Significant imbalances between fees and costs pose risks to the financial resilience of public services and create unfairness for the public. The NAO reported that the passport service has been underrecovering since 2017-18 without explicit approval from Home Office Ministers or HM Treasury. This has led to a deficit of £223 million in 2023-24 and a total deficit of £916 million over the five-year period from 2019-20. However, Home Office is yet to agree a strategy or timeline with the Treasury to address their ongoing deficit.20 We asked the Treasury about the consequences of unplanned surpluses and deficits. The Treasury informed us that if departments don’t recover costs through their fees, departments need to absorb the unfunded costs within its existing budget, otherwise the cost of a particular government service will come from general taxation.21 This is unfair to taxpayers when they subsidise services that should be funded by users receiving the service.