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TL ENTL
NATIONAL FEDERATION OF SUB-POSTMASTERS
REPORT OF THE
SPECIAL MEETING OF THE
NATIONAL EXECUTIVE COUNCIL
held on
11 JUNE 1999
at
THE REGENCY HOTEL
LONDON
REPORT OF A SPECIAL MEETING OF THE EXECUTIVE COUNCIL
held on 11 JUNE 1999
at The Regency Hotel, London
Present Mrs J Kendall, National President and Chairman
Mr I Abernethy Mr J Jannetta
Mr N Bradbrook Mrs. P. Jervis
Mr J E M Burford Mr C Jones
Mr A M Burrows Miss C A Lindon
Mr A R Butlin Mr H Morgan-Jones
Mr M Challinor Mr J Peberdy
Mr M Darvill Mr P Walsh
MrR Edmondson Mr J Willshaw
Mr B G Ingham
In Mr C Baker General Secretary
Attendance: Mr K Davis Assistant General Secretary
Mr P Heasman Assistant General Secretary
Mrs K Davis Research Officer
Apologies: Mrs P Jenkins
Mr D Marshall
THE CHAIRMAN welcomed everyone to the meeting, thanking them for
attending. The meeting had been convened in order to provide the
opportunity for the Executive Council to question the views of Mr Stuart
Sweetman and Mr Dave Miller on the announcement concerning the Horizon
Project, and the implications for the future.
4
Executive Council members had submitted questidns which they wanted to
be put to Mr Sweetman and Mr Miller. These had been collated by the
National President, the Chairman of the Negotiating Committee and the
General Secretary and encapsulated into ten questions, which would be
asked by various members of the Committee.
THE GENERAL SECRETARY referred to his meeting with Mr Stephen Byers,
Secretary of State, at the Department of Trade and Industry advising how it
had come about. Mr Byers had personally telephoned the General Secretary
on the Thursday after Annual Conference to say that a solution had been
found, which was to be announced the following day. This solution was what
had become known as ‘Option B3’. Mr Byers described it as ‘Benefits Agency
remaining until post offices are automated and money from Government’.
The only other option had been to jettison the whole affair. The Post Office’s
SPECIAL EXECUTIVE COUNCIL MEETING - 11 JUNE 1999 PAGE 1
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press release had welcomed the announcement. The only negative response
had been the Federation’s press release and as a consequence Mr Byers
wrote to every member of Parliament, on 27th May, making reference to the
National Federation of Subpostmasters.
An Horizon Working Group was set up and on Monday 7th June the General
Secretary received correspondence convening a meeting the following
morning. This was to take place immediately before the meeting with
Stephen Byers, although the two meetings were not linked. The Working
Group had been chaired by lan McCartney MP, Minister of State.
During that meeting, where the Post Office were forced to be very open, the
Terms of Reference were changed at the Federation’s behest. The group
would be overseeing the negotiations between ICL Pathway and ICL and the
Benefits Agency. It would have the power to call anyone, 10 Downing Street,
ICL, the Benefits Agency and anyone else they needed to call to make sure
the Option B3 was whole. ‘We took the challenge at that meeting and
claimed it as our own,’
MR PEBERDY, Chairman of the Negotiating Committee, advised that Mr lan
McCartney had acknowledged the importance of the meeting by saying some
of the things that the General Secretary had eluded to. It was a working
group to resolve difficulties, all with the same status, and this Group had the
full backing of the Government.
THE GENERAL SECRETARY reported that the meeting with Mr Stephen
Byers had been extremely positive. They had been able to set out the
concerns that the Federation had, and explain why those concems existed. It
was emphasised that the Federation represents all subpostmasters, Rural
and Urban and when ‘villages’ were referred to it was the Urban Village.
Subpostmasters had a £1 billion investment and they would fight to protect it.
Mr Byers had been asked specific questions at the meeting which are
detailed below together with the answers given.
Question 1
4 What does your press statement mean?
+ What is ACT at Post Offices?
4 How far has it been thought through?
From 2003 the Benefits Agency will start to expect all claimants to have a
normal commercial relationship with a bank or building Society and, moving
benefit by benefit they hope to have completed the exercise by the year 2005
meaning all beneficiaries will be channelled by ACT into a bank your building
society account, but that deals will be done by POCL with these banks and
building societies to enable bank customers to access their cash at a post
office. This would mean non benefit payment bank customers could also use
the post office to draw cash.
