 of
pension given up). For the purposes of
pension disclosure the tables assume
maximum commutation.
Members pay contributions of 3.5 per
cent of pensionable earnings. On the
death of a member with two or more
years' qualifying service, pensions are
payable to the surviving spouse or
eligible partner at a rate of 3/8ths the
member's pension (before any
commutation). On death in service, the
scheme pays a lump-sum benefit of
three times pensionable earnings (to
the member's nominee(s)) and also
provides a service enhancement on
computing the spouse's or eligible
partner's pension. The enhancement
depends on length of service and
cannot exceed 10 years. Medical
retirement is possible in the event of
serious ill health. In this case, pensions
are brought into payment immediately
without actuarial reduction. Where the
member's ill health is such that it
permanently prevents them
undertaking any gainful employment,
service is enhanced to what they would
have accrued at age 60.
(c) Classic plus scheme
This is essentially a variation of
premium, but with benefits in respect of
service before 1 October 2002
calculated broadly as per classic.
Pensions payable under classic,
premium, and classic plus are
increased in line with the Retail Prices
Index.
(d) Partnership pension account
This is a stakeholder-type arrangement
where the employer pays a basic
contribution of between 3% and 12.5%
(depending on the age of the member)
into a stakeholder pension product. The
employee does not have to contribute
but where they do make contributions,
these will be matched by the employer
up to a limit of 3% (in addition to the
employer's basic contribution).
Employers also contribute a further
0.8% of pensionable salary to cover the
cost of risk benefit cover (death in
service and ill health retirement). The
member may retire at any time between
the ages of 50 and 75 and use the
accumulated fund to purchase a
pension. The member may choose to
take up 25% of the fund as a lump sum.
The death in service lump sum benefit
is three times pensionable earnings.
48
>>>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
15a Non cash transactions
2003/2004 2002/2003
£000 £000
Depreciation charges (notes 5 and 9) 4,163 2,977
Notional charges (note 5) 431 526
Diminution of assets (note 5) 201 251
Early retirement provision (note 12) 50 21
Refunds* – 586
Payroll costs* – 43,983
4,845 48,344
* Amounts reflecting movements prior to the transfer of ownership of the PGO account from the Home Office, October 2002
15b Movements in working capital other than cash
2003/2004 2002/2003
£000 £000
Decrease/(Increase) in stocks 619 (2,113)
Decrease/(Increase) in work in progress 91 (368)
Decrease/(Increase) in debtors (excluding VAT) 937 (2,182)
Increase/(Decrease) in creditors (excluding GTA) 10,427 (565)
Increase/(Decrease) in provisions 379 (81)
12,453 (5,309)
15c VAT paid
2003/2004 2002/2003
£000 £000
Vat paid to suppliers in the year (10,322) (11,054)
(10,322) (11,054)
49
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
16 Analysis of movements in cash balances
2003/2004 2002/2003
£000 £000 £000
Opening balance 29,093 4,533
UKPS non-fee accounts (583) (1,367)
Fee accounts due to consolidated fund 10,846 25,927
Increase in cash 10,263 24,560
Closing balance 39,356 29,093
Balance at office of Paymaster General 26,990 28,080
Balance at commercial banks and cash in hand 14,607 2,618
Cash at Bank and in hand 41,597 30,698
Bank overdraft (2,241) (1,605)
Balance as at 31 March 39,356 29,093
17 Contingent liabilities
The ten year Public/Private Partnership Agreements with Siemens Business Services and Security Printing and Systems Ltd
contain termination and expiry clauses, which if activated by the Agency would result in financial liabilities being incurred. The
Agency believes that the likelihood of these liabilities materialising is remote, but as a possibility remains, are disclosed here for
completeness.
18 Lease obligations and other financial commitments
a The UKPS has annual commitments under operating leases which expire as follows:
Land and Buildings Other Total
£000 £000 £000
within one year – – –
between 2005/06 and 2009/10 2,044 967 3,011
after 31 March 2010 4,492 319 4,811
Total commitments under operating leases 6,536 1,286 7,822
b 2003/2004 was the sixth year of the ten-year contracts awarded under the Public/Private Partnership Initiative to
Siemens Business Services and Security Printing and Systems Ltd. The total award value of the two contracts over the full
ten years is estimated at £352m.
