Daily Telegraph: pounds 5,000 Cost of removing crucial bank details from the missing discs pounds 200m Cost of banks changing passwords and accounts for worried customers

By Christopher Hope Home Affairs Correspondent

THE child benefits records scandal could have been avoided if Customs officials had spent pounds 5,000 on removing bank account details from the computer discs that later went missing, The Daily Telegraph can disclose.

Emails showed that HMRC officials were concerned about paying to remove unnecessary information such as account details from the discs before they were sent to London.

Cutting the files would have cost as little pounds 5,000, experts said yesterday, compared to the pounds 200m cost that could result from the scandal, even if no fraud is committed.

The Taxpayers' Alliance arrived at the figure after calculating that it would cost pounds 20 per customer for banks to answer queries and deal with those wanting to change accounts, PIN numbers or passwords. There would be additional costs from helplines and credit checks if all 7.2 million families affected were to make these changes.

The problems started in March when the National Audit Office first asked for the names, National Insurance numbers and child benefit numbers of every child.

The NAO, the public spending watchdog, wanted the information to select 100 cases at random for its annual audit of Revenue and Customs.

The emails show that the NAO wanted bank and other details removed from the discs. An HMRC official replied that it could only provide all of the details on the database to keep costs down.

As a result, the two discs containing 25 million personal records, including the entire child benefit database, parents' bank account details, their addresses and telephone numbers, were sent from HMRC in Tyne and Wear to the NAO in London.

The NAO confirmed yesterday that copies of the emails dated March 13 were sent to Nigel Jordan, a senior HMRC official in charge of child

benefit.   

In October, the NAO asked for the same information for another audit. Customs officials again posted the entire database to the NAO and the discs were lost in the post.

HMRC confirmed last night that the original money-saving decision to send the unedited discs in March was the reason why the entire database was sent in October.

"We don't have infinite resources, we have to use our resources rationally,'' a   

spokesman said.   

However The Telegraph has established that a typical clean-up operation would cost around pounds 5,000 and take a software engineer less than a week.

A spokesman for HMRC said that the pounds 5,000 cost of removing the information "was not a figure we recognise'' and declined to discuss the cost because the matter is the subject of a review. The spokesman confirmed that the investigation by the accountancy firm Pricewaterhouse Coopers "will consider the cost of stripping out the

database''.