PAGE 2 SPECIAL EXECUTIVE COUNCIL MEETING - 11 JUNE 1999
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Question 2
¢ Will the Government commit the DSS to remain with the Post Office until
the system has been completed and contracts with the banks signed?
This will be an objection of the DTI. The Secretary of State made a firm
commitment that the DTI were not going to walk away from the Network.
Question 3
Have you considered the claimants, are they going to be:
¢ forced to have bank accounts? I
¢ forced to remember pin numbers? I
¢ forced to pay bank charges? :
What about those on Income Support?
The banking world is changing and the relationship between banks and their
customers is also changing. The question of forcing people to have bank
accounts and the way which this will work in the future will be one of the
issues which will be addressed by the Working Group under the minister, lan
McCartney. The Secretary of State clearly signalled that this is something
that he expects the Working Group to resolve.
Question 4
¢ How will the banks cope with Horizon handling all transactions when they
are now reducing their own Networks and branches?
¢ What other Networks are envisaged will be used and what will be the
Post Office’s share when all that is in place?
The answer to this question was that he felt he had covered the majority of
the questions in previous answers but he went on to stress that within the
White Paper there is a clear commitment for the Government to use the
automation platform in post offices to get people into these post offices. The
Secretary of State, with the Network, was ideally placed to get this new
Government work which he felt should compensate for the loss of work due to
the introduction of ACT. He also felt that this would be a matter for the
working group to give serious consideration to.
Question 5
¢ What will be the size and shape and viability of the Network?
¢ Would the Government consider compensating, both financially and with
additional work, if required?
SPECIAL EXECUTIVE COUNCIL MEETING - 14 JUNE 1999 PAGE 3
This question was accompanied by an explanation of the public/private
business relationship, the effect on footfall.
The Secretary of State would not be drawn to answer this question, saying
that he could not commit the Government to being able to establish the size
and shape of the Network or compensating subpostmasters three years in the
future. He felt that the breathing space between now and 2003 should enable
the Network and The Post Office to be in a position to meet the challenges by
the time that they present themselves.
Question 6
¢ What does the future hold for subpostmasters?
¢ What hope can you give them if 30% of their work goes? The loss of
work equals loss of post office. Do you remember the last public outcry?
The Secretary of State felt that the future was good for subpostmasters but
did accept that loss or work would equal loss of post offices and he fully
understood that we were reserving the right to mount an ACT campaign,
should that be necessary. He in fact said ‘you may want to do a campaign
later on’. He said that it was up to us all to create the right environment to
use the automation platform for accessing the modernisation of Government
plans, that there was a huge potential there which had not been tapped yet.
Question 7
¢ How much subsidy is the Government paying into this and, if necessary,
how much more will you pay in to further fund this proposal?
This question was accompanied by a statement that subpostmasters with
their struggling viability would not be able to make any further contribution.
£480 million, He would not be drawn into saying how much more the
Government would pay in the future but again repeated the statement that the
DTI would not walk away from the Post Office Network.
Question 8
¢ What impact will the out sourcing of the Benefits Agency work have on
your commitment to keep the Benefits Agency ‘at the party’?
« Will the Government be able to control the aggressive American
company which has obtained the contract?
It was the Secretary of State’s view that the out sourcing of the Benefits
Agency Central Network would not in any way affect these proposals. That
they could control the aggressive American company If need be but that
PAGE 4 SPECIAL EXECUTIVE COUNCIL MEETING - 11 JUNE 1999
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payment by ACT was not dependent upon having a fully completed CAPS
System in place.
Question 9
¢ With the savings now being generated by OBCS do you need to go down
the ACT route?
The Secretary of State was firm in his view that the Benefits Agency wanted
ACT and that even if the Horizon Platform had rolled out in the way it was I
originally intended, the contract with the Benefits Agency would still end in
2005 and it was their declared intention at that time to move to compulsory
ACT having used the intervening period as a means of encouraging people to
opt for ACT.
Mr Sweetman & Mr Miller joined the meeting.