50
>>>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
19 Capital commitments
As at 31 March 2004 UKPS had entered
into capital commitments of £0.5m for
the Liverpool relocation, £4.4m for the
EPA II project and £0.4m for the
'Improved Call Handling' project,
(2002/2003: total capital
commitments £0.7m).
20 Euro expenditure
As at 31 March 2004, the UKPS had
incurred no direct expenditure ensuring
the computerised systems are
compliant with the introduction of the
Euro. The UKPS is, however,
represented on the Home Office Euro
Steering and co-ordinators Groups.
21 Related parties
The United Kingdom Passport Service is
an Executive Agency of the Home Office
and is headed by a Chief Executive who
is responsible to the Secretary of State
for the Home Department.
The Home Office is regarded as a
related party. Material transactions
between the Home Office and the
Agency which occurred during the
period are as follows:
a) Amounts paid to the Home Office
during 2003/2004 totalled £66.5m,
which included: £36.1m for the non-
retainable element of the passport
fee and £30.4m CFER transfer from
2002/2003 (2002/2003: UKPS
paid the Home Office £84.6m and
received £44.4m). Additionally, the
UKPS payroll service is provided by
the Home Office Pay and Pension
Service (HOPPS) resulting in
transactions amounting to £45.7m
(2002/2003: £44.3m).
b) Net accommodation costs paid by
the Home Office during the year
amounted to £1.0m (2002/2003:
£1.0m).
The Foreign & Commonwealth Office
(FCO) is also regarded as a related party.
Prior to the fee increase in October
2003, the Agency collected £9.40 per
adult standard, £2.35 per child
passport and £14.10 per jumbo
passport to recover the cost incurred by
the FCO for providing consular
protection. From October 2003, £9.65,
£2.41 and £14.49 was collected
respectively. The total collected in
2003/2004 was £40.7m of which
£36.1m was paid in 2003/2004 to the
Treasury, via the Home Office
(2002/2003: £33.5m).
Other Government Departments and
Agencies which the UKPS transacted
with in the normal course of business
during the year include the Benefits
Agency, the Department for
Constitutional Affairs (formerly the Lord
Chancellors Department), the
Department for Trade and Industry, Her
Majesty's Customs & Excise, and the
Foreign and Commonwealth Office. The
UKPS had paid £1m to the Benefits
Agency and had received £12.3m from
the other agencies, the total value
amounted to £13.3m (2002/2003:
£10.8m).
Post Office Limited (POL) paid over
passport fees during the period
amounting to £76.5m (2002/2003:
£53.3m). The balance due from POL at
the end of the period was £2.3m
(2002/2003: £6.2m).
During the year none of the Board
Members, key management staff or
other related parties had undertaken
any transactions with the UKPS.
22 Financial instruments
FRS 13, Derivatives and Other Financial
Instruments, requires disclosure of the
role which financial instruments have
had during the period in creating or
changing the risks an entity faces in
undertaking its activities. Because of
the largely non-trading nature of its
activities and the way in which
government agencies are financed,
UKPS is not exposed to the degree of
financial risk faced by business entities.
Moreover, financial instruments play a
much more limited role in creating or
changing risk than would be typical of
the listed companies to which FRS 13
mainly applies. The UKPS has no
powers to borrow, invest surplus funds
or purchase foreign currency. Financial
assets and liabilities are generated by
day-to-day operational activities and are
not held to change the risks facing the
department in undertaking its activities.
As permitted by FRS 13, debtors and
creditors which mature or become
payable within 12 months from the
balance sheet date have been omitted
from the currency profile.
The UKPS has no borrowings and relies
primarily on funding from the Home
Office for its cash requirements, and is
therefore not exposed to liquidity risks.
It also has no material deposits, and all
material assets and liabilities are
denominated in sterling, so it is not
exposed to interest rate risk or currency
risk. The fair value of cash is the same
as the book value.
