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WU Research Fax
29 Nov °99 12:46 P.O1
FO NLO OG O/
CWU Research
Tos Colin Baker From: Matthew Payton
Pages: 5
Bate: 29/11/39
Rer HORIZON WORKING GROUP ce:
CUment CForReview [iPleaseComment UPleaseReply _[1 Ploase Recycle i
As part of the continuing co-operation on the trade union side of the Horizon Working
Group I have prepared a note on the last meeting identifying the key issues. I attach
a copy this for your Information.
I understand you will receive comprehensive minutes and an agenda from the DTI
prior to the next full meeting of the Group this Wednesday 1° December. However I
thought you might also find this note useful for your records.
With regard to other work of the Group, I believe that we are all still waiting to see the
draft submission to the PIU, which was to be the key concem of the next meeting. I
will be attempting to follow this up on our behalf. I
I hope this is helpful, and I will of course remain in touch regarding the ongoing work
of the group.
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CWU Research Fax = 23 Nov *99 12:46 P.02
TO: DEREK HODGSON
FROM; MATTHEW PAYTON
DATE: 16 November 1999
ce: TONY KEARNS, ROGER DARLINGTON
HORIZON WORKING GROUP MEETING - 15 NOVEMBER 1999
Tony may have already spoken to you regarding the main issues to come out of Monday’s
meeting of the Horizon Working Group. However I thought I should provide you with a more
detailed written summary of the meeting for the record. I
Purpose of the Meeting
1. As you know following last weeks meeting with Jeff Rooker (which failed to address the
issues in question) this meeting of the Working Group was hastily arranged so that we
could receive a detailed presentation from DSS/ BA officials on their plans for migration
of benefit payments to automatic credit transfer (ACT).
Child Benefit Letter
2, Although Alan Johnson was keen to address this as the only matter on the agenda he
started the meeting by referring to the letter that was sent out to Child Benefit recipients H
(as discussed at the last meeting). He said that DSS were reviewing the situation and that
no more of these were to be sent out. DTI would be writing to all members of the Group
with a full explanation of the situation in the next week or so. DTI would also like to see a
new letter go out to all those who had received the previous one pointing out that cash
payment at a post office was still an option.
3. However when Jeff Rooker arrived at the meeting he was determined to pursue this issue
before moving on to the agenda of the meeting. He said that he had gone back and
examined this matter and discovered that 360,000 of these letters had gone out to Child
Benefit recipients who were receiving their benefit weekly, when 4 weekly payments were
the norm. The wording of the form bad been the same since 1994 and these mailshots
were done occasionally to move those who were not actually eligible for weekly payment
on to four weekly.
4. Colin Baker of the NFSP conceded that whilst there may well be an issue of periodicity of
payment, the fact remained that the letters in question failed to present cash payment at a
post office as an option, and contained language that could only be seen as promotion of
ACT methods of payment.
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5, Johnson said that the main issues (which they were still checking out) were whether this
form had indeed been in use since 1994, and (as implied by DSS) had been agreed with
the DTI, the NFSP and others. Clearly the lack of a ‘cash option was a breach of the spirit
of the commitment given by the Secretary of Stute for the DSS not to promote ACT
before 2003, if not a breach of the letter. Rooker undertook to re-visit this issue in the
light of the groups continuing concerns.
BA Presentation on ACT Migration
6, Moving on to the substance of the meeting Rooker began by summarising the
government's intention to move to ACT from 2003, and use bar coded order books in the
interim. He said that the presentation to be given by his officials would cover the
Preparations by the DSS/ BA in the period up fo 2003, and not the migration process itself.
7. More generally he felt that he should point out that although the BA does not see its role
as funding the future of a new Post Office network based on banking and other services, I
he recognised that there would be considerable cost savings for the BA, and that he must I
acknowledge that there was a government wide policy to maintain the post office network. {
He failed to elaborate on this, but went on to say that not all benefit claimants would be
able to use ACT, as they would not/ could not operate a bank account.
8. Rooker then handed over to Paul Hanson from BA. He had previously worked on the
Horizon project for BA and delivering the benefit payment card, but was now project
delivery manager for ACT “Payment Modernisation Programme”. He went through
several slides on the preparation being done by BA between now and 2003:
- Since May they had to act on card regression, BPC project closure, ongoing internal :
systems work, and start up of the ACT project. :
- Looking forward they must start by initiating the new project, decide what their
objectives were, keep up with the timetable set by government and ensure that the
necessary resources are available.
