The Guardian reports:
The 1,200 brollies symbolised an archetypal government computer fiasco. They were bought in 1999 to protect thousands of anxious applicants for new passports, forced to queue in the street as the agency struggled with a new IT system..In the event, the umbrellas were never deployed in earnest. The great passport panic, caused by a decision to introduce new IT simultaneously with a change in the rules, was over within weeks.
With hindsight, the agency's IT problems were just teething troubles, albeit of the screaming all night variety, which should have been foreseen. Since then, so far as we know, the system has worked.
I remember my passport needed renewing and I was wondering how the hell I was going to manage to get back to the UK and get it done with queues for weeks. Then I remembered that Embassies could issue passports and got it done in half an hour. Only snag, it's not machine readable so that at passport controls I have to wait for the details to be typed in every time, and I'll have to get a new passport if I ever want to go to America.
You can read what happened to the umbrellas in the end, here