Examination of Witnesses (Questions 100
TUESDAY 11 DECEMBER 2001
100. Apart from universal banking, which I accept
is a separate but important issue, we are getting continuing complaints
that the Post Office does not help with new equipment, new security,
CCTV camerasthere is a massive outbreak of crime against
rural sub post offices at the moment. Are you taking measures
to sort this problem out? Is there going to be a future for rural
sub post offices?
(Mr Roberts) Yes, I think there is because one of
the other things that we are in the process of discussing with
the Governmentand again this came out in the Performance
and Innovation Unit Reportis the Government is intending,
via help from Postcomm, to look at ways in which they can help
us sustain rural post offices, in other words to put some money
into rural post offices.
101. That does not come in until 2003.
(Mr Roberts) No, and that is the big problem because
it is the uncertainty between now and 2003 where we are working
as hard as we can to try to make sure people do not leave sub
post offices. We have done a lot of work in rural areas to try
to make connections with the local authorities and the various
rural bodies to maintain them. I think we have now got sub post
offices in virtually every conceivable place in terms of making
it easier for people to maintain them. What is difficult, and
I do not think it is just a case of advertising, we do help them
on security, is getting people at a time of uncertainty to say
"Oh, I am prepared to put my money into running a sub post
office", ie the private side of that business. Now I am not
as well qualified as the Federation of Sub Postmasters to make
this case but it does seem to me that is where the major impact
has happened. The stable income that people could have expected
from the post office side of their business
102. Is it not your job to resolve that issue?
(Mr Roberts) No, it is not. It is our job to help
by making sure that we can give people the best opportunity of
understanding the kind of income they are going to get from the
post office business. It is not my job to resolve the issue of
whether the local village shop in a rural area is going to be
sustained or not, it is normally the two things. I can only do
the part that I understand and have control over.
103. Can I just follow this up. Very often when
rural sub post offices are closed, and you are looking for somebody
to take them over, you are also, at the same time, asking them
to commit themselves to turnover targets and in effect to guarantee
the levels of business in advance. Now how often are you remitting
that kind of obligation?
(Mr Roberts) I think we have taken that away. Certainly
we used to have the idea that there was an upfront fee and that
people then had to have those targets. Certainly since the PIU
report we have taken that right away, so there should be no pressure
on them to deliver a certain level of business. That has gone,
Mr Lansley, gone completely.
104. It has been mentioned about security, and
security is very important to rural post offices. They feel they
are being failed all around. I do not know what help and support
you are giving, as I know that the police have withdrawn direct
press button alarms to themselves, they now go through some security
company and by the time that has happened, one, they have been
robbed and, two, weapons have been involved. I do not know what
you are doing nationally to negotiate on behalf of these rural
post offices which are suffering violent crimes which are taking
place at the moment. We are seeing a reduction in service coming
from the police and somehow it has been said to me that you actually
turn a blind eye to supporting them.
(Mr Roberts) No. I do not think that is true at all.
We do quite an intensiveI will bring Mr Rich in in a secondrisk
based assessment around the 17,000 post offices. We have, also,
a fairly substantial budget every year which is about giving themI
will not go into the detail but I can let you have it if you want
itthe various security measures that we now put into post
(Mr Rich) If I may add to that. You are right that
we have seen a general pattern of crime spreading from some of
the urban areas back out into the rurals. In fact, we are adopting
plans now to spread that security and introduce new security arrangements
and invest in rural sub post offices over the next few months.
105. Can I pursue this particular point. They
did have the panic button which went direct to the police station.
That has been taken away in some rural post offices even though
they have already been robbed, that has been taken away. What
are you doing nationally to ensure that link is put back direct
to the police?
(Mr Roberts) I do not think that was a link we put
106. It was a link that rural post offices had.
(Mr Roberts) It may have been that the rural post
107. It has been taken away because the police
say "We do not think it is appropriate". What have you
done to try and help the rural post offices who are insisting
that they need it?
(Mr Roberts) They may have put it in on the private
side of their business, I do not think it is something we have
had in on the post office side of the business. You get two different
levels of security.
