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YASS
Mr A Montague
HM Treasury
1 Parliament Street
London SWIP 3AG
26" May 1998 tCL
Pear Hdacon,
BA/POCL/ICL Review
In response to Ross Newby’s letter of 13" May after our private session with
you, I am pleased to enclose an ICL Pathway paper on our views of the potential
longer term value of the infrastructure. As we have discussed, it 1s extremely
difficult with the current state of knowledge of government policy to be
quantitative in terms of either volumes of information or of costs and benefits.
However, it is clear that the volumes of information that may be envisaged
being carried by the network are large.
I am also enclosing a list of senior contacts within government with whom ICL
has had discussions regarding Better Government
We have arranged to meet the Panel again on 3" June to discuss some of these
matters with you and I look forward to meeting you then.
J. H. Bennett
Managute Director
ICL Pathway Ltd
Forest Road
Feltham
ce: Bill Robins, Alec Wylie, Peter Coppping, Ross Newby
tendon ESA TOS
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E) V1 A PATHWAY
ICL is a major supplier to Central and Local Government : therefore we take a close
interest in the Government’s initiatives to improve the quality and delivery of
Government Services to the citizen. When CITU was originally established in 1996,
ICL seconded a senior executive to help the Cabinet Office formulate the basis of the
approach now known generically as “Better Government”.
We have consistently argued that “joined up Government” needs to involve the widest
possible range of public sector players: Whivehall’s central Departments, Government
Agencies, Local Government and the Post Office (which many people regard as “the
human face of Government”). The modernisation of the Post Office network could -
and should - create a powerful opportunity to deliver a wider range of services to the
citizen using the full capability of the network and its system, including the use of
SmartCards.
Therefore, over the recent months, we have been briefing a wide range of people about
our views on Better Government and have backed up some of the briefings with
demonstrations of the Pathway system (to show how it works in practice).
etter Government: & Demonstration wa’
Dr David Clark MP, Chancellor of the Duchy of Lancaster
Andrew Lappin, Special Adviser to Mr Clark
Mr Ian McCartney, Minister of State, Trade & Industry DTI
Martyn Baker, Director Business & Postal Services DTI
David Sibbick DTI
Katherine Hathaway DTI
i” r : fe iefii n
Mrs Barbara Roche MP, Parliamentary Under Secretary of State DTI
Ms. Anne Campbell MP
(PPS to John Battle MP, Minister for Science, Energy & Industry)
James Purnell, No. 10 Policy Unit
Correspondence on Pathway
Mr Peter Mandelson MP, Minister without Portfolio
Geoff Mulgan No 10 Policy Unit
(re Social Inclusion)
Better Government Briefings
Robin Mountfield, Permanent Secretary, Cabinet Office
David Cooke, Head of CITU, Cabinet Office
Mark Gladwyn CITU
Phillipa Roe CITU
Richard Dudding, Senior Director for Strategy & Corporate Services, DETR
Andrew Murray DETR
John O’Callaghan DETR
Hilary Douglas, Director, Personnel & Support Services, DfEE
John Yard, Director Business & Management Services, Inland Revenue
Derek Howard Inland Revenue
Alistair Brown, Director Administration Services, Scottish Office
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Commercial in Confidence
The Potential for Pathway &
Horizon
A briefing paper from ICL Pathway
Abstract: This paper outlines some of the areas in which the ICL Pathway
network and services and the Horizon programme may be more widely
utilised to deliver additional commercial opportunities to The Post
Office and to enhance the UK Better Government initiative.
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The Potential for Pathway & Horizon
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Contents
INTRODUCTION
POCL COMMERCIAL SERVICES FOR CLIENTS ---
21) Key CLIENTS~
22
23
24
PERSONAL BANKING --
BILL PAYMENTS AND FAMILY BUDGETING.
MULTIPLE CHANNEL MANAGEMENT-
PROCESS IMPROVEMENT --- jv sosenencnennncneesneeeecenntantennnananncntnnnarenetacnneneeten 7
