Select Committee on Treasury Appendices to the Minutes of Evidence


Memorandum from the Association for Payment Clearing Services

  APACS plays a major role in the distribution/re-distribution of "wholesale" coin throughout the UK, via a weekly clearing operation involving the main banks and the Post Office. These institutions currently act as the interface between the key coin users, the large retailers, and the coin producers (the Royal Mint). Accordingly, it is appropriate for APACS to be counselled on any matter that could affect the way in which the country's coin requirements are to be satisfied.

  Over the past 12 months APACS has worked closely with the Royal Mint on a wide range of issues, most of which have been geared to efficiency enhancement regarding coin production. In particular, much work has been undertaken in respect of coin requirement forecasts, naturally a key factor in production management at the Royal Mint. However, no matter what approach has been taken to this exercise, the only certainty is that any forecast will prove inaccurate in practice. The basic cause of the variances is that retailers change their pricing policies far too often (for commercial reasons) for demand to be predicted accurately, even in terms of bulk coin demand. The outcome is either severe shortages, or massive overstocking, of specific coin denominations on a regular basis. The enclosed analysis sheet for Year 2000, and summary statement, serves to reinforce this comment.

  However, perhaps the time has arrived for a major re-think in terms of coin supply to the UK economy. Maybe this is the opportunity for bulk coin production/re-distribution/practical provision/repatriation to be reviewed again with a view to ascertaining, and implementing, the most efficient total coin flow for all involved parties. APACS would, most certainly, be keen to participate should such an exercise be initiated. In this concept the possibility of "joint venture" activity springs to mind.

15 January 2001

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