Signatory:
Addressee:
Timing:
Copy:
Enclosure:
Originator:
File name:
Date:
Mr Johnson
Matthew Taylor MP
Routine
Mike Whitehead CGBPS1A
306 BPR 215 1775
TAYLOR.DOC
7 October 1999
UKGI00014043
UKGI00014043
UKGI00014043
UKGI00014043
Matthew Taylor Esq. MP
House of Commons
London
SWIA 0AA
Thank you for your letter of 24 September to Patricia Hewitt about the concerns
expressed to you by your constituents, Mr and Mrs Hannaford of Penwithick Post
Office St Austell, about the future viability of their post office in the light of the
planned changes to the arrangements for payment of state benefits. I am replying as
Minister responsible for matters relating to the Post Office.
I should first like to assure Mr and Mrs Hannaford that the Government fully
recognises both their concerns and the importance of the post office network. Both
we and Post Office Counters Limited (POCL) are committed to the maintenance of a
nationwide network of post offices and are very aware of the importance of post
offices as a focal point of their local communities, particularly for the elderly and less
mobile. With over 98% of the network, including all sub-post offices, privately owned
and operated, they also represent a valuable partnership between the public and private
sectors.
As you know, Stephen Byers, announced on 24 May a number of changes to put the
Horizon project to computerise the Post Office network back on track. The original
project, initiated in 1996 by the previous Government, had suffered such delays and set-
backs that it was running three years late. The changes now made, in partnership with
ICL, should ensure that the long overdue computerisation of the post office network
can be completed by 2001
Although the Benefit Agency will move to a more modern and efficient way of paying
benefits using the existing automated credit transfer system to enable payments to be
made into bank and building society accounts, this migration will not begin until 2003
and will be phased in over a period of two years. The Government has given an
assurance that those benefit recipients who wish to collect their benefits in cash at a
post office will continue to be able to do so , both before and after the change-over.
The automation of the post office network will also enable the POCL to develop
further its relationship with the banking industry, and the range of services it offers to
personal customers. With post offices acting as agent for a range of banks, benefit
recipients will be able to collect their benefits at post offices in cash if they wish to do
so and bank customers generally will benefit from a wider range of convenient access
points, particularly in rural areas. The Post Office will be working up their commercial
strategy to win new business by offering banking and modern government services on
the basis of an automated delivery platform available in every post office.
A working group, established by my predecessor, Ian McCartney, will under my
Chairmanship continue to oversee progress with the revised Horizon contract and to
explore further the commercial potential of the automated network to offset the
decline in traditional services. In addition to the Post Office and the main Post Office
unions, the National Federation of SubPostmasters is actively participating in the work
of this group and, of course, I am fully aware of the issues of concern to
subpostmasters.
UKGI00014043
UKGI00014043