31 COST REDUCTION BY RE-ENGINEERING — 7
32 ADDING VALUE - o 7
BETTER GOVERNMENT 8
41 FRAUD REDUCTION 8
4.2 ACCESS TO GOVERNMENT 9
43 GOVERNMENT INFORMATION TO CITIZENS & LOCAL BUSINESS—-—------—-—--—~——---——--—--—-- 9.
44 GOVERNMENT INFORMATION CAPTURE E G STATISTICS COLLECTION AND STATUTORY
RETURNS 10
45 SOCIAL BANKING & WELFARE REFORM — 1
46 GOVERNMENT SERVICES IN THE COMMUNITY 12
47 EUROPEAN PROJECT: 12
INFRASTRUCTURE ------ ee 12
51 MULTI-CHANNEL 12
52 HELP DEsKs & CALL CENTRES — 13
SMART CARDS--. 13
FURTHER OPPORTUNITIES: 15
71. SECURE ELECTRONIC MAIL AND MESSAGING -15
72 DIRECTORY SERVICES 15
73 NAME AND ADDRESS FILE: 15
74 HOME SHOPPING 16
SUMMARY-—-- amen 16
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The Potential for Pathway & Horizon
1. Introduction
By the end of the year 2000 ICL Pathway, in partnership with Post Office Counters
Limited, will have achieved the following:
# automated all 38,000 counter positions of the 19,000 Post Offices in the
network, thereby delivering universal service throughout the entire
country and creating the secu-e back-bone infrastructure capable of
supporting the government’s Better Government and Information
Society Initiatives;
# provided magnetic stripe cards (and the infrastructure and systems) to
support 19 million benefit customers in order that they may collect their
payments. These cards will have replaced all current paper transactions,
from order book vouchers to Girocheques. Encashment fraud will have
been slashed, saving the UK Treasury an estimated £150million per
annum;
trained 72,000 Post Office staff and agents to use the system. This
represents the largest ever single investment in training for Post Offices
and, along with other training initiatives, will have transformed the
service which Post Offices can provide to their customers;
# put in place the largest and most secure commercial network in the UK,
handling in excess of 2.5billion transactions and £125billion annually,
and capable of supporting many other government and commercial
initiatives;
established a highly flexible service, easily adaptable for new products
and processes without the risks associated with creating a new
architecture or the costs of creating supporting products and processes
from scratch;
enabled smart card usage in all Post Offices from Day One. All 38,000
counter positions will be equipped with smart card read/writers, which
represents the largest smart card terminal estate in the country.
The result of this considerable investment will be to open the way to placing the
Post Office, the traditional heart of the community, at the centre of the UK’s move
into the Information age. In utilising the Post Office’s well known, trusted, national
asset and brand together with the ICL Pathway network and services, government
and industry can avoid the expense and risk of trying to create new brands and new
networks to support their important transformational initiatives to take the UK
into the new millennium.
In addition to extending the capability of the Post Office and POCL to expand the
breadth of their commercial offerings, Horizon has the potential to be used in a
much wider context. For example:
¢ in support of the government’s determination to tackle fraud;
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# to preserve the Post Office in the heart of the community,
# to broaden the scope of Post Office services to include Better
Government;
to extend the reach of Post Office services using many channels, such as
Kiosks and TV Set Top Boxes,
and by so doing to support social inclusion
The following paragraphs summarise some of ICL’s thoughts on how this
infrastructure may be exploited in support of POCL and in pursuance of the
government’s goals for the Information Society and particularly Better Government.
2. POCL Commercial services for Clients
2.1 Key Clients
POCL already provides commercial services for an impressive list of clients, of
which the largest are listed below.
Client msactions
1. Benefits Agency 900m
2. Royal Mail (letters & packets)* 300m
3. Alliance & Leicester /Girobank 400m
4 Parcelforce World Wide 45m
5. BT Gills) 40m
6. Driver & Vehicle Licencing Agency (Tax Discs) 35m
7. National Savings 22m
8. BBC (TV Licence Renewals) iim
Other clients include:
Most Utilities for Bill Payments/Revenue Collection
(e.g. British Gas, Eastern Electric, etc.)
Most Local Authorities for Rent payments
*Excludes stamp sales which are accounted for by value not volume.
2.2 Personal Banking
POCL performs personal banking transactions for Alliance & Leicester, Giro,
National Savings, Co-op Bank, and Lloyds/TSB. The transactions are typically
simple deposits or withdrawals on current accounts - using a paper based process to
log the transactions on behalf of the client. The associated papers (cheques, deposit
documents, and withdrawal documents) are processed by the client at their own site,
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1. Introduction
By the end of the year 2000 ICL Pathway, in partnership with Post Office Counters
Limited, will have achieved the following:
# automated all 38,000 counter positions of the 19,000 Post Offices in the
network, thereby delivering universal service throughout the entire
country and creating the secure back-bone infrastructure capable of
supporting the government’s Better Government and Information
Society Initiatives;
provided magnetic stripe cards (and the infrastructure and systems) to
support - 19 million benefit customers in order that they may collect
their payments. These cards will have replaced all current paper
transactions, from order book vouchers to Girocheques. Encashment
fraud will have been slashed, saving the UK Treasury an estimated
£150million per annum;
trained 72,000 Post Office staff and agents to use the system. This
represents the largest ever single investment in training for Post Offices
and, along with other training initiatives, will have transformed the
service which Post Offices can provide to their customers;
} put in place the largest and most secure commercial network in the UK,
handling in excess of 2.5billion transactions and f125billion annually,
and capable of supporting many other government and commercial
initiatives;
¢ established a highly flexible service, easily adaptable for new products
and processes without the risks associated with creating a new
architecture or the costs of creating supporting products and processes
from scratch;
¢@ — enabled smart card usage in all Post Offices from Day One. All 38,000
counter positions will be equipped with smart card read/writers, which
represents the largest smart card terminal estate in the country.