- The big decisions they must make in the period coming up will concem what I
exceptions there will be to payment of benefit by ACT, how the payment process
will be operated, the logistics of migrating the large number of claimants and the
partnerships they must forge with other businesses. He went on to focus briefly on
each of these areas,
- Exceptions — particularly concerned about financially excluded claimants who can’t,
won’t or don’t have a bank account. There will clearly need to be altemative
provision for these people. It was made clear that they did not know what this
arrangement would be yet. In the new year they will be looking at the numbers of
people this effects in order to get a reliable idea of the number they will have to pay in
a different way.
- Payment Process — How cash will be made available at a post office for individuals
who want to do so will need to be addressed, as well as other issues conceming access
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23 Nov *99 12:46 P.04
to funds. This question 0 access will be of particular concer in rural communities
and outlying urban areas.
- Migration — BA had previously worked on the physical process of moving claimants
between current methods of payment to the BPC. They were now working on a
similarly difficult process of moving people onto ACT with minimal disruption, A
number of factors involved in this process; customer/claimant groups, the benefit
“product”, risks involving continuity of payment, costs and savings, and “intercepting”
all this with the Post Offices plans on network banking etc,
- Partnerships — It will be crucial to develop and maintain partnerships to fully prepare
to implement the strategy. This will inevitably include DSS business partners, those in
the financial services industry, customers (and their needs), and the Post Office.
- In terms of the next steps to be taken by BA, they are involved in the PIU study and
are looking forward to contribute positively to that. Thete is also a considerable I
amount of “policy development” work to be done, particularly on the implications of I
the decision to move to ACT in terms of the customer/ claimant (¢.g. protecting them
from bank charges etc), the exceptions to ACT payment, and BAS relationship with i
the Post Office,
Questions
9 As you would expect there were several questions about this Presentation. Colin
Baker and Terry Deegan wanted to know more about the criteria for exceptional
methods of payment (i.e. nor ACT). It seemed that BA were not clear who would
qualify, but they were working on the assumption that ACT payment would be “the
notm” and that the only exceptions would be those who were “unbankable”. It was
noticeable that there was no mention of the commitment in the statement on 24 May
that:
“The Government an give an assurance that those benefit claimants who wish to collect
their benefit in cash at post offices will continue to be able to do $0”
10, It therefore appeared that BA saw the policy as a move to compulsory ACT for all
those with a bank account of somie sort. The commitment given above was principally
seen as an option to receive cash through cash machines at post offices, and over the
counter only for the estimated 5% of claimants unwilling or unable to operate bank
accounts,
ll. Terry Deegan was concerned that this would stigmatise those who continued to
receive cash payment at a post office, us they would effectively only be the “bottom
end” of the market.
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12, Tony Kearns asked how long it would be until BA had the answers to questions being
raised, on exceptions, payment process, migration and partnerships — and policy
development matters in genetal. It was estimated that the answers would only really
become available in the next 18 months.
13. _A further bricf presentation was then made, generally extolling the virtues of ACT and
explaining why this was the preferred method of payment.
14. Johnson tried to emphasise that the Post Office was losing a hugely significant part of
its business, and that even with extra business once automation was completed it
would struggle to replace that effectively.
15. BA officials said that they did treat the Post Office differently to other commercial
partners, and recognised that it would still have a very important role in delivering
benefits.
16. Terry Deegan made a final attempt to try and underline the potential impact of the
Government decision, and the fact that the Post Office and its employees were still
reeling from the shook of the BA withdrawal from the Horizon project, Planning was
being done on the basis of BA work being maintained at some level — that was now all
gone, and could have a catastrophic effect on the network,
17, Stuart Sweetman seemed to accept that the Post Office would only be dealing with the
“rump” of claimants without bank accounts, and was interested in how many people
were expected to be “exceptions” and have their benefit paid in cash. It was estimated
that there could be as many as 2 to 3 million.
End of Meeting
18. Johnson wound up the meeting by inviting BA officials to use the Working Group as a
forum to maintain links and exchange information regarding the progress of the
project. He also re-iterated that there would be further meetings of the Group on the
1" and possibly the 15" of December.
MATTHEW PAYTON ne
Research Assistant