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f ahi i
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Mr Stuart Sweetman Department of
Managing Director je and Industry
Post Office Counters Ltd 151 Buckingham Palace Rond
Lomlon §
148 Old Street " " SWIW 988
London EC1V 9HQ Faquiries
URL hip:ihwwrw.dtl.goviuk.
Telex $813148 DIHOG -
Minicom I i
Direct Line i
imix I GRO
Your tf
pae 3 November 1999
Dear Shank, I
HORIZON WORKING GROUP: 8 NOVEMBER MEETING
8 November meeting
Tam writing to confirm that the next meeting of the Horizon Working
Group, which will be chaired by Alan Johnson, will take place on Monday
8 November at 4,00 pm at the DTI Conference Centre, 1 Victoria Street.
Mr Jeff Rooker, Minister of State at the Department of Social Security will
be attending to speak to the Working Group about the DSS/ Benefits Agency
{ ACT migration plans. I attach an agenda.
I would be grateful if you and copy recipients could let Margaret Gumbrell
in Mr Johnson’s office know the names of those attending
).
Further meetings
David’s Sibbick’s secretary has advised that the next full meeting of the
Working Group will be held on Wednesday 1 December 3.30pm to 5.00pm,
You and copy recipients are also holding Wednesday 15 December 3.00pm
to 4.30pm on a contingent basis.
X400:
388-219
d 4 HWGOLET.DOC
ied
Department of Trade and Iudurry
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Minutes of last meeting
T attach minutes of the last meeting of the Working Group held on 11
October,
Copies of this po to Derek Hodgson, CWU; Colin Baker, NFSP; and
Terry Deegan, CMA.
ISABEL ANDERSON
POSTAL SERVICES DIRECTORATE.
. HWO6lET.DOC
dts
Department of Trade end Indusuy
888-23
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HORIZON WORKING GROUP
SIXTH MEETING MONDAY 8 NOVEMBER 1999 AT 4.00PM
1, Introduction: Mr Johnson
2. Presentation by Mr Rooker on DSS/BA plans for ACT migration.
3. Discussion with Mr Rooker,
4, Arrangements for next meeting.
DTI
3 November 1999
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NOTE OF 5TH MEETING OF THE HORIZON WORKING GROUP ON
MONDAY 11 OCTOBER 1999 AT DTI CONFERENCE CENTRE,
1 VICTORIA STREET, LONDON
Present:
Alan Johnson MP, Minister for Competitiveness DT] (Chairman)
Stuart Sweetman, Managing Director Post Office Counters Ltd (POCL)
Dave Miller POCL
Derek Hodgson, General Secretary Communication Workers Union (CWU)
Tony Kearns
Matthew Payton CWU
Terry Deegan, Genoral Scoretary Communication Managers Association (CMA)
, Tony Harris CMA
iS Colin Baker General Seoretary, National Federation of Subpostmasters (NFSP) 1
John Peberdy NFSP
David Sibbick, Director-Posts DTI
Isabel Andorson, Postal Services Directorate DTI
Bronwyn Madson, Pross Officer DTT
Simon Lancaster, PS/Alan Johngon DTI
Main Points
A.__ Introduction
1. Mr Johnson in introducing the meeting as new Chairman stressed that he felt the
work of the Group was very important to the success of the Horizon project, and he
would accord it a high level of priority, It was agreed that a letter would be sent by i
the Group to lan McCartney thanking him for his work as previous Chairman, I
(Action Point: DTI to prepare and circulate for signature by Group members)
2. The minutes of the meeting held on 27 July were agreed.
3. Mr Hodgson expressed concern about a number of issues including the time
which had elapsed since the last meeting, A great deal had been going on about
which the Group had not been informed nor had been able to offer any input. If the
Group was given the task of ensuring the success of the Horizon project, there !