The result of this considerable investment will be to open the way to placing the
Post Office, the traditional heart of the community, at the centre of the UK’s move
into the Information age. In utilising the Post Office’s well known, trusted, national
asset and brand together with the ICL Pathway network and services, government
and industry can avoid the expense and risk of trying to create new brands and new
networks to support their important transformational initiatives to take the UK
into the new millennium.
In addition to extending the capability of the Post Office and POCL to expand the
breadth of their commercial offerings, Horizon has the potential to be used in a
much wider context. For example:
in support of the government’s determination to tackle fraud;
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to preserve the Post Office in the heart of the community;
to broaden the scope of Post Office services to include Better
Government;
# to extend the reach of Post Office services using many channels, such as
Kiosks and TV Set Top Boxes;
and by so doing to support social inclusion
The following paragraphs summarise some of ICL’s thoughts on how this
infrastructure may be exploited in support of f SCL and in pursuance of the
government’s goals for the Information Society and particularly Better Government.
2. POCL Commercial services for Clients
2.1 Key Clients
POCL already provides commercial services for an impressive list of clients, of
which the largest are listed below
Client Transactions p.a.
1. Benefits Agency 900m
2. Royal Mail (letters & packets) 300m
3 Alliance & Leicester /Girobank 400m
4. Parcelforce World Wide 45m
5. BT Gills) 40m
6. Driver & Vehicle Licencing Agency (Tax Discs) 35m
7. National Savings 22m
8. BBC (TV Licence Renewals) 11m
Other clients include:
Most Utilities for Bill Payments/Revenue Collection
(e.g. British Gas, Eastern Electric, etc.)
Most Local Authorities for Rent payments
*Excludes stamp sales which are accounted for by value not volume.
2.2 Personal Banking
POCL performs personal banking transactions for Alliance & Leicester, Giro,
National Savings, Co-op Bank, and Lloyds/TSB. The transactions are typically
simple deposits or withdrawals on current accounts - using a paper based process to
log the transactions on behalf of the client. The associated papers (cheques, deposit
documents, and withdrawal documents) are processed by the client at their own site,
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and this typically allows transactions to be ledgered within 3-4 working days. The
extensive use of paper and manual processes in the system inevitably means that
POCL have a high cost per transaction. This 1s passed on to their clients The
Personal Banking market is moving to electronic, card based transactions for
deposits and withdrawals. If POCL is unable to remove the costs and reduce the
timescales associated with paper based transactions, it will lead to their products
becoming less competitive, resulting in reduced transactions across the counter and a
drive within the client organisations to utilise other, more cost effective channels to
market.
That said, with the introduction of Horizon POCL can replace their paper based
offering with automated products which are low cost and deliver information
accurately and to short timescales. Current trends in this market would suggest that
this can be a highly successful area of growth for POCL. Retail banks are closing
branches and re-structuring their operations around sales offices, direct mail and
telephone sales. Simple deposit and withdrawal transactions clutter up their retail
sites and do not offer a good source of sales for their other, more profitable financial
services. On that basis POCL, with its large, fixed network can represent a cost
effective channel for all the banks and building societies to use for the completion of
these simple transactions and to maintain their presence in the community.
2.3 Bill Payments And Family Budgeting
POCL currently handles hundreds of millions of bill payments each year, and is
seen as the natural home for bill payments by many sections of the community. In
particular, people find it easy and convenient to make regular payments towards
their bills each time they go to the Post Office to collect their benefits. An example
of this might be:- collect benefit; pay gas, water, electric, telephone, rent, cable TV;
and contribute to savings account all in one session at the Post Office. In this way
the customer can take care of all their regular household finances in one place and be
given a physical receipt which is so important to many sections of the community.
This ability to make small, regular payments (weekly, fortnightly, etc.) is seen as a
vital budgeting tool to many sections of the community and is forming the basis of
significant transaction growth for POCL over and above the transactions from
quarterly bills. Utilities spend significant funds handling customers who get into
difficulty with their bills, and a court case for disconnection does not help either
party.
On that basis, the utilities are keen to establish payment methods which will help
their customers manage their bill payment commitments more effectively.