23 Post Balance Sheet events
A major step in the government’s plans
for introducing identity cards was
launched on 26 April 2004 when the
Agency began a six month trial to test
the technology for capturing facial, iris
and fingerprint biometric details from
10,000 members of the public. The
trial is funded by the Home Office and
will result in 3 staged payments to the
main contractor (ATOS Origin) based on
all equipment delivered and installed,
completion of the pilot and receipt of
the pilot report and findings. There will
be four sites participating in the trial
(London, Leicester, Newcastle and
Glasgow) and a mobile unit covering the
rest of the country.
51
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
24 Special payments
2003/2004 2002/2003
£000s £000s
Compensation to the Public 79 119
Compensation to Staff – Personal Injury 2 –
Compensation to Staff – Excluding Personal Injury 64 17
145 136
There were no individual 'Special Payments' made by UKPS, exceeding £100k.
>>
52
>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ACCOUNTS DIRECTION GIVEN BY THE TREASURY INACCORDANCE WITH SECTION 7 (2) OF THEGOVERNMENT RESOURCES AND ACCOUNTS ACT 2000
1. The UKPS will prepare accounts for the year ended 31 March 2004 in compliance
with the accounting principles and disclosure requirements of the edition of the
Resource Accounting Manual issued by HM Treasury which is in force for
2003–04.
2. The accounts shall be prepared so as to:
(a) give a true and fair view of the income and expenditure (or as appropriate, net
resource outturn), total recognised gains and losses (or, as appropriate,
recognised gains and losses), and cash flows of the Agency for the financial
year, and of the state of affairs as at 31 March 2004; and
(b) provide disclosure of any material expenditure or income that has not been
applied to the purposes intended by Parliament or material transactions that
have not conformed to the authorities which govern them.
3. Compliance with the requirements of the Resource Accounting Manual will, in all
but exceptional circumstances, be necessary for the accounts to give a true and
fair view. If, in these exceptional circumstances, compliance with the
requirements of the Resource Accounting Manual is inconsistent with the
requirement to give a true and fair view the requirements of the Resource
Accounting Manual should be departed from only to the extent necessary to give a
true and fair view. In such cases, informed and unbiased judgement should be
used to devise an appropriate alternative treatment which should be consistent
with both the economic characteristics of the circumstances concerned and the
spirit of the Resource Accounting Manual. Any material departure from the
Resource Accounting Manual should be discussed in the first instance with the
Treasury.
David Loweth
Head of the Central Accountancy Team, Her Majesty’s Treasury
30 January 2004
53
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ANNEX (A)MEET THE MANAGEMENT TEAM
Bernard L. Herdan, MA(Cantab) Ceng, MIEE, DMS
Chief Executive, 56 years old
Bernard has had a varied career in the private and public sectors in the UK and
continental Europe. During the last 12 years, he was Commercial Director at the
Meteorological Office and Chief Executive of the Driving Standards Agency. He
joined the UKPS as Chief Executive in September 1999.
Kevin Sheehan
Director of Operations, 56 years old
Kevin joined the UKPS as Director of Planning and Resources in November
1992. He became Director of Operations in November 1996. He has extensive
management and policy experience within the Home Office.
Ruth Pearson, MBA, BA(Hons), FCIPD
Director of Human Resources, 46 years old
Ruth joined the UKPS in November 2002. She has held a series of Board roles
with a career spanning local government, the university sector and private
industry.
Alistair Cook, BA(Hons), CPFA
Director of Finance, 37 years old
Alistair joined the UKPS in 1994 after several years working for the National
Audit Office.
John Davies
Director of Systems, 58 years old
John joined the Civil Service in 1972 and specialises in systems development
and project management.
Christine Nickles
Director of Marketing and Communications, 53 years old
Christine joined the UKPS in April 2000, following four years with the Driving
Standards Agency. Her career has also encompassed local government,
charities and the private sector.
>>
54
>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Alan Wilkes, MBA, BSc (Hons)
Director of Strategic Planning, 33 years old
Alan joined the UKPS in September 2003. He has previously held positions with
international strategic and environmental consultancies, together with
undertaking scientific research in the natural gas industry.
Rob Bowley, BA (Hons)
Director – Identity Projects, 55 years old
Rob joined the UKPS as the Peterborough Regional Manager in 1987. He has
previously held Home Office posts in the Prison Service and civil defence, and
also spent some time as an immigration officer.