THE CHAIRMAN welcomed Mr Stuart Sweetman, Chairman of The Post
Office, and Mr Dave Miller, Counters Finance Director, to the meeting. She
hoped that there would be a full and frank exchange of views and looked
forward to their presentation. When the meeting was finished she hoped
there would be a true partnership between POCLand the Federation.
MR SWEETMAN thanked the Chairman for the invitation to met. He I
introduced Mr Miller who had two roles. He was the existing Role Programme I
Director of the Horizon Programme, a position he had held since the
beginning of the previous year, and Managing Director of the new Post Office
Network Business Unit. In the latter role he would be responsible for all
things to do with the Post Office Network and the interests of the Federation
and its members, MR SWEETMAN's objective at the meeting was to try to
bring the Committee up to date, from his point of view, on the path they had
to tread, and the route that POCLand the Federation must travel together if
they were going to be successful in partnership.
MR SWEETMAN explained the options which had been considered in
reaching the one that was now known as ‘Option B3’, with the use of slides.
{Appendix i).
Automation would continue. All the central payments and communications
would go into the post office but there would not be a Benefits Payment Card
on that system. Benefits would be paid by bar coded savings books. The
contract would run until 2005 by which time benefits would only be paid by
banking system or emergency Green Giros. The contract with ICL would
change from PFI transactions, only going through the system to one where
The Post Office effectively purchased the system from ICL Pathway.
The other option had been to terminate the contract with ICL Pathway and the
Benefits Agency. If POCLhad refused to sign the deal with ICL Pathway,
SPECIAL EXECUTIVE COUNCIL MEETING - 11 JUNE 1999 PAGE 5
A.C.T. would have been introduced in 2001 and not 2003. The Horizon
solution would need to be introduced into the Network. It would then be
necessary to find another supplier and find the money to provide it, thus
causing a delay of 2/3 years.
Questions put to Mr Sweetman, and answers given
This is the A.C.T. which we have fought against before, and our customers
supported us. Why did you agree it on our and the customers’ behalf without
referring to us?
MR SWEETMAN described it as ‘a fait accompli’. He did not support ft but
had to acknowledge it as a fact. Alistar Darling decided A.C.T. would become
a reality, and the DSS had wanted it since the early 90's. MR SWEETMAN
advised that he had not agreed to it, but had acknowledged it as a fact. He
had not been asked to agree to it, but asked to co-operate, to which he had
said that he would find it very hard to convince subpostmasters. He totally
disagreed with it.
What will be the resultant loss of Benefits Agency work to A.C.T. and other
Networks?
MR SWEETMAN replied that at the moment the total income the Business
received from the Benefits Agency and the Northern Ireland equivalent was
just over £400 million per year. That would go down to a minimum of Green
Giros for people who were unable to get bank accounts, to zero by 2005.
This represented 35% of total business income.
i
What plans do you have to:
a) become a bank? \
%
MR SWEETMAN referred to the ‘New Vision’ slide. They had examined the
possibility of becoming a bank but decided they did not want banks as
competitors but as collaborators and allies.
b) combat the threat?
It had been intended to take about 5 years to do deals step by step with all
the banks and building societies. Banks with large networks found that by
closing a branch they could save £% million per year and POCLwanted a
share of that saving. Any deals agreed which would provide a share of that
saving had to be done over the next 2 years to allow them to be completed by
the time A.C.T. came in. People would then be able to continue to get their
cash because the new accounts would allow them to do it through post
PAGE 6 SPECIAL EXECUTIVE COUNCIL MEETING - 11 JUNE 1999
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a
offices. From 1st July work would commence with a view to creating this new
business unit. These details now needed to be relayed to Government
Departments, Local Authorities and the new National Government Parties in
Scotland, Wales and Northern Ireland. MR SWEETMAN emphasised the
necessity for new Government business and banking business and if all went
well, he thought the loss situation could be recovered,
c) Secure other work/income for the Network?
This had already been addressed.
d) Reduce your costs?
MR SWEETMAN advised that POCL had been paying a high amount of
attention to their overheads over the last year to 18 months. This was
ongoing with the decision to move from 7 regions to 3 territories, which would
take a lot of the overheads out. He estimated that costs would be reduced by
13% over the course of the next 5 years.