However, POCL’s current network only supports electronic bill payments in 6,000
outlets which means that many bills are still expensive, time consuming paper based
transactions. Accordingly, this market is under competitive threat, and many Post
Offices are starting to lose transactions to alternative, automated outlets. Pathway
can help both the customers and the utilities by offering electronic bill payment
facilities at all 38,000 counter positions leading to reduced costs and shorter
notification timescales for the utilities, which will encourage the wider promotion of
these budgeting tools by the utilities to their customers.
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In this way, POCL will help utlities and customers manage their debt management
problems while significantly increasing the volume of transactions at the counter.
2.4 Multiple Channel Management
The Pathway infrastructure will enable POCL to offer channel choice to both
customers and clients, including existing and new commercial clients and all relevant
government departments and agencies.
POCL currently offers services via only one channel, the 19,000 Post Offices. This
channel is under threat from the new multimedia services from many new entrants
into the services marketplace.
To provide a total channel and customer management service, POCL must also be
able to communicate with customers via:
physical outlets (Post Offices)
kiosks (in Post Offices, Libraries, shopping malls, other retail sites, etc.)
Web and Web TV (the Internet and digital TV)
+
+
+
@ call centres.
In the same way as POCL provides physical outlets for these clients and a one stop
shop for the consumer, POCL can grow its role using Horizon to provide these
additional channels to their clients, whilst continuing to provide a one stop shop for
customers who prefer or need personal face to face service
This offers a number of benefits. If all government agencies attempt to set up their
own channels, the government may have to fun 4 huge separate networks, and the
consumer will become confused: e.g. 8,000 kiosks for employment services and
potentially another 8,000 kiosks for DVLA. A competitively priced “managed
service” would mean major cost savings to government departments and is directly
in line with the government’s wishes to share and maximise infrastructure usage.
The Post Office will be able to offer:
¢ Consistency - government agencies will be able to define their products
once, and know that they will be offered consistently over many
channels to their customers.
¢ — Choice and social inclusion - Citizens will still be able to choose the
channel they wish to use and have all the convenience of a one stop shop
that POCL currently provides in the High Street.
¢@ Economy - the government will be able to minimise the investment
required to create the channels necessary in delivering the vision of
Better Government and Government Direct; optimise the operating
costs since these channels will be operated from the same systems
management service; and maximise return from its investment.
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3. Process Improvement
3.1 Cost reduction by re-engineering
The majority of POCL’s transactions are paper based. This means that they are
expensive due to the paper processing and manual data entry costs, and that the
information flows take up to four days to get from the counter to the end client
Horizon will enable the majority of transactions to be processed electronically, have
the data captured by the system at the counter, and be capable of providing
information to the end client within seconds of the transaction being completed.
This will cut significant elements of cost out of the end to end process for clients
whilst allowing the clients to better manage their customer relations (e.g. utilities
can avoid disconnecting customers who have paid in the last few days).
POCL could significantly reduce the operating costs of many of the government
departments, whilst improving the service to the end customer of these government
departments (BBC, National Savings, DVLA, etc).
As in the banking market, if POCL is unable to remove the costs and reduce the
timescales associated with paper based transactions then this will lead to their
products becoming less competitive, and a drive within these government
departments to utilise other more cost effective channels to market.
3.2 Adding Value
Currently POCL is limited by its paper based systems to focusing on a transaction
based relationship with its clients. Horizon will bring the flexibility to help POCL
expand their role and work in partnership with their clients to become a key player
in delivering the clients mission and objectives, and to build their role as a valuable
communication channel between 300 clients and 28 million customers. Examples of
this include:
@ Having client selected, context sensitive information prompts displayed
on the screen for clerks to read out to the client’s customers when a
product is selected, e.g. “The National Savings special bond has increased
its interest rate by 1%, would you be interested in more information?”
¢ Printing client selected, context sensitive information at the bottom of a
customer’s receipt, e.g. “Did you know that if you had paid your bill
within 5 days you would have qualified for a 5% discount?”
¢ Helping clients understand their customers (Precision Retailing) by
providing them with an analysis of customer sessions involving their
products, e.g. ‘Every time that a Gas bill is paid, 80% of the time an
electric bill is also paid, and 30% of the time the customer also collects
their benefit.’
¢ Providing accurate, up to date first line help for customers to reduce the
level of calls and letters to clients.
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4. Better Government
The Pathway infrastructure has a unique combination of attributes which offers the
opportunity for significant exploitation associated with:
@ =~ Fraud reduction
¢ Welfare reform
— Better Government (government.direct)
These attributes include
Nationwide coverage
End to end security
Smartcard terminals with associated Card Management Systems
Data centres with access to DSS, POCL and commercial organisations
rf ee ©
Ease of expansion to additional outlets by making use of the telecoms
networks.
