CBO00100005_087
CBO00100005_087
RESTRICTED - POLICY
Treasury Chambers, Parliament Street, SWIP 3AG
The Rt Hon Margaret Beckett MP
President of the Board of Trade
Department of Trade and Industry
1 Victoria Street
London
SWI1H OET 28 October 1997
POCL, BA AND DVLA
Thank you for your letter of 17 October
2 {am of course aware that any fundamental changes to the business relationships
between POCL, the Benefits Agency and DVLA which resulted in business moving out
of Post Offices, would impact in a major way on POCL. I am also well aware of the
widespread perceived importance of the Post Office network and the sensitivities
attached to it
CBO00100005_087
CBO00100005_087
RESTRICTED - POLICY
That is not to say however that we should avoid asking questions about the
optimum size of the Post Office network and the most sensible way of sustaining it
I agree that the Post Office review offers us the opportunity to look at these
fundamental issues and am clear that, it should also include an examination of the
current relationships between the POCL and other parts of the public sector
4 We have to consider other aspects of the Government’s service to the public
For example, should the DSS be bound to use the Post Office when, with new
technology, it could use more automatic management and payment systems which
are, arguably, to the benefit and convenience to its customers? There could also be
substantial reductions in costs. At the moment, the DSS has a huge IT project which
is over budget and behind schedule and which is designed to use POCL rather than
other means of payment. The BA contract is worth about a third of POCL income -
about £360m per annum. You are also aware that the DETR is concerned about the
level of payments made by the DVLA to POCL
5 The CSR process should allow us to discuss these costs as well as the
implications for the Post Office. If we are in fact subsidising POCL should we not
6 No pre-emptive action has been taken and I do agree that we need to discuss
these matters.
CBO00100005_087
CBO00100005_087
RESTRICTED - POLICY
Tam copying this letter to the Prime Minister, John Prescott, David Blunkett
Donald Dewar, Harriet Harman, Gavin Strang, John Denham and to Sir Robin
Butler
ALISTAIR DARLING