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Ormerod, Janet Ddloul e)
From: Rich, Paul
To: Rego, Mena
Ce: Ormerod, Janet
Subject: Fw: CASG NOTES.
Date: Wednesday, April 08, 1998 4:27PM.
tosee..i cleared them_with,scott.
jant;please b/f_next casg”
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From: Childes, Scott
To: Miller, David GD; Sweetman, Stuart; Close, Richard; Rich, Paul; Jerry Cope; Roberts, John
Ce: Adams, Richard
Subject: CASG NOTES
Date: 08 April 1998 14:59
< <File Attachment: CASGMAR8.DOC > >
I attach the notes from the last CASG meeting.
Thanks, Scott
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Page 1
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In Strictest Confidence
CASG(98)2nd Copy No
CASG98/7 to 11
COUNTER AUTOMATION STEERING GROUP
27 MARCH 1998
Present: John Roberts (Chairman)
Richard Close
Jerry Cope
Dave Miller
Paul Rich
Stuart Sweetman
Scott Childes (notes)
MINUTES OF CASG98/7
PREVIOUS
MEETING The Committee APPROVED the minutes of its meeting
of 26 January 1998
PROGRAMME PLAN CASG98/8
UPDATE & KEY
ASSOCIATED ISSUES The Committee noted the update by Dave Miller and in
particular that
@ the PDA would cease to exist on 31 March with control
passing to POCL who intended working more closely
with Pathway to develop integrated plans with clear
interdependencies, particularly with regard to POCL
feeder systems and implementation. The clear aim
being to develop a stock of prepared offices which
would improve the pace of rollout in 1999. Work was
currently in hand to develop service management in
support of Horizon;
(ii) a scoping exercise to establish the cost of modifying the
network to accommodate Horizon equipment had
estimated the cost as being up to £40m of which
Pathway had said that they wanted POCL to pay £17m;
this was additional to the original business case. A
solution to this would have to be sought or the
programme halted, although this would have serious
morale and PR implications. Negotiations on resolving
this were underway and an agreement was expected
within the next two weeks. POCL would not spend
beyond that originally authorised within the business
case;
ii) —_ at present the programme plan was working to a live
trail in January 1999 with rollout in April 1999.
However, POCL believed the balance of probability
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(iv)
REVIEW OF HORIZON
BUSINESS CASE
@
Gi)
FEEDBACK ON
In Strictest Confidence
was for the live trial to commence in March 1999 with
national rollout commencing 1 July 1999. Benefits
Agency supported these latter dates which, to be
achieved, would still require close co-ordination
between POCL, BA and Pathway with management of
the key issue of ‘Acceptance’ a crucial factor in meeting
the timescale. POCL would not seek to delay Pathway’s
April 1999 rollout date, but before accepting the system
would want to be certain that it was working correctly;
work on EPOSS was continuing and Pathway had
indicated that whilst it could provide a system which
met the contract, its lack of robustness could generate
high level of errors within POCL. This was being
investigated although it was difficult to quantify how
the system would work until after it had been installed
and was operational
CASG98/9
The Committee noted the update by Dave Miller and in
particular that
in January 1998 POCL had reported a positive NPV of
£100m which had assumed national rollout in April
1999 at a rate of 300 offices per week. However, since
January the increased cost of modifying offices had
been identified and additional factors, including a
review of NRR as a consequence of additional regional
costs, a review of the base case, revised client costs
information from Activity Based Costing, and revised
additional contributions from POCL clients, other than
BA had had to be factored in. Additionally, a number of
assumptions were now uncertain, including Pathway
charges, contract length and Plan dates. In view of these
changes an update paper would be tabled for the Board
_in April with a fully revised paper tabled for MaPEC in
September
noted in discussion that
for the Post Office Board meeting in April a high level
paper would be produced which would provide a
comparison with the original business case and detail
the reported changes. It should provide a degree of
comfort that the Business case remained robust
CASG98/10
In Strictest Confidence
“DEEP PINK”
In Strictest Confidence
The Committee noted Paul Rich’s oral report and in
particular that
a joint paper by the Treasury and DTI on the optimum
way forward was still in preparation for submission to
Ministers. DTI had worked closely with POCL on the
input of information and had inparticular sought
briefing on what would happen if the programme was
not successful. Briefing on this and the other
information provided to DTI would be made available
to John Roberts as and when appropriate. DTI were
known to be persuaded of POCL’s view and would
work positively on behalf of the business. From
POCL’s perspective it was important that Government
took ownership of the programme and appreciated the
network and commercial consequences of it failing,
together with the potential for legal claims by ICL.
To this end POCL could provide a coherent argument
which detailed the impact in specific offices
nationwide;
Gi)
(iii)
Gv)
with regard to POCL’s legal position work with Legal
Services and Slaughter and May continued. The DSS
were still keen to issue the 13 week cure notice to ICL
following the contractual breach last November,
although POCL could see little advantage in taking this
course of action. DTI had concerns that their official
Accounting Officer could be critical of the use of public
money to fund the programme and had sought
agreement from POCL for their auditor to have access
to business information. However, this was not
acceptable to The Post Office, as it was
accountable to Government through its own external
auditors. This point had been made strongly to DTI;
an ‘independent’ experts report commissioned jointly
by BA/POCL, through programme lawyers, on the
failure to meet contractual obligations in the past had
failed to look at actions prior to the last re-plan in
February 1997. Inevitably changes made by the parties
prior to this were not covered although POCL were
clear that they were not at risk legally and was in a
position to explain to DTI and others the facts about
this;
commercially, work was continuing on preparing
POCL’s negotiating position with input from work with
Howard Hyman proving useful, particularly in
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MEETING
(iv)
(vi)
(ii)
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developing a clearer understanding of ICL and the DSS
positions. Short-term contingency planning had also
been accelerated by POCL. A possible new approach
was also emerging from DSS and BA which could
replace the planned payment card product with that of
some form of social banking
noted in discussion that
rather than move immediately to the development of an
alternative product at the expense of current programme
delivery it was thought important to conclude the
existing work and then have a period of stability and
development. This was the line that POCL was taking
with DTI. POCL needed to remain clearly focused on
the benefits of Horizon and ensure that progress by all
parties against key milestones were maintained.
However, any future development opportunities could
not be overlooked and it was therefore important to
remain flexible on longer term initiatives. To help
influence the political direction it would be useful for
someone to meet with Adrian Montague, who was
leading the ‘expert’ panel review under the Treasury
Working Group: He had previously sought an
introduction with Richard Close and this therefore
presented an ideal opportunity for a meeting to
take place. Richard Close would pursue this. It was also
important to ensure that the NFSP were also adequately
briefed on developments;
a meeting with Anne Bowtell would also be
useful, and John Roberts would progress this;
any enquiries by the National Audit Office (NAO) to
have access to The Post Office were to be firmly
rejected; the Post Office’s external auditors dealt with
any audit matters
CASG98/11
The Committee noted that the next meeting was
scheduled for 15 May at 9.30am.
In Strictest Confidence
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