4.1 Fraud Reduction
The Pathway system can be further utilised to tackle other areas of benefit errors
and fraud over and above that directly associated with encashment fraud. Specific
examples include:
¢ Housing Benefit: the provision of Housing Benefit information exchange
between DSS and Local Authorities may allow matching of data to be achieved.
@ Information collection: the Post Office network offers an ideal point of collection
of change of address and additional verification information.
¢ Entitlement fraud: it is feasible to use data within the Pathway system to provide
DSS with improved targeting of fraud investigation. This would be achieved by
means of:
@ additional analysis of existing data to: e.g. match NINOs to addresses and
vice versa; track beneficiary encashment patterns; aid with surveillance
activities;
¢ data matching with commercial databases to verify details and identify
mis-matches. The databases involved could include Electoral Roll, GB
Mailing, Royal Mail re-direction register, telephone directory.
The types of fraud that would be targeted include multiple / fictitious identity,
residency, working while claiming, cohabitation, substitution. Ultimately it would
be feasible to develop additional fraud management tools, including risk scoring and
profiling, and a messaging system to warn Post Office Counter clerks of suspect
persons and provide digital photographs to aid identification.
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4.2. Access to Government
The machinery of Government, both Local and Central, has been developed to
serve the administrative needs of government departments and as such is aligned
with the business objectives of those organisations, with vertical applications and
silos of information in each department ‘This legacy has inevitably led to systems
that are not organised for the convenience of the citizen. A citizen has to visit many
departments or agencies to fulfil even straightforward interactions with government.
For example, the newly unemployed must visit up to six departments, the single
mother seeking work up to seven, the ycung adult wishing to set himself up in
business up to eleven When one adds inc'ustry and commerce to the list then the
waste of effort and time for the citizen, for business and for government becomes
immense.
ICL has designed a solution which offers a rapid amelioration of the situation whilst
the essential re-engineering of the machinery of government is undertaken. Called
CAFExpress™ - to suggest a citizen friendly and rapidly implementable concept - it
provides a single information and transactions point for public services, giving
entitlement advice, even formulating an action plan for the citizen. CAFExpress~ is
citizen focussed and is driven by life episodes, such as unemployment, self-
employment; birth, death & marriage; starting, changing and finishing school;
licencing; health, housing and community care; and many more. The Post Office as
the traditional and respected hub of the community is an ideal location for access to
government services using the CAFExpress™ approach and the Pathway
infrastructure.
4.3 Government Information to Citizens & Local Business
The Post Office is perceived by the average citizen as the natural point of contact for
government. In times past most day to day citizen interaction was done at the Post
Office counter - National Savings, The Post Office Savings Bank, the Telephone
network were all operated by the GPO. Dog licences, TV licences, road fund
licences etc all were primarily transacted with the Post Office as the agent of
government. It is deeply ingrained into national habits.
To an extent the legacy of these arrangements remains. If one wants to get an
official form one’s first point of call is the Post Office - and many are still available
there. Post Office staff are still regarded as a source of information and guidance.
However there is a need to regenerate the Post Office image as a deliverer of
‘Service’ — particularly public services and to become capable of delivering
government services in entirely new ways.
With the network infrastructure put in place by Pathway for Horizon the
possibilities for widening the provision of information to the public open up. In
addition to all official forms, which could be distributed electronically and printed
or completed locally, many other forms of electronic information could be made
available within the Post Office or, by utilising the Pathway network, to
information kiosks in public locations. For example, guidance on regulations;
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expert guidance on benefits entitlements, Foreign Office advice to travellers; etc
could all be made available
Not only should the citizen be targeted but also business in the community,
particularly SMEs. SMEs are very interested in information about grants,
regulations and statutes; about world markets; the availability of and access to local
skills; about training and education; trading directories, containing information
about potential suppliers and customers; examples of best practice; local business
assistance; etc. All of these services may be delivered electronically by means of the
Post Office network.
The Post Office by exploiting the Pathway/Horizon infrastructure has the potential
for becoming the electronic ‘one-stop-shop’ for all governmental services.
4.4 Government information capture
e.g. Statistics collection and statutory returns
There are significant benefits to government departments if as many as practicable of
inward communications were to be in electronic format. Most of the statistics and
other returns to government departments and agencies are still sent in on paper -
particularly those from citizens and SMEs who have not yet invested in electronic
equipment The cost of processing all these inputs and the data preparation work
that is needed before they may be usefully used by the departments is an ever-
increasing cost overhead. Many departments and agencies have already recognised
this and many separate pilots and prototype systems are in place to start the
transition to electronic submission. Much of this replicated effort and cost incurred
by many departments could be saved by reuse of the Pathway and Horizon
investment in infrastructure. As the public sec. or specialist in communication The
Post Office is the logical organisation to manage communications to and from
gover! nment.