In response to MR EDMONDSON’s question concerning the possibility of
compulsory redundancies, MR SWEETMAN advised that everything possible
would be done in order not to resort to that. The number of employees would
decrease and there would be a lot of redundancies at managerial levels over
the next 2 months. He further commented that compensation for outlet
closures was something on which they had existing arrangements which
would need to be reviewed and could be vigorously discussed together. This,
THE GENERAL SECRETARY said, was already in the pipeline. Mr
Sweetman was asked what changes were going to be made on this decision.
MR SWEETMAN saw it as an acceleration of those plans and the robustness
of the vision over the next 10 years was sustained in it. He did not think there
would be any big changes to this direction. If banks were rushed, he
considered they would get a worse deal than a long negotiation would raise.
The banks would compare Post Office Counters’ costs with that of their ATMs
who were aitering their cost ratios and would pay the least they could get
away with. MR MILLER felt that the key was to A.C.T. and what could be
done to move the A.C.T. date from those talked about. Both POCLand the
Federation had a keen interest to do this, and it was fundamental to do it.
How will this decision affect the agreement that subpostmasters will not have
to pay for the automation of their offices?
MR SWEETMAN advised that there were no plans to change this agreement.
A lot of subpostmasters were giving up their own time time and that of their
assistants, and POCLconsidered this to be their contribution. This did not
necessarily mean that a contribution would not be requested, but currently it
was not the line that they were thinking of. The aim was to automate 300
offices per week and in order to do that it was necessary to have the co-
SPECIAL EXECUTIVE COUNCIL MEETING - 11 JUNE 1999 PAGE 7
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operation of subpostmasters to gain confidence to the Business and existing
and proposed clients. ‘
MR MILLER further explained that they were in the process of a ‘live trial’
running the software in 300 offices. if that was done successfully by the end I
of July they would be looking to start a national roll out in the third week in I
August. This would be built up at a relatively low rate to Christmas, when
they would review how the offices on the system were working. It was I
probable that there would be around 2,000 offices operation by Christmas I
and it was estimated that by around 10th January 2000 they would start the
roll out at the full rate of £300 per week. Present indications were that this
timescale could be achieved.
MR BUTLIN referred to the serious problems that the South West was having
with the software, especially with the balance, and asked Mr Miller whether
any changes were to be made in that respect. An assurance was sought by
the Committee that the balance would become more user friendly, more
logical and easier for subpostmasters to use. Would it be possible for
subpostmasters to have more input into the way the balance was done. The
North East was facing similar problems, subpostmasters were incurring
additional staff costs, an example being around £350 in the four weeks that
his office had been up and running.
can
MR MILLER acknowledged that there was a problem and said that there
would be a software change to improve the situation. If there were serious
problems that could not be overcome in the timescale the roll out would be
delayed.
Is the automation of every office still a reality, are we facing a Network
review? Do you anticipate subpostmasters will remain viable and is there
really a future for subpostmasters?
MR SWEETMAN advised that it remained Post Office Counters’ intention that
the whole of the Network would be automated. He did not consider a two tier -
Network to be workable. However, he was not at this stage able to say how ¢
big the Network would be. The extent and the nature of the Network would
need to be examined taking into account the number of branch offices,
franchise offices and all forms of outlets. It was necessary to establish what it
meant in definition terms. He thought it may be determined by what
percentage of the population lived near a post office. The politicians had
never defined what a Network was and MR SWEETMAN believed that this
would be left to a regulator. Offices were being lost at a rate of 200 per year,
which couldn't be sustained. Every outlet needed to be viable and although
he admitted there would be fewer offices, MR SWEETMAN would not be
pressed on how many that would be. MR SWEETMAN urged individual
subpostmasters and Federation branches nationally to make it very very clear
to their local MPs the importance of retaining post offices, which were the
centre of their communities.
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MR MILLER gave his assurance that he would work closely with The General
Secretary, and The Chairman of the Negotiating Committee, and any other
person necessary, in order to achieve their objectives.
Does the S.C.S. model lead to The Post Office being able to become the
complete distribution company without the need for a Counters Network?
Does the Counters Business Unit really need a Network of Post Offices?
