Follow-up Questions
RECOMMENDATION VI: TRANSPARENCY
OF POST
OFFICE ACCOUNTS
The Committee would be assisted by an indication
of the steps taken to ensure that the greater transparency referred
to by the Committee and in the Government's response has in fact
come about, in particular in the 1999-2000 Post Office Accounts,
and in respect of the reserved and non-reserved areas
Under Article 14 of the European Postal Directive
97/67/EC, all universal service providers including the Post Office
are required to prepare internal accounts for each of the services
within the reserved sector on the one hand and for the non-reserved
sector on the other. The accounts for the non-reserved services
should clearly distinguish between services which are part of
the universal services, and services which are not. Such internal
accounting systems shall operate on the basis of consistently
applied and objectively justifiable cost accounting principles.
The Post Office is required, on request, to provide detailed accounting
information to the regulator and to the European Commission.
Under Article 15 of the same Directive the Post
Office is required to draw up financial accounts, submitted to
audit by an independent auditor and published in accordance with
relevant legislation.
For the financial year 1999-2000, the Post Office
has complied with the requirements of the Directive to produce
accounts which distinguish between each of its services. These
accounts are available to the regulatory authorities but are not
for publication. The Post Office also published audited accounts
in full compliance with national accounting requirements.
In order to fulfil the requirements of the Directive,
the Postal Services Commission is expected, under the terms of
any licence it grants to operate in the reserved area, to require
copies of the licensees' management accounts to be delivered to
it at regular intervals.
The published accounts of the Post Office company,
to which the property rights and liabilities of the existing Post
Office Corporation are expected to be transferred under section
62 of the Postal Services Act 2000, will have to comply with the
requirements of the Companies Act 1985 (as amended).
Horizon Project for Automated Payment of Benefits
through Post Offices, Eleventh Report of 1998-99, HC 530: Government
Response, First Special Report of 1999-2000, HC 50
1. The inquiry followed the May 1999 announcement
of the abandonment of the Benefits Agency Scheme for paying benefits
through a Benefits Payment Card exclusively usable at post offices,
constituting a grave threat to Post Office income. The Committee
heard oral evidence in June and July 1999 and reported in September
1999.
2. The Committee did not fault Ministers
for their decision. The Report raised a number of related issues,
many of which—such as the suitability of the Horizon automated
platform for branch banking business on-line, the rate of roll-out
of the programme, the future of the Counters network, the move
to benefit payment by ACT, and the future of contracts with Government
departments and agencies—have been revisited in written
and oral evidence in July 2000, on which the Committee reported
in November 2000.
3. The Government Reply received in November
1999 welcomed the Committee's conclusions, with some reservations
where criticisms of departments or agencies was concerned.
The 1999 Post Office White Paper, Twelfth Report
of 1998-99, HC 94: Government Response, First Special Report of
1999-2000, HC 50
1. The inquiry into the July 1999 White
Paper followed the Committee's January 1998 Report and its December
1998 Special Report which had set out its requirements as to the
points to be addressed in the White Paper. Having heard oral evidence
in July 1999, it reported in September 1999. The Committee gave
a broad welcome to the White Paper.
2. The Government's response, received in
November 1999, referred to "the helpful reports made by the
Committee during the course of the review, which have helped in
the development of the Government's policy."
3. Many of the conclusions and recommendations
were in effect accepted and incorporated in the Postal Services
Act, including the extension of the undertakings on sale or exchange
of equity to cover Post Office subsidiaries. The Order reducing
the monopoly threshold for mail from £1 to 50p was revoked,
in line with the Committee's recommendations, awaiting the views
of the new regulator. The announcement on 24 October 1999 of a
study by the PIU into the Post Office network followed the Committee's
conclusion that the network might, as a national asset, require
"an appropriate level of national financial support."
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