An additional benefit that Post Office has over other electronic means of
communication is its outlets and its staff. The average citizen and many SMEs will
need guidance. The Post Office have 70,000 counter staff who are dealing with the
public all the time, recognise the value of accurate clerical procedures and, with
expert guidance available through the Horizon terminal, are well placed to help
people and SMEs to access new services. Not only that, the Post Office will be the
first government agency to offer Certification Authority and Trusted Third Party
services, which will enable secure electronic transactions including the
authentication and notarisation of important documents or returns, providing an
electronic datestamp and receipt.
More prosaic services based on the network and of direct benefit to the citizen might
include:- the acceptance of motoring documents on behalf of the Police in response
to a ‘requirement to produce’; the payment of parking penalties to the local
authority or other fixed penalties to the local magistrate court; etc.
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4.5 Social Banking & Welfare Reform
An inevitable consequence of the increasing movement towards a cashless society is
the social exclusion of those citizens who do not have a bank account and who
prefer to deal in cash. High street banks primarily attract and are mainly interested
in those with a regular income or capital backing. They, quite naturally, seek to
maximise the return on their investment in retail banking by extension selling of
financial services. Their services are tailored to this market and their products are
not, in general, aimed at the C2/D/E socio-economic groupings. One of Post Office
Counters’ declared aims is to provide socially inclusive electronic commerce via the
Post Office.
The Post Office is well placed to offer ‘social banking’ to the cash minded and
socially excluded sections of the population. Social banking matches well with
POCL’s brand values of security, trust and integrity. Already the individual may
pay his utility bills, television licence etc through paper, magnetic strip card and
smart card based payment schemes operating at the Post Office counter. Work is
well advanced in Pathway in creating a new family budgeting service which will
allow customers to make regular small payments towards their bills when they
collect their benefits, providing, in effect, a direct debit for the cash minded. In this
way the Post Office will not only be paying people their benefits but also providing
them with tools to help them manage their finances. This family budgeting service
will provide many of the benefits of a full social banking service, and provides a
natural migration path for cash minded customers towards a comprehensive social
banking service in due course.
In addition to bill payments services for regular bills etc, the social banking service
would enable contributions to savings in an ISA and to personal Stakeholder
Pensions by transfer into a personal account. The Post Office counter not only
provides a socially inclusive access point for these services but is staffed by
individuals who, supported by on-screen advice, can help the public to choose the
most appropriate products for their needs, providing personalised information and
service. Post Office Counters already provides information to customers on many
financial services including insurance for holidays and travel.
Traditionally, people have used their benefit books as a savings mechanism whereby
they can save payment foils until they have enough to pay for particular events. The
new Benefit Agency rules require customers to collect all the benefits which are due
when they go to a Post Office. In this way a key, often socially excluded, section of
the community will have lost a valuable budgeting tool. A family budgeting and
social banking service can replace the practice of ‘holding back' benefits as a form of
saving to ensure that this section of the community continue to have the financial
tools they need.
In the longer term, Social Banking needs a smart card for each individual - a
potential Citizen SmartCard, or a Post Office Service Card. This card may be
useable by other government departments. Not only would the Citizen SmartCard
record cash or benefit entitlement, it could also record other social welfare or
educational benefits ‘in kind’, for example Training Credits etc.
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4.6 Government Services in the Community
Asa result of its research into the requirements of the community (in the South
Bristol area, for example, which involved SMEs as well as education and the general
public) ICL is aware that there is little perceived end user requirement for
‘Government’ information. In order to successfully attract the target group,
government services will have to be part of much broader set of local services which
are attractive. A great deal of pioneering work in these areas is already under way in
the local communities. These initiatives often include the Local Authority, local
Education groups, local business - the Business Link and TECs - and so on. The
Post Office could work in partnership in the local community, adding to the jigsaw
of services expected by the general public and offering its ‘reach’ - both geographic
and social ~ to the enterprise. It can help the local authority to extend the
neighbourhood office concept to every part of its area.
Pathway can also provide the secure and managed infrastructure to these local
networks and the links to central government clients and indeed many other
commercial clients to the added benefit of the citizen.