MR SWEETMAN replied that POCLand the Post Office Network was an j
integrated part of the complete distribution company. It always was and
always would be. This was not in doubt. However the nature of the service
would have to be changed but the whole Network of post offices would
remain an integral future of the post office for distribution.
It is reported that this is a £1 billion agreement. What does this mean? Who
pays what to whom?
The answer MR SWEETMAN said was to do really good deals with Lloyds
TSB in England, Wales and also with banks in Scotland. Dealing with many
other banks was the route to take.
In the light of the changes which will result, are POCL now prepared to {
discuss and agree changes to the restrictions in the Subpostmaster contract?
MR SWEETMAN, referring to the Federation and Post Office Counters, I
considered that divided they fell, together they would survive. It was in no
one’s interest to resort to a consortium in order to bring deals together. He
believed there was far more success in working together as a collective. That
was at the heart of the Network and at the heart of the majority of the
Federation’s members.
What happens if:
a) The Post Office cannot agree to the terms of the deal?
b) ICL Pathway cannot agree?
c) Automation is not completed by 2001?
a) MR SWEETMAN advised that the Heads of Agreement that he had
signed had stated that if by the end of July they could not agree a mutually
acceptable contract they would be paid £150 million termination fee and that
would be the end of it. POCLhad agreed with Government that if this
breakdown was not the fault of Post Office Counters, Government would
SPECIAL EXECUTIVE COUNCIL MEETING - 11 JUNE 1999 PAGE 9
make money available to them. If it was decided it was Post Office Counters’
fault then they would have to find the money themselves. There was,
therefore, a great deal of pressure on Mr Sweetman not to break down for
whim or convenience, but only if he believed it not to be viable. The Board
had decided that if the deal was not right or the best achievable, or was not in
the best interests of POCL, it could be worth paying the money and moving
on.
b) If ICL walked away there would be no deal.
c) If automation was not completed by 2001 and for example there were
1,000 offices to be implemented, then the back of it would have been broken
and the objective virtually achieved. Within the Heads of Agreement the £480
million was to be paid in 4 lump sums and 25% would be held back to pay for
the roll out as security. There was therefore a financial incentive to get the
roll out on time. Once the system was accepted and the monies paid then
POCLwere commitment.
He then spoke about the deadline of 16th July and being in a position to have
a legal document signed. Two dates had been given to Keith Todd but both
organisations must be totally committed to each other to do it. He said that in
a practical sense they would sign the document. He wanted to see more
evidence from the Government between now and 16th July (one or two more
meetings) that they were getting Government departments to focus on the
problems.
We have heard some detail this morning but we do need confirmation of what
will be on the new Horizon platform? For example:
Debit and Credit Cards
Smart Cards
Automatic Scales
Screen information for Royal Mail and other clients
The Post Office Smart Card
Dave Miller answered this question “off the record”.
MR SWEETMAN further advised that he had sent David Sibbick a list of
contracts and when they fall due. Ministers should not allow Government
departments or agents to them to take work away, and pressure needed to be
applied with avenues being opened in every other Government department.
MR SWEETMAN wanted these to be in place so that by 16th July he would
know that the Government would be behind it. He believed that this was what
Mr lan McCartney also wanted.
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THE CHAIRMAN thanked Mr Sweetman for attending, expressing THE
COMMITTEE’s appreciation of the way he had answered their questions.
She hoped he would feel free to talk to the Federation at any time.
MR SWEETMAN thanked The Committee for the invitation. He
acknowledged that there would be differences but that would always happen
in a relationship. However these would be talked through.
Mr Sweetman left the meeting. Mr Miller remained and answered further
questions put to him.
THE CHAIRMAN opened the floor for discussion and ideas for future plans
and policies. However, she emphasised that nothing needed to be cast in
stone at that time.
MR BRADBROOK had submitted two examples of ways in which clients were
presently able to pay their bills. The first was through Paypoint, the second
via Post Office Counters, where commission was taken. He believed that the
Federation should have its own Network to which the Benefits Agency would
have access. His view was that Government would ‘string the Federation
along’ for & years, as the previous Government had done with automation,
with nothing at the end of it. The Federation was losing between 37/40% of
work, as much as 50% in London and needed the power to find itself new
work, MR BRADBROOK felt that the way to do this would to become a bank
and if possible join with a building society, such as the Woolwich or
Nationwide, who he considered would themselves eventually become banks.
