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Q&A BRIEF BA/POCL
NB_- DTI PRESS OFFICE TO HANDLE ALL CALLS
What caused the problems with this project? Government
indecisiveness or failures by ICL?
This is a highly complex IT project, entered into by the last
Government. It is this Government's decisive action that has
put the project back on track. [Cannot comment on detailed
technical issues which are commercially confidential between
POCL and the supplier - ICL.]
Why has this taken so long to resolve?
This is a large and complex project, with significant amount of
public money at stake, and with implications for 15 million
benefits recipients and for 19,000 post offices. Only right
that we should consider very carefully how to move forward. As
a result, we have now been able to put this project back on
track.
Wasn't the delay caused by splits within Government and between
BA_and_ POCL?
The delays were caused by technical problems with what is a
highly complex IT project, entered into by the last
administration. This Government has taken decisive action to
put the project back on track.
How _much has the Government contributed to the abortive costs
of the benefit payment card?
As a PFI contract, the costs and risks associated with
developing the benefit payment card fell to the contractor -
IcL
Why have ICL/Fujitsu made a provision of £180m in their
accounts?
This is a matter for ICL/Fujitsu and their auditors.
if pressed:
The provision reflects the costs and risks associated with
developing the benefit payment card, which, as a PFI contract,
fell to the contractor.
How much will this new deal cost?
This project will result in significant savings overall. There
will be substantial fraud savings; and the automation of post
office counters will provide a platform for improving the
efficiency and quality of delivery of government and other
services to the public, including the payment of benefits.
If pressed on whether this costs more than original project:
The Government has carried out an extensive review of all the
options for taking this project forward. This option represents
the best value overall for the Post Office, benefit customers
and the taxpayer.
> If pressed on costs and financing:
The Government will be discussing the funding arrangements with
the Post Office in the context of the Post Office Strategic
Plan, and the implications for the Post Office's external
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financing will be announced in the normal way.
What does the loss of the Benefit Payment Card mean for the
future of the post office network?
This project represents a major investment in the future of the
national network of post offices, and will help post offices
offer better services to their customers. Benefits will
continue to be collected using order books and girocheques as
they are now. We intend to-move to a more modern and efficient
way of paying benefits through post offices in due course.
Those benefit recipients who wish to collect their benefits in
cash at post offices will continue to be able to do so.
Will Government Departments/Agencies continue to use the post
office network?
The post office network with its nationwide reach represents a
valuable channel for the delivery of Government and other
services. Automation will provide a modern electronic platform
for the delivery of these services.
What does this mean for benefit recipients?
Vast majority of benefit customers will be unaffected. Existing arrangements will
continue, including paying benefits over post office counters as now. Those currently
using the Benefit Payment Card - around 30,000 people - will see no interruption of
their payments.
Will the Government now pay all benefits into bank accounts?
Benefit recipients can currently opt to receive their benefits through their bank
accounts. We intend to move those recipients who are currently paid by traditional
paper-based methods to a more modern and efficient way of paying benefits in due
course, but we will ensure that all those who wish to do so can continue to collect
their benefits in cash at post offices.
What does the loss of the benefit payment card mean for the BA’s anti-fraud
strategy?
The nation-wide introduction of bar-coded order books will save up to £100 million
annually, in addition to existing savings achieved by other existing measures.
What will happen to the Benefit Agency's Customer Accounting and Payment
Strateay project?
The CAPS Programme is not just about the payment card. It is also introducing a
computer system that will improve customer service and security by linking benefit
computer systems. It will also improve the way in which the DSS accounts for its
expenditure. This work, which is well advanced, will continue.
Given the failures in this project, why doesn't the Government just terminate and find
another supplier?
The Government is satisfied that the agreement in principle with ICL puts the project
back on track, and automation of post offices should begin later this year.
Only if raised: Why is this no longer to be a PFI project?
The project has been restructured to remove the Benefit Payment Card, and the
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service element associated with the Card which was the basis for the PFI deal. The
Government therefore decided that the first stage of the project, in which the Post
Office purchases the automation system, would be more appropriately taken forward
in a conventional procurement. But this is just the first stage, and in parallel with this
the Post Office will be exploring the opportunities for developing a long term
Partnership with the private sector to exploit the full potential of the national network
of post offices, using state of the art technology.
If pressed: doesn’t this mean there will be greater upfront cost?
The Government will be discussing the funding arrangements with the Post Office in
the context of the Post Office Strategic Plan, and the implications for the Post
Office’s external financing will be announced in the normal way.
This project is no longer to be a PFI. Doesn't this show that the PFI concept is
fatally flawed when it comes to IT projects?
There is nothing fundamentally wrong with PFI procurements nor are there any
fundamental flaws with taking IT projects forward under PFI — others are being
delivered successfully: providing good value and service to the public- sector and
attractive return to the private sector investors. For example:
the OSIRIS project supplied by Siemens Business Service for the Welsh
Office
ArmyMail Project supplied by Bull for the Ministry of Defence
Employment Partnership Project supplied by EDS for the Department for
Education and Employment.
What does this mean for the Post Office White Paper?
The Government will be publishing the White Paper shortly.