4.7 European Projects
Pathway with Horizon establishes a national network capable of extending the
benefits of many local European funded initiatives to a National level. Some
examples are the ‘teletalk’® application in the London Borough of Lewisham, the
“Smartcards for Life’ project in Newcastle, funded under the DGX111 IADS
programme. ICL’s involvement in the EU ‘SPACE? project for a ‘Single Point of
Access for Citizens in Europe’ has demonstrated the requirement for citizen centric
services and access to Social Security, Tax, Driv:>r & Vehicle Licensing, and
Healthcare information for pan-European migration. Many of these types of
services are applicable to UK citizens and could be delivered through the Post
Office. Pathway can provide the spine that links these islands of enterprise to the
greater benefit of many more citizens.
The corollary is also true, the successes of Better Government will also be applicable
in the other Member States. The UK may well be able to show a lead and offer its
expertise, a showcase for electronic democracy and better government.
5. Infrastructure
5.1 Multi-channel
The Pathway infrastructure and architecture have been designed to fully support
multiple delivery channels and thus Horizon may be enhanced to provide new
outlets, for example kiosks, call centres, Internet access for home PCs and TV set
top boxes, etc.
ICL are established leaders in creating and managing these channels for clients:
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physical outlets: - the UK National Lottery network supplied and
managed by ICL for Camelot
¢ kiosks - the kiosk networks operated by Nationwide Building Society
and by BT (TouchPoint) were created by ICL
¢@ Web: - the BBC’s On-Line internet web site is a great example of ICL’s
ability to create and operate a successful commercial website
¢ call centres: - ICL creates and operates many state of the art call centres
for both internal use and for their clients such as Microsoft.
All these are demonstrable by ICL today.
In effect each kiosk, web site, or call centre seat is treated by ICL in the same way as
Pathway and Horizon treat each individual Post Office outlet. Accordingly, the
creation of these channels is similar to adding additional Post Offices to the Horizon
network. On that basis all the channels could be managed by the same systems
management services and the same underlying infrastructure.
5.2. Help Desks & Call Centres
ICL Pathway provides extensive help desk services for use by both customers and
postal clerks. These help desks are linked in directly to the Horizon system, thereby
allowing full help desk, call centres, and customer management services to be easily
and inexpensively integrated into other initiatives that take advantage of the
Horizon infrastructure. Projects may be expanded to support the customer more
fully, while avoiding the prohibitive costs associated with setting up the
communications and database infrastructure that would normally be required to
provide these additional services to the customer.
6. Smart Cards
In addition to the Citizen SmartCard or Post Office Service card described above,
once the Pathway system is implemented then the biggest estate of smart card
terminals and readers in Europe will be in position together with the card
management systems to support them. Smart card management enables the secure
issuing, tracking, backup and replacement of the card itself together with the back
office and management processes associated with a secure smart card network.
Pathway will have put in place the infrastructure to make smart card services a
commercially viable option for many new government and industry initiatives
which previously would have had to fund the large costs of purchasing and installing
a smaller smart card terminal estate (or accept a reduced specification, non-smart,
solution for their initiative). This capability could be deployed to the benefit of
many other government departments or agencies at a marginal additional cost, re-
utilising existing investments fully in line with the government’s declarations and
ambitions for the Information Society.
Smart cards will be used increasingly by the general public until they become as
ubiquitous as credit and debit cards are today. Many of these uses are within the
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areas of public administration and electronic commerce. The Post Office can
provide an ideal focus for these type of card services either as an issuer in its own
right or as an agent for other organisations, in particular government departments
and agencies. Some of these might be:
°
Electronic Signature and private key card (within a Public Key
Infrastructure PKI): as a Trusted Third Party the Post Office can offer its
services as a trusted Certification Authority for electronic commerce and
the issue of public and private encrypted keys. In turn it may set up
POCL post offices as Local Registration Authorities (LRA) which can
issue private keys, held on a Smart Card, to anybody who might need to
have a digital signature. This will in time include not only businesses
involved in electronic commerce but everybody who wants to sign an
official electronic document.
Government Services Card: a Citizen SmartCard, which may include a
digital signature, but which also contains the individual’s entitlement to
government services, from benefits and pensions to concessions and
credits, and licences.
Travel and Transport cards: as transport becomes integrated, the driver's
licence might share a Smart Card with the MoT certificate, the insurance
certificate, as well as the train or bus season ticket, combining fixed
information with rechargeable credits for public transport - rechargeable,
of course, at the Post Office Counter and via the Electronic Post Office.
Local Community Cards: cards issued by local authorities at the Post
Office and managed by Pathway on behalf of the local authority. These
cards are already in use in more enlightened areas. Many more local
authorities would like to provide the same facilities but are daunted by
the start-up and operational costs. Pathway and Horizon can help
contain those costs by the economies of scale and national coverage
which they offer.
Post Office loyalty cards: to encourage more use of the local Post Office
and therefore to help with the cost justification of maintaining national
coverage through rural offices.