They had the infrastructure to advise the Federation of the footfalls. POCL
had no choice on the way forward, they were being dictated to by
Government. MR BRADBROOK described it as ‘political dynamite’ and
recommended that the Federation should ‘keep their powder dry’ and not get
involved at this stage with Post Office Counters.
THE CHAIRMAN's view was to give POCL a chance to sign the deal and go
forward from that point. She did not consider that it was their preferred
choice. That had come across during the discussions earlier that day.
Discussion continued, There were fears that if the Federation stayed with
POCL, more work would be lost and subpostmasters would eventually be left
with nothing. Therefore the best route would be for the Federation to do a
deal with the banks, or to set up their own bank.
MR PEBERDY agreed that other options must be explored and that there
were times when the Federation distrusted POCL. However, once the
contract was signed by POCL it would be irrevocable because if they pulled
away from it, to replace it could take up to 3 years.
THE CHAIRMAN and MR BUTLIN both had confidence in Mr Miller's
commitment to the Federation. He had told the Chairman that he was
prepared to meet with the Federation anytime, anywhere. MR BUTLIN did
not consider that there was any choice other than to stay with POCL and he
SPECIAL EXECUTIVE COUNCIL MEETING - 11 JUNE 1999 PAGE 11
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PROPOSED this course of action. MR JANNETTA agreed that to take any
other course would be nonsense.
MR BURROWS advised that the path the Federation had set itself had
already started and it was important to carry on and explore all the avenues,
and this could not be done from the outside. POCL had made their decision
and were expecting the Federation to ‘get them out of stook’. He saw this as
an ideal opportunity to lay the foundation for the future. If the Federation was
not involved, the Government would have the opportunity to say that the
Federation was invited in, but they walked away. The Working Group
included Government departments such as the Treasury and 10 Downing
Street and was something that the Federation had been trying to achieve for
years. MR BURROWS therefore recommended that the proposal be
accepted,
A vote was taken on the PROPOSAL that the Federation should stay where it [Decision I
was, to work with The Post Office rather than against. This was CARRIED.
Discussion followed on ideas for the way forward. ¢
THE GENERAL SECRETARY congratulated Council on the decision they
had made. To progress the decision and to lead the organisation was
important because it was the only chance there would be to keep the
business alive. He suggested Council consider a 4 part campaign:
4. To'stroke’ the customers. - To raise the awareness of the community
The priority was to keep the customers coming through the doors and
provide a good quality of service.
2. Tell non members that it is their hides we are fighting for.
This would take the form of a membership campaign, also making
POCL aware of the value of the Federation.
3. To continue the existing work with Government. ¢
That work produced the letter from Stephen, Byers to all Members of -
Parliament saying that they were involved [with the Federation in a
Working Group. Keeping Members of Parliament interested and aware
by sending people to the Sunday surgeries.
4. To launch an ACT campaign if this was necessary to delay ACT but not
to stop it. To delay it until automation was in place, until the deals that
banks were doing were complete and until sub post offices had
‘warmed’ their customers and non members were recruited. Then the
Federation would be ready. The right time to do this was when the
Party Political Broadcasts started and an election was about to happen.
That would be the time to implement campaigns 3 and 4.
MISS LINDON referred to the controversy concerning the plans for Horizon
and questioned whether the Federation was getting the package they
needed. She suggested that this, being negotiation time, was an opportunity
PAGE 12 SPECIAL EXECUTIVE COUNCIL MEETING - 11 JUNE 1999
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for POCL to talk to ICL Pathway about modifying and simplifying the package
before it was too late.
THE CHAIRMAN advised that Mr Miller had requested a list all the problems
with the software and he would address them and talk to subpostmasters to
see what they wanted on the programme. He was embarrassed that this had
not happened already.
It was important that members be advised immediately of the outcome of this
meeting and this needed to be done in a way that would make them aware of
the seriousness of the situation, without resorting to scare mongering.
MR BURFORD PROPOSED that the 4 part campaign suggested by the [Decision]
General Secretary be adopted and this was SECONDED and CARRIED. I
The Executive Council instructed the Publicity and Development Committee ACTION
to concentrate on items 1 and 2. It was important to make people aware of
the value of the post office and the customers even if it meant that the
Publicity and Development Committee jettisoned some of their present work.