needed to be much more frequent meetings, perhaps fortnightly, to enable the Group
to remain firmly in the driving seat. The Group had considered at its last meeting the
case for a joint submission to the Performance and Innovation Unit (PIU), but there
appeared to have been no progress on this within the Group; and the DT! paper
detailing points of interest raised in recont Trade and Industry Select Committee
hearings on Horizon and the Post Office White Paper, and in subsequent
Parliamentary business, had only been tabled at the meeting. [n particular the
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Working Group had not been kept informed of developments on the study by the PIU
nor on the important discussions between Post Office Counters (POCL) and the
Benefits Agency (BA), It was not a question of recriminations ~ he understood the
discontinuitics caused by the summer holidays and the change in Ministerial
responsibilities, but it was important that sufficient resources were made available to
ensure that the Group could fulfil its role effectively.
4, MrJohnson suggested that meetings should in future be held on a monthly basis
with additional ad hoc meetings called to deal with specific issues as needed; the
paper by DTI merely contained information already in the public domain; on the PIU
study, the terms of reference and other details had not yet been finalised or made
public, but would be circulated to the Group when they were, There would be
further discussion of this study and of the POCL / BA negotiations under the
appropriate agonda items. He also hoped that the Post Offico and the Unions would
be able to make progress on the media strategy paper they had undertaken to produce
at the last mecting. ,
B. late by Post Office on progress with project
5. Mr Miller explained that formal acceptance of the reconfigured Horizon system
planned for 18 August had been postponed because of POCL's concern about
training, system stability, data integrity (there had been an unacceptably high level of
screen freezes) and the effective operation of the help desk. The Post Office had
accepted the system on 24 September on the basis that effective remedial action had
either been completed or was in hand.
6. Currently 950 post offices are automated and the Post Office expect that this will
rise to 1,600 - 1,800 by Christmas. They confirmed that they were still confident of i
achieving roll out by March 2001 at the rate of 300 offices a week although of course I
there remained risks, The Post Office had commissioned an independent review of
{ the roll-out plans.
7. Mr Deegan asked about the issues of spare capacity and triggers for payment.
Mr Miller contirmed that the Post Office were clear that they would be able to use
Spare capacity on the system (this had previously been an issue of dispute with ICL).
The Post Office will pay ICL £60m on 24 October on initial acceptance of the
system and will pay ICL a furthor £80m when they achieve roll out to 1,600 offices
which is planned for around Christmas time. ICL would not receive payment until
the target had been reached, though the Post Office was not expecting significant
slippage. Mr Baker expressed support for the Post Office's position - whilst there
was a need for ICI. to hit deadlines it was also important for the system to be
delivered in full working order. The feedback which Mr Baker had received from
NFSP members was intermittent, and not all positive but problems now seemed to be
being sorted out and training seemed to have improved. The Post Office confirmed
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that systematic measurement of returns from offices was catried out and that Post
Office Counters support staff visit individual offices and provide feedback to POCL
HQ. Mr Miller also personally visits front line staff.
8. Mr Johnson suggested that publicity be arranged to coincide with automation of
the 1000th office. The Post Office agreed to do this. (Action point: PO)
Cui by Post Office on Benefits Agency {ssu
a) Payments for Order Book Control Service (OBCS r Payments
9. Mr Sweetman said that he and John Roberts had met with the DSS Permanent
Secretary, Rachel Lomax, and that a series of further meetings at working level with
the BA had been scheduled. In terms of progress, financial constraints appeared to
be restricting the negotiating ability of the BA. There were a number of areas within
the contract which the BA wished to change. Mr Sweetman suggested that an
independent assessment of POCL's costs in providing the OBCS service should be
made, which might then lead to’a joint approach to Treasury by BA and POCL. This
seemed at present to offer the best chance of resolving the impasse. Mr Johnson
asked whether the negotiating teams were at the right level, Mr Sweetman said this
was indeed an issue since this sort of negotiation had traditionally been done at
account team level. He felt it was however worthwhile continuing the negotiation for
the next couple of meetings.
