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~ COMMUNICATION
WORKERS -
PRIVATE AND CONFIDENTIAL
Alan Johnson MP 150 The Broadway
Minister for Competitiveness Wimbledon
Department of Trade and Industry London SWig 1RX
1 Victoria Street
London Telephone
swiP OET
General Secretary
Derek Hodgson
49 January 2000
Dear Alan
FUTURE OF THE POST OFFICE NETWORK
We are writing to you in order to express our deep concern about the Government's
current approach to the whole question of the Post Office network.
You will recall that the Horizon Working Group was set up in May 1999 with the
specific task of overseeing negotiations and the subsequent roll-out of Horizon,
contributing to the smooth migration from paper based methods of paying benefits to
ACT and ensuring the future commercial viability of the counter network.
We are currently of the opinion that not all of these specific tasks are being
sufficiently addressed, and that despite assurances that have been given by the
Secretary of State about the future of the Post Office network, there has been no co-
ordinated approach across Government to ensure this future and replace Benefits
Agency work after 2003.
Given your knowledge and experience of the industry we know that we do not need
to remind you of the severity of the situation and the threat to the network in both
rural and urban areas. However, it would appear that so far the impact of the work
done by the Horizon Working Group, in actually minimising the negative impact of
the decisions made, has been negligible.
Although the Group has had the opportunity of putting its concerns, regarding the
DSS/ BA strategy for migration to ACT, direct to the appropriate Minister, regrettably,
no progress appears to have been made on finding replacement Government work.
We have, of course, formulated a joint submission to the Performance and
Innovation Unit on the problems caused by the Benefits Agency decision, but what
we are short of at this stage, are any solutions to help maintain the network.
In addition, we feel that we should express our concern that despite assurances
regarding criteria for access to the Post Office network - which were promised by the
Secretary of State “before the end of the year” (in his evidence to the Trade and
Industry Select Committee in July 1999) - it now appears that any such criteria will
only be agreed following the PIU report in March.
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Therefore, it would seem likely that whilst the new legislation contained in the Postal
‘ervices Bill is proceeding through Parliament - to its Second Reading, and even to
its Committee Stage - no interested party will know what these criteria are to be. In
fact as we understand it there is currently no reference to the criteria at all in the Bill,
and it will be included only as part of the social and environmental guidance. Whilst
we would not expect the specific criteria to be included in the primary legislation, the
Government has given clear commitments on this matter, and should include some
specific reference to the criteria in the Bill. In addition, if the new Regulator and
Postal Services Users’ Council are to be expected to monitor the network against
these criteria, then it should be made available as soon as possible, and before the
legislative process is underway.
We also know that you will share our concern about some of the articles that have
appeared in the press recently, and the fact that confidential documents appear to
have been leaked. We find this extremely disappointing and surprising, given that
this has not happened previously with any document that has been shared on a trust
basis with interested parties, whether on this matter or the Post Office Review. We
also believe that the kind of speculation this leads to is not helpful to the Group or
the objectives it is trying to achieve.
To conclude then, we believe that an early meeting of the Horizon Working Group
should be called in order to address these issues. We understand that the meeting
that was scheduled for 25" January will not now be going ahead. This is indeed most
unfortunate, as we believe there is an urgent need for you to provide the Group with
your view on the issues raised above, and discuss these matters fully before the
legislative process is underway.
We hope therefore, that it will be possible to arrange a meeting of the Group as a
matter of some urgency so this issue can be given the priority it deserves. We look
forward to hearing from you and having further discussions on these matters.
This letter is also been copied to John Roberts and Stuart Sweetman at the Post
Office.
Yours sincerely
DEREK HODGSON TERRY DEEGAN COLIN BAKER
General Secretary, CWU National Secretary, CMA General Secretary, NFSP
B1-01-2
18:39 9 FROM:0
lan Johnson MP
ofinister for Competitiveness
Deunstawet of
‘Trade ond Indwitry
PRIVATE AND CONFIDENTIAL 1 Vicroris Stroct
Personal io ina ET
Derek Hodgson Esq
General Secretary
Communicanion Workers Union
150 The Broadway
Wimbledon
London SWi9 1RX
Nor Derek
Thank you for yout letter dated 19 January which was also signed by Terry Deegan and Calin
Baker.