Diane Rampling, BA (Hons), ACIS, MCIPS
Commercial Director, 49 years old
Diane has a career background of senior procurement and commercial
positions in both the public and private sectors and joined the UKPS in
September 2003.
Jim Michie, CA
Non-Executive Director, 60 years old
Jim retired as a Director of Littlewoods Plc in October 2001. During the year he
held a non-executive role with the Criminal Records Bureau.
John Holden, MA (Cantab), FICM
Non-Executive Director, 58 years old
John concluded his ‘first career’ in the oil industry as manager of BP’s European
Lubricants and Bitumen Business. He subsequently spent six years as Registrar
of Companies and Chief Executive of Companies House, a DTI Agency.
Linda Walton, BA(Hons), MCIPS, ACIB
Non-Executive Director, 49 years old
Linda is a freelance consultant with a background in financial services,
operations, outsourcing and supplier management. She has held executive and
board level positions in banking and the credit card industry, and has held public
sector non-executive positions since 1994.
55
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ANNEX (B) GLOSSARY OF TERMS
CRB Criminal Records Bureau
DfES Department for Education and Skills
DVLA Driver and Vehicle Licensing Agency
EU European Union
FCO Foreign and Commonwealth Office
FIUs Fraud and Intelligence Units
HR Human Resources
ICAO International Civil Aviation Organization
ICP Integrated Change Programme
ID card Identity Card
IiP Investor in People
IND Immigration and Nationality Directorate
LSR lost, stolen and recovered database
NCIS National Criminal Intelligence Service
ONS Office of National Statistics
PASS Passport Application Support System
PCS Public and Commercial Services Union
PIP Personal Identification Project
SBS Siemens Business Services
SPSL Security Printing and Systems Ltd
UKPS UK Passport Service
>>
56
>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ANNEX (C) UKPS PUBLICATION SCHEME
Corporate governance The UK Passport Service
statement of commitment
Printed version from the Business
Assurance Manager
X
Class Description Format/ Availability Charge
Investor in People The UK Passport Service action
plan to retain Investor in People
Printed version from the HR
Manager
X
X
X
X
X
X
Management meetings Agenda, minutes and
associated papers from the
Management Board and the
Consultative Panel of Passport
Users
Printed version from the Private
Office Manager (with some
information withheld on
commercial / security grounds)
Management of people Strategy for People
Diversity strategy
Training & Development
Strategy, review and policy
HR service level agreement
Pay & Pension Services service
level agreement
Staff handbook
Policy documents:
Printed version from the HR
Manager
Discipline
Grievance
Managing
attendance
Racial equality
Equal
Opportunities
Harassment,
bullying and
discrimination
Recruitment
and selection
Business plans and reports UK Passport Service Corporate
Plans
Regional Office and HQ
Directorate Business Plans
Annual Report and Accounts
Electronic version from
www.passport.gov.uk
Printed version from the Head of
Corporate Strategy
Staff surveys
Vital Signs Monthly report showing the UK
Passport service performance
against target
Printed version from the Finance
Manager
Results of staff surveys Printed version from the HR
Manager
57
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Press notices Press notices from November
2002
www.passport.gov.uk X
Class Description Format/ Availability Charge
Contract management Notices of the UKPS contracts
advertised and awarded above
£100,410
Supplement to Official Journal of
the EC
www.europa.eu.int/eur-lex/en/
search-oj
X
X
X
X
X
Complaints handling Complaints procedures www.passport.gov.uk
Customer surveys Results of regular surveys of
UKPS’s customers
Printed version from the
Communications Manager
Job opportunities Vacancies within the UKPS www.passport.gov.uk
Newsletters Internal newsletter issues Printed version from the
Communications Manager
XWelsh Language Scheme Full details of our Welsh
Language Scheme
Printed version from the Customer
Services Manager
XEnvironmental impact The UKPS green policy Printed version from the Business
Planning Manager
X
National rate
X
Information for the public
and Parliament
Information on the services
available and general guidance
Additional information leaflets
www.passport.gov.uk
Adviceline: 0870 521 0410
Printed versions from the
Communications Manager or local
libraries and CABs
Note: An enquiry regarding any of the above is provided free of charge for the first hour, and then £20 per hour for each
subsequent hour, up to a maximum of 30 hours.