Healthcare cards: containing the NHS number, GP identity and non-
clinical or emergency medical information; for example known allergies,
current drug regime, organ donor details, etc.
Education Card for school and lifelong learning: used for training
credits, examination results and qualifications, school meal entitlements,
travel concessions etc.
The advancement of smart card technology, in which ICL is a leader having supplied
25% of the world’s smartcard systems, now allows some or all of these facilities to
be combined on a single card.
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7. Further Opportunities
The following are some of areas which may offer further, significant opportunities
for the Post Office and local and central government to capitalise on the investment
and infrastructure of Pathway.
7.1 Secure Electronic Mail and Messaging.
The advent of the Internet has accelerated the usage of electronic mail ~ one of the
most used Internet features. This can be a mixed blessing. Although electronic mail
brings speed and immediacy to communications it lacks most of the attributes of
paper mail, such as authentication, guaranteed delivery or relative safety from
tampering. For this reason, when important issues are at stake the email is often
followed by a paper copy of confirmation. In addition, peer-to-peer electronic
communications do not pay VAT, thereby representing a growing loss of revenue to
governments.
The Post Office in its role as the national universal postal service supplier and,
building upon the pioneering work of RelayOne, could provide an
electronic/hybrid mail service that restores all the values normally expected from
the Post Office. These services include a reliable delivery service; recorded delivery;
registered and insured delivery; notification of delivery and reply request; date
stamping and receipts/proof of posting; and - as a certified Trusted Third Party -
notarisation of important and official communications. It would also be possible to
charge VAT on these value-adding services, anticipating the European Union’s
policy on electronic communication.
The RelayOne service, which addresses the delivery end only, could be extended to
appl: to the whole mail communications chain ie clearance, sorting, transport and
delivery applying X.400 standards to enable the value adding services. This service
could be based upon the backbone managed network infrastructure established by
Pathway, overlaid with an X.400 standard electronic mail service.
7.2 Directory Services
Based on the existing PO investment in i500 electronic directory technology, the
Post Office could be the supplier of an on-line GSI Intranet directory of all
government departments (of the GTN and PSTN) and, in due course, a publicly
available directory of government electronic addresses and a national electronic
directory.
7.3 Name and Address File
The maintenance of a consistent and central national name and address file for
common access by all government departments could be based on the existing PAF
(Post Office Address File) - cross-checked against the electoral roll as many
commercial companies already do. This could also be made a publicly available
service on the Internet. If it became politically and socially possible, the name and
address could be encoded onto the Citizen’s Smart Card. In this way it could be
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regularly checked during usage and the central Name and Address file updated to
reflect any change The cost savings of having an accurate and consistent name and
address record for government departments are potentially large.
7.4 Home Shopping
In Sweden the national Post Office is an essential part of the home shopping chain.
Having made his or her selection and ordered by telephone, over the Internet, or
perhaps interactive TV, the customer arranges for delivery to his local Post Office.
The customer may then collect and pay for the goods or even arrange local delivery.
This service is of particular benefit to the socialy disadvantaged, the aged and the
infirm. The UK Post Office could emulate this initiative, provide ‘drop-in’ facilities
for browsing a catalogue and making selections, perhaps even extend it to include
local arrangements for secure or cold storage making use of local business facilities.
Pilot local schemes are in operation, and proving popular in Gateshead and in
Edinburgh. None of these currently involve the Post Office.
8. Summary
In summary, it is ICL’s view that the POCL Horizon programme in conjunction
with ICL Pathway offers unrivalled opportunities for commercial development for
the Post Office.
For Post Office the ICL Pathway Network will enable transformation and new
growth.
¢ It can provide better, faster and cheaper delivery of the current range of over 170
services for over 300 clients.
@ It builds a platform for winning new services business, for example ISAs;
personal and social banking in support of the government's social welfare
reforms; and Better Government initiatives in support of the Information
Society
@ The network provides the technology base for increased commercialism and
competition in the Post Office marketplace and opens the way for the
exploitation of the Electronic Post Office in the 21* century.
For Government, the Citizen and UK Plc the Pathway Network and Services
create a framework for the Information Society.
¢ Millions will depend on their local post office for access to the new services, thus
enhancing social inclusion.
Social banking, personal budgeting, ISA, Stakeholder Pensions are all services
which can all be added to the currently planned Horizon services.
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@ The Pathway smartcard network and card management processes will support
Citizen SmartCard issue, authentication and management.
@ Kiosk services will provide government and community information and
transactions with counter service support within post offices.
@ The Post Office Trusted Third Party status will enable secure public messaging
and commercial transactions.
¢ The Pathway and Horizon Services could be extended as appropriate to other
locations including libraries, town hal's, shopping centres, etc and could enable
access from home and workplace.
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