They were to focus on this as a priority.
MR DAVILL sought guidance from Council for the way forward, or for some
ideas as to what they wanted. THE CHAIRMAN referred to their Publicity and
Development Committee meeting on the Sunday prior to the Executive :
Council meeting and hoped that some of the items discussed would appear
on that agenda.
It. was agreed that ideas from Executive Officers would be sent to Mr [Action ] i
Heasman, in order that they could be discussed at the Publicity and
Development Committee meeting.
MR HEASMAN, drawing on his marketing experience, cautioned that the
Federation was entering a different world to anything it had experienced
before. The campaign discussed, would need to be programmed over a
period of 18 months to 2 years. It would be a feontinuing and ongoing
process. Ds
# Non members felt that they had a right to their existing customers, they
must be made to question where their next customer was coming from.
@ The best way to get members was to knock on the door.
¢ Inform subpostmasters of a forthcoming meeting convened to discuss the
threat to the subpostmasters’ businesses, but advise that only members
will be allowed to attend and membership cards must be shown. Sign up
non members as they come through the door. However, care must be
SPECIAL EXECUTIVE COUNCIL MEETING - 11 JUNE 1999 PAGE 13
taken not to undermine confidence in the Federation and promoting the
fact that the Federation is representing members within Government
Departments was considered a good tact. “We have been invited to talk
to Government to develop your future.”
¢ Make people aware of the value of the post office and the customers.
¢ Federation logo to be printed on lottery slips.
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Irrelevant
¢ Educate Branch Secretaries to follow up such opportunities in getting
involved in their local communities, then the support of the public would
be there when needed.
Involve the Editor and Tim Cobb in the work of the Publicity and Development
Committee.
It was AGREED that members would be updated on the automation project
via a Branch Secretaries Circular. This would start the process of the
Branches calling meetings which members would have to attend In order to
get the information they sought.
In response to a request for guidance on what feedback Executive Officers
could give their branches, THE GENERAL SECRETARY considered that
everything that Mr Sweetman had discussed was in the public domain
with the exception of the specific figures contained in the graph used in
his presentation. He suggested that the line to be followed could be that the
Government appeared to have favoured ICL Pathway and allowed the very
expensive £1 billion contract to go to them, but THE GENERAL SECRETARY
considered this had saved POCL in that the Benefits Agency were going to
proceed down the A.C.T. line, but as this would not happen until 2003, it was
anticipated that the automation platform would be in place by then. In the
meantime the Federation would be active and everyone would have a part to
play: Individuals would be ‘stroking the customers’, branches would be
holding meetings and giving advice and Regions, Executive Officers and
Federation Headquarters would also be active. The aim would be to lead an
A.C.T. campaign before the next General Election should that be necessary.
There was no harm in members of the Government knowing what the
Federation's plans were. The Federation felt that subpostmasters had been
let down by the Government when the Benefits Card was jettisoned.
PAGE 14 SPECIAL EXECUTIVE COUNCIL MEETING - 11 JUNE 1999
THE GENERAL SECRETARY warned that to start a scare story that there
would be nothing for subpostmasters after 2002 would not do their
businesses any good. Members should be told that the Federation was on
the Horizon Working Group. Three meetings had already been diaried with
Mr McCartney and these would continue, with no end date.
An article would appear in The SubPostmaster as soon as possible “We feel
let down, we are going to fight.”
THE CHAIRMAN referred to questions submitted by MRS JENKINS in her
absence. Referring to the urgent communication sent by Mr Sweetman to all
subpostmasters, MRS JENKINS questioned why did the Federation not
decide to make contact with members and could the Federation find means of
doing so in the future if there was a matter of extreme importance?
THE GENERAL SECRETARY advised that the Federation had in fact
corresponded with every subpostmaster - it was on the front page of the
journal! Sending letters to each member was a very expensive operation and
had to be done sparingly. However that would be done when the time was
right.
THE CHAIRMAN closed the meeting, thanking everyone for their attendance,
and hoping that they had found it profitable. She hoped that the information
given at the meeting was the beginning of better news to come.