Tam puzdled a3 to why you believe that issues relating to the roll-out of Horizon are not being
“sufficiently addressed”. POCL reported to the last HWG mesting that the programme was
abead of schedule but that there were some substantial problems which needed to be resolved
over the Christmas/New Year break if we were to begit the year 2000 conversion programme
of 300 offices per week from 24 January.
We have kept closely in touch with POCL and ICL in the intervening period and, as you are
probably awate, whilst there are still difficulties with balancing, the other technical problems
have been resolved and the roll-out will re-commence as scheduled
‘You say that there has been no co-ordinated approach across Government. The HWG was
informed about the Cabinet Office PIU study before there was any public announcement and T
assumed that you fully understood the significance of this. For the removal of any doubr, the
PIU study will be cross-cutting and is chaired by an independent Minister, reporting direct to
ihe Prime Minister. The reason far its existence is to establish a co-ordinated approach across
Government and its report will be crucial to the future of the network.
There have also been continuing discussions with DSS/BA and DTI about the various
difficulties highlighted at our HWG meetings with DSS and BA representatives, Agreement
has now been reached in a number of areas that have caused concern particularly to NESP and
we will report this to you when the final details are in place, The work which the Treasury bas
done in respect of financial exclusion has also been co-ordinated with this and other
Government departments.
You make two other criticisms Firstly, that “no progress eppears to have been made on
finding replacement Government work" and secondly that the access criteria have yet to be
dt
Department of Trade ers! desing
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PPGE: Se
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22-@1-08 18:39 FROM:0 "GRO PEGE: 83.
published. Again, you must know that the PIU is critical to both - that’s why we made an
HWG submission.
In any event, whilst work is contiquing on the principal areas of new work such as network
banking and Modernising Government, the crucial requirement is to ensurs thar the roll aut
$0¢s to plan so that we have the IT platform to attract the new work.
It is disingenuous to quote what the Secretary of State said in July before the crucial PIU
study was secures, It would be ludicrous to set access criteria ahead of this report and it was
never the intention to include the criteria itself m the Bill.
You question the effectiveness of the Working Group and I have some sympathy with this. I
cannot stress to you strongly enough our dismay and disappointment at the leak in The Times
of the Working Group’s joint paper to the PIU less than twenty-four hours after the final
version had been circulated to members of the Group. At my request, Sir Michael Scholar has
carried out an enquiry within this Department, and I am satisfied that the leak did not originate
hera. It must therefore have been someone within the Post Office, the CWU , the CMA or the
NESP who passed a copy of the report to Christine Buckley of The Times. This leak
represented an appalling breach of trust and undermined the imegrity of the Working Group.
You also seem to have misunderstood the purpose of the Group. It does not exist to moniter
the content of the Postal Services Bill. The terms of reference of the Horizon Working Group
make it clear that the remit ig to optimise the contrisurion that the Horizon plarform can make
to the viability of the counters network: the wider remit you describe is Government’s
responsibility and part of the remit of the PIU study.
J was disappointed by your letter. On reflection, it is consistent with the carping tone that has
characterised all of your letters to me on this issue since I became a Minister. In view of the
long association I have had with all three signatories, I find this approach puzzling, I suggest
that the four of us meet in my office urgently so that we can discuss frankly (and in the spirit
of your “Private and Confidential” approach - i.e. without officials) the content of your letter
and ty to establish a relationship which is a little more constructive, Otherwise I fear the
Horizon Working Group will be of iittle use to any of its participams.
Tam sending copies of this letter to Terry Deegan and Colin Baker, and to John Roberts and
Stuart Sweetman at the Post Office.
Yours sincerely
ALAN JOHNSON MP
fo Minister for Competitiveness
Cictated by tha Minister
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Departmen af Trade and faabwscry