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ENON e A
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Parliament Strect
HM Treasury London SWIP 3AG
GRO
FACSIMILE T. NSMISSION
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AMAR-~1SGS TLE 1118S IDsHM TREASURY, Pearea
Parliament Street
London SW1P 3AG
HM Treasury
Steve Robson
Second Permanent Secretary
Finance, Regulation and Industry
Emallsteverobson SGI
Stuart Sweetman Esq
Managing Director
POCL
King Edward Building
King Edward Street 22 March 1808
London
EC1A 1AAK
HORIZON
I thought we had a useful meeting on 22 March of the public sector side, The main
issues we covered are set out below.
Horizon programme
2. Vince Gaskell said that recent work had revealed a number of problems which
could lead to a further 8 week delay. Any such delay would need to be factored into
the comparison of options A and B.
3. You have not see the reports of the problems described by Vince, You will be
assessing them.
4, We discussed the acceptance criteria for option A. Vince will circulate
proposals in order to see if we can get quick agreement on the matter. if not, the
disagreement will be recorded in relation to the comparison of options A and 8.
Mothballing
5, The discussion between POCL, BA and ICL had produced a recommendation
that we do not attempt to mothball option A. This was accepted.
Specification of option B and funding envelope
6 It is apparent that two versions of option B have emerged. One would be based
on BACS driven ACT and involve POCL having a bank partner to do account
management. The other would not involve financial transfer between BA and POCL’s
claimant “money boxes"
7. We agreed that PA and KPMG should this week work with BA, POCL and ICL
to establish the costs and risks associated with these two versions.
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Q-Maw-ISSe TUE 21: TDIHM TREASURY Presroe
Negotiating remit
8. We recognised that, to make progress, we need, as a first stage, to establish
the cost of option B in terms of payments to ICL. There will be a second stage in
which we see whether, in the light of this cost, there ara arrangements within the
public sector which will make the public sector partners comfortable with their overall
financial position. To progress the first stage, it was agreed that POCL would focus
negotiations with ICL on the acquisition and operating cosis of aption B, although the
eventual arrangement with ICL may be set in terms of a payment for services.
9. BA and POCL will discuss possible assumptions to underpin these negotiations.
They would write to me with either an agreed proposal , or setting out the areas of
disagreement.
10. Further thought will be given to the second stage described in paragraph 8
above,
Golden cloud
11, This is an aspirational element looking beyond the present project. The
prospects of the cloud may be changed, in terms of its size and Its Urning, by the move
from option A to B.
Heads of Agreement
12 A common structure and scope has been developed with ICL.
8
inking Partner
POCL have started discussions with Girobank which will be developed this
week. These will address technical links and costs.
Qutline Report and Schedule
14 All parties will give Alan Mawdsley comments by closs on Wednesday 25 March
on the two pieces of paper which he circulated.
Mesting with ICL
15. In the subsequent meeting with ICL we covered the above ground in relation to >
* the PA and KPMG work on the 2 versions of option B;
* the focus of negotiations on acquisition cost and operating cost;
. the agreed scope and structure for the Heads of Agreement
. the approach to mothballing,
ICL appeared content with the position on each. They agreed that the top priority was
the work by PA and KPMG on the two versions of option B. ICL suggested, and it was
agreed, that some work by lawyers on fleshing out the draft Heads of Agreement could
be progressed this week in the absence of principals.
416 it was agreed that ICL, BA and POCL would meet in a week's time to look at the
business dimension of option B in the light of work by PA and KPMG.
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ID:HM TREASURY Praeces
17 I am copying to Vince Gaskell, Sarah Graham, Paul Rich, David Sibbick,
Hamish Sandison, Jeff Triggs, Peter Schofield, Alan Mawdsley and Peter Copping.
“GRO.
“STEVE ROBSON"