In proposing a vote of thanks to the Chairman, MR BUTLIN said that
everyone had been given an opportunity to air their thoughts, which was
appreciated. On behalf of the Executive Council he thanked the Chairman for
the way in which she had conducted the meeting.
LESLEY HARRIS G RO I
SPECIAL EXECUTIVE COUNCIL MEETING - 11 JUNE 1999 PAGE 15
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PRESENTATION TO
NATIONAL FEDERATION OF
SUBPOSTMASTERS
EXECUTIVE COMMITTEE
STUART SWEETMAN
DAVID MILLER
11 JUNE 1999 nas
TOPICS
¢ Horizon history
¢Options faced with
¢ The deal and potential
impact
¢What now?
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Slide 2
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HISTORY
° 1993 Anti-Act Lobby
* Joint Feasibility Study for BA Card
1994
¢ Procurement 1994/1996 - Contract
signed May 1996
* Original Plan Trial 1997. National
rollout 1997/1998
Slide 3
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HISTORY
e Many delays - Govt. Review Autumn
1998
¢ Concluded Programme was
deliverable but restructured deal with
ICL needed. ICL/POCL agreed. BA
didn’t
¢ Negotiations continued past
Christmas until May
Slide 4
ee.
THE OPTIONS
Option
A
BA payment
card
B1.2
Smartcard
Benefit payment
through POCL
account
B3
Automation
without payment
card
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BA Contract Pathway
Terms Contract Terms
To end 2007/08 To end 2009/10
Floor to end
2007/08 9 ———--- ~~».
To end 2004/05 To end 2009/10
Floor to end New prices
2002/03
To end 2004/05 To end 2004/05
Floor to end
2002/03
Slide 5
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a eS aie ee
THE OPTIONS
Option BA Contract Pathway
Terms Contract Terms
B3
Automation Floor to end
without payment 2002/03
card
Cc
Termination To end 2002/03 N/A
Floor to end
2000/01
Slide 6
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KEY ELEMENTS
*Compulsory ACT from 2003 - over 2 years
¢£1bn contract to Pathway
*No longer PFI
¢ Contract to run to March 2005
¢ Automation of existing ‘products, future product
development on time and materials basis
¢ Automated network
e“Hope of Ministers that the Post Office will be
successful in retaining and winning (Government)
business on merit”
Slide 7
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SIGNING THE DEAL
Board meeting held Sunday 23 May
Signing of agreement dependant on;
¢Post Office allowed to sell £480m of
investments
¢ Profit and EFL targets adjusted for this £480m
¢Proposed white paper freedoms to be
maintained
¢Option will lead to deterioration in the
financial position of the Post Office
Slide 8
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—e—Corporate Plan profit after intereat & before tex
200 f_._. mein pact of 83 (exc. £480m funding)
Revised Profit after interest & after tax
100
(100)
(200)
(300)
(400)
(500)
(600)
(700)
Corporate Plan profit after interest & before tax 31° 32 50 70 78 56 145 169 202 230
Impact of B3 (exc. £480m funding) (107) (71) (196) (156) (153) (214) (578) (647) (364) (264)
Revised Profit after interest & after tax (76); (39); (148): (86) (75); (158) ~~ (483)-—= (478) = (162) (34)
Slide 9
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BEES ees
HORIZON WORKING GROUP
Terms of Reference
° to oversee negotiations
¢ to contribute to problem solving
¢ assist in maximising commercial
potential
Slide 10
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ee ee eee
HORIZON WORKING GROUP
Membership
DTI POCL
Ian McCartney ____ Stuart Sweetman
Frank Doran Dave Miller
Geoff Moore
David Siddick NFSP
Isobel Anderson Colin Baker
John Peberdy
CWU
Dereck Hodgson CMA
Roger Darlington Terry Deagan
Tony Harris
Slide 11
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ee eee ee eee
NEW VISION
Key Enablers: Network _
Smartcards
Trusted Brand
Slide 12
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NEED TO FIGHT
¢ Understand BAs plan for ACT 2003/2005
¢ Understand banks key drivers to accept this
work
e Understand who pays i.e. Govt Consumer
¢ Understand impact on PO Network -
viability threat of all types of outlets
e Plan campaign together and co-ordinate
actions
Slide 13