>>
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>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ANNEX (D) DIVERSITY ACTIONS
The following table details employment figures for Black and Ethnic Minority (BEM) staff within the UKPS by grade; in total the
UKPS employs 15.6% BEM staff. The UKPS is disappointed that we no longer exceed the Government target for HEO grades as we
have done in previous years. To understand the reasons why and to strengthen our commitment to diversity actions we have
upgraded the role of our Diversity Manager and will be providing additional resources to these tasks.
Grade Government target for UKPS Difference Not specifiedemployment of BEM staff
PO1 – EO Unspecified 16.50% N/a 2.04%
HEO 11.0% 8.90% -2.10% 2.05%
SEO & Grade 7 3.5% 5.26% 1.76% 1.05%
Grade Female Male
PO1 – EO 66.6% 33.4%
HEO 58.2% 41.8%
SEO & Grade 7 41.2% 56.8%
The breakdown by gender is:
The organisation values its staff and makes an effort to be as flexible as possible, within operational constraints. The following
summary statistics provide evidence of this:
Childcare vouchers 100 staff have used childcare vouchers during the financial year
Part-time staff 309 staff work part time
Adoption leave 19 members of staff have used this during the year
Flexible working 80% of staff work flexible hours
Printed in the UK for The Stationery Office Limited on behalf of the Controller of Her Majesty's Stationery Office7/04, 65536, 171626
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FEEDBACK FORM
ANNUAL REPORT AND ACCOUNTS 2003–04
The UKPS is interested in your views, whether positive or negative, on this document. Any comments made on this questionnaire
will be used to improve our next Annual Report.
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>>>>>>>>>>>>> UKPS Annual Report and Accounts 2003–04 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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Please return to: Corporate Strategy, Globe House, 89 Eccleston Square, LONDON, SW1V 1PN, Fax: 020 7901 2468, or e-mail:
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Passport errorsTo reduce the level of passportsreturned with errors after issue to0.25% (reduced from 0.33% in2002–03)
Not met: The level of passportsreturned with errors after issuewas reduced to 0.27%
Although the target was not met,the 0.27% error rate is asignificant improvement on2002–03 when the error ratewas 0.38%
PERFORMANCE TARGET RESULT
Customer satisfactionTo ensure a customersatisfaction rate of 93%
TurnaroundTo ensure that 99.5% ofstraightforward partner andpostal applications are turnedaround within 10 days
To ensure that 99.5% ofPremium and Fast Track servicesare turned around within theguaranteed period
Appointment timesTo ensure that 92% ofcustomers are seen within 20minutes of their appointmenttime
Telephone callsTo ensure that 90% oftelephone calls are answeredwithin 20 seconds
Exceeded: 95% of customerswere seen within 20 minutes oftheir appointment time
Exceeded: 99.9% ofstraightforward partner and postalapplications were turned aroundwithin 10 days, despite demandvolumes of 7% above plan
Partly met: 99.5% of Fast Trackapplications were processedwithin service standards; 98.8%of Premium service applicationswere processed within servicestandards
Exceeded: The averagecustomer satisfaction rate was98%
Not met: The number oftelephone calls answeredwithin 20 seconds was 89%
The volume of calls, at 3.3million, were 3% higher than2002–03
90%
92%
94%
96%
98%
100%
1999–00 2000–01 2001–02 2002–03 2003–04
Actual
Target
Customer satisfaction
Turnaround of postal and partner applications within 10 days
98.4%
98.6%
98.8%
99.0%
99.2%
99.4%
99.6%
99.8%
100.0%
2000–01 2001–02 2002–03 2003–04
Actual
Target
Customers seen within 20 mins of appointment