10. ‘The Working Group discussed its role in these negotiations with the BA. Mr
Hodgson suggested that there was a case for the Working Group to input more
directly into the BA / POCL discussions. Mr Johnson concluded that the Working
Group shared the common objectives of securing a fair payment for OBCS and the
continuation of the floor payment. The Group could consider what wider influence
they might bring to bear either collectively or individually in resolving the issues, but
could not sit at the negotiating table. That needed to be left to POCL and BA,
b) Bar Codes
tl. Mr Miller explained that offices equipped with Horizon were recording
unacceptable high rates in reading the bar codes on benefit order books. This
problem had not been experienced with the stand-alone bar code reader used within
the M25 area. BA blamed the Horizon system, whilst ICL blamed the quality of bar
code printing. A further possibility was that paper quality might have caused the
problem. ‘The Print Regulatory Authority would be giving a view on this at the end
of the week, It appeared that the Horizon bar code readers worked satisfactorily with
other bills.
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¢) Development of ACT migration strategy
12. Mr Sweetman told the Group that POCL had met with the BA on 1 October.
BA had indicated that plans for ACT migration strategy were not sufficiently
advanced to share with them, though it was known that officials had been tasked with
providing DSS Ministers with a worked up strategy by 31 July.
13. Mr Johnson confirmed that a meeting of the Working Group at which DSS/BA
could be questioned would be set up as soon as possible. He hoped that it would be
possible to persuade a DSS Minister to attend. (Action Point: DTI)
d) Roll out issues
14. Mr Miller told the meeting that preparatory work had already been done on
9,000 offices and POCL was starting to mobilise support teams (comprising 400
staff). They had identified a number of offices where they believed there may be a
problem with implementation (about 20% of the network) and had strengthened the
training for these, Time would lell whether the target roll-out of some 300 offices a
week was sustainable in practice, Mr Johnson emphasised the importance of
avoiding slippage in the roll-out. Mr Miller confirmed that BA now had no
particular involvement in the roll-out, although they wanted the pattem of roll-out of
OBCS to adhere to the plan formulated to achieve the maximum fraud savings.
D. Update by Minister on Discussions with Colleagues
15. Mr Johnson said that lan McCartney had made several attempts to persuade
Alastair Darling to increase the money available to the BA, but without success, A
proposed meeting with Alastair Darling had been cancelled, but would now be
rearranged. (Action Point: DTI)
E. Update by Minister on PLU Study
16. Mr Johnson advised the Group that Greg Wilkinson was the official leading the
PIU study whilst Charlos Clarke was the Minister in charge. He suggested the
Working Group submit a joint submission to the PIU, and that a sub group of the
Horizon Working Group should be set'up to do this. Members could also, of course,
submit independent submissions and would have the opportumity to meet with the
PIU.
17. MrSibbick explained that the P1U’s timetable was to finish the study by
Christmas or early in the New Year. The study would look to the future whilst
recognising the legacy of the past. Mr Lancaster explained that PIU studies were led
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by a Minister not involved in the day to day policy, hence the choice of Charlos
Clarke for this study. It was agreed that DTT would write around urgently to prepare
a paper for early submission to the PIU. (Action Point; DTI)
F. Future Work Programme
a) substance
18. Mr Johnson confirmed that an early meeting with the DSS/BA would be
arranged. (Action point: DTI)
DTI would convene a sub-group to prepare a joint paper for the PIU. (Action point:
DTD
Mr Johnson asked about the media strategy which the Post Office and the unions had
undertaken to prepare. (Action Point; PO, CWU, CMA, NFSP)
Government would update the Group on Government gateway,
e-commerce strategy. (Action Point: DTI)
Post Office Counters would at a future meeting give presentations on network
banking and, following that, on their other clients. (Action Point: PO)
19, Mr Hodgson suggested that studies were needed on Post Office Counters'
future contracts with other Government clients. Mr Johnson suggested that whilst
POCL would be sharing future prospects with the group some information might be
commercially confidential,
b) Meetings
20, Mr Johnson suggested that the Working Group should meet regularly ona
monthly basis, with additional ad hoc meetings called to deal with specific issues as
needed.
POSTAL SERVICES DIRECTORATE /DTL
3 November 1999
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