BEIS0000187 - Briefing on Post Office Issues prepared by David Sibbick

Evidence on official site

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POST OFFICE: ISSUES ARISING DURING THE RECESS

Accusation
HMG is contemplating cancellation of the Horizon project, with serious
consequences for the future of the post office network.

Facts
The Horizon project continues to attract Press attention.

Following consideration of an interdepartmental report by officials, Ministers decided
in September that a further period of one month should be allowed to see whether a
commercial basis for continuation with the project could be agreed with ICL. To assist
this process an independent adviser, Graham Corbett (Deputy Chairman of the MMC
and a former finance director of Eurotunnel) was appointed to chair the negotiations.
In parallel, Ministers asked that the options of continuing with the project but without
the Benefit Payment Card, and of withdrawing from the project entirely, should be
worked up in greater detail so that value for money comparisons between the various
courses of action could be made. A report on the outcome of this work is expected to
be presented to Ministers within the next two weeks.

At a particularly sensitive stage in the negotiations, it is important that there should be
no apparent change in official statements on the Government’s position towards
Horizon and the lines to take below reflect this.

Lines to Take

e Q. Is the Government planning to cancel the contract to automate post
offices and benefit payments? If so, what will this mean for the future of
the nationwide network of post offices?

e The Government is committed to providing a secure, convenient and cost effective
means of paying benefits to customers. That is what the Horizon project and the
Benefit Payment Card were designed to do and what we continue to work towards.

© The project will also provide Post Office Counters with a modern automated
platform from which to improve existing services and to generate new business.

© The Benefits Agency and Post Office Counters Limited continue to work closely
with the supplier, ICL Pathway.

e Weare also monitoring progress to ensure that the programme remains on course to
deliver its agreed objectives.

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e The Government is committed to maintenance of a nationwide network of post
offices.

DAVID SIBBICK
Postal Services Directorate/DTI

12 October 1998

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