84%
86%
88%
90%
92%
94%
96%
98%
100%
2001–02 2002–03 2003–04
Actual
Target
86%
87%
88%
89%
90%
91%
92%
2000–01 2001–02 2002–03 2003–04
Actual
Target
Telephone calls answered within 20 seconds
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
0.40%
2000–01 2001–02 2002–03 2003–04
Returnedpassports
Target
Average number of passports returned with error
The staff satisfaction survey isundertaken every two years, and waslast completed in 2002–03. At thattime, 77% of staff were satisfied withtheir job
A new survey is due for completionin early 2005
Staff developmentTo invest 4.5% of salary cost intraining and development
Staff turnoverTo ensure staff turnover ratedoes not exceed 12%
Not met: The percentage ofsalary cost spent on training anddevelopment was 4.1%
Exceeded: The staff turnover ratefor the year was 9.1%
PERFORMANCE TARGET RESULT
Unit costTo achieve a unit cost of £24.41
Surplus/deficitTo achieve a surplus, after FCOcosts, of £15.4 million
Staff absenceTo ensure that the averageannual staff sickness absencerate does not exceed 11 daysper (full-time equivalent)member of staff
Invoice paymentTo ensure 97% of invoices arepaid within 30 days of receipt
Not met: The average rate ofsick absence was 11.1 days per(full-time equivalent) member ofstaff, however sick absence hashad a downward trend over thepast ten years
Exceeded: The total surplus,after FCO costs of £40.7 million,was £29.1 million
Exceeded: An average unit costof £22.86 was achieved
Exceeded: The averagenumber of invoices paid within30 days was 99%
Passport unit cost
0
5
10
15
20
25
30
1998–99 1999–2000 2000–01 2001–02 2002–03 2003–04
Pou
nds
Actual
Target
0
5
10
15
20
25
30
35
40
45
2000–01 2001–02 2002–03 2003–04
Actual
Target
Surplus after FCO costs
Mill
ion
poun
ds
Staff sickness absence
0
2
4
6
8
10
12
14
16
95
96
97
98
99
99
–0
0
00
–0
1
01
–0
2
02
–0
3
03
–0
4
Day
s pe
r an
num
Actual
Target
84%
86%
88%
90%
92%
94%
96%
98%
100%
1998–99 1999–2000 2000–01 2001–02 2002–03 2003–04
Actual
Target
Invoice payment within 30 days
Staff satisfactionTo ensure a staff satisfaction ratewith working for the UKPS of 90%
CONTACT:
If you wish to receive further information on any of the issues in this document or have any questions relating to the services
provided by the UK Passport Service, please contact:
Marketing and Communications Directorate
UK Passport Service
Globe House
89 Eccleston Square
London SW1V 1PN
Or via the Passport Service website: www.passport.gov.uk
You can also contact the Passport Adviceline (24 hours a day, 7 days a week)
0870 521 0410
(Calls are charged at national rate)
All media enquiries should be directed to the Home Office Press Office:
020 7273 4545
9 780102 928297
ISBN 0-10-292829-0
Published by TSO (The Stationery Office) and available from:
Onlinewww.tso.co.uk/bookshop
Mail,Telephone, Fax & E-mailTSOPO Box 29, Norwich, NR3 1GNTelephone orders/General enquiries: 0870 600 5522Fax orders 0870 600 5533Order through the Parliamentary Hotline Lo-call 0845 7 023474 E-mail: [email protected] 0870 240 3701
TSO Shops123 Kingsway, London,WC2B 6PQ020 7242 6393 Fax 020 7242 639468–69 Bull Street, Birmingham B4 6AD0121 236 9696 Fax 0121 236 96999–21 Princess Street, Manchester M60 8AS0161 834 7201 Fax 0161 833 063416 Arthur Street, Belfast BT1 4GD028 9023 8451 Fax 028 9023 540118–19 High Street, Cardiff CF10 1PT029 2039 5548 Fax 029 2038 434771 Lothian Road, Edinburgh EH3 9AZ0870 606 5566 Fax 0870 606 5588
The Parliamentary Bookshop12 Bridge Street, Parliament Square,London SW1A 2JXTelephone orders/General enquiries 020 7219 3890Fax orders 020 7219 3866
TSO Accredited Agents (see Yellow Pages)
and through good booksellers
UK PASSPORT SERVICE
ANNUAL REPORT AND ACCOUNTS
2003–2004
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