108. On this issue perhaps you could write about
(Mr Roberts) It may be better if we do that, Chairman.
Chairman: If you could clarify the matter. We
are maybe not quite understanding each other here.
Sir Robert Smith
109. At the heart of this insecurity for all
rural sub post offices, all post offices in a sense, what is the
figure, again, that you are going to lose in income or they will
lose in income with the change in the way benefits are going to
(Mr Roberts) It is about 30 per cent.
(Mr Rich) In some cases it is up to 37 per cent.
110. A global figure.
(Mr Rich) At the moment 35 per cent.
111. I wondered if you had a ballpark figure
in the hundreds of thousands?
(Mr Rich) About £400 million.
112. Can I just pick something up. It would
not be in rural post offices the £400 million, it would be
in all post offices.
(Mr Rich) Yes, in all post offices.
113. And urban ones where there are higher levels
of benefit payment, it will be more significant than it will be
in a rural situation?
(Mr Roberts) Yes. Except that in the rurals, Chairman,
most rural post offices, the major activity is the payment of
pensions and benefits and the sale of stamps, so rurals do tend
to get hit heavily.
Sir Robert Smith
114. With all that going out of the system that
is a big uncertainty. Where do you find progress is on the universal
banking which is supposed to be part of the unravelling of the
uncertainty? Where are the proposals at in terms of universal
(Mr Roberts) In terms of the universal bank at our
end, we are in the process of developing the link between the
automation at the front of the counter and the banking engine,
which IBM will be preparing for us, which will then link through
the link network to the back system and from there to the Department
of Work and Pensions so that money can then be automatically brought
to a post office or somebody's account. We are on track to deliver
that before, obviously, 1st April 2003. Where we are less sure
at the moment is what happens after that in terms of the migration
from benefit payment to ACT because that is under the control
of DWP. I think what is an important development for the next
few months is that the Office of Government Commerce is going
to look at this project of the universal bank from end to end
and do what they call a gateway review and that will look right
across, whether we are up to speed and whether we are ready to
take all this on. I think it will start from the Department of
Work and Pensions' end and look at all their systems as well.
That is a check which I think has come out of various select committee
reports here and I think will be a very good signal of exactly
how ready we are. We believe we are ready and up to speed with
what we have got to prepare and this will be a test for us and
it will test the whole thing from end to end.
115. Just over a year away and it is still
(Mr Roberts) That is okay. The planning has always
been that it will be during 2002 that all of this will come on
stream to be ready for April 2003.
116. The universal bank is not the whole picture,
is it, in terms of the benefits? The basic bank account is not
going to please everyone.
(Mr Roberts) No, you are quite right. There are three
types of banking. We have some commercial arrangements with high
street banks where they can use our post offices for simple transactions,
cashing cheques, that kind of thing. There will then be, as I
understand it, once the ACT is introduced, the option for the
individual customer either to have their benefit or Government
payment made through one of those types of banks, ordinary joint
stock bank, or through one of the PAT 14, the limited bank accounts
that joint stock banks also run, or through what we are now calling
the post office card account which is something which we will
run through post office branches. They will have a choice of receiving
their money through either of those three routes. Where we have
commercial arrangements with the banks we will be able to handle,
at post office counters, any one of those routes. The system that
I tried to describe will cope with those transactions on behalf
of banks or direct to the card account.
117. Is your understanding that there will be
some kind of cap on the number of card accounts?
(Mr Roberts) I think that is a great debate at the
moment about what level of accounts will come through the post
office card account. We have said that in one sense we do not
mind, the issue for us is retaining as many of the payments as
we can across post office counters. Now whether that is through
the post office card account or a PAT 14 account or another bank
account, I do not think we really mind. The issue is that we retain
it in the post office. What I would hope is that we will let this
find the right level and the customer will be given some kind
of choice of exactly how they want to receive their payments.
It is then up to us to make sure that as many as possible come
through the post office.
118. You have had no indications then from any
Government Department that they want to put a cap on the number?
(Mr Roberts) I have heard all sorts of things about
caps and not caps and whatever but we have nothing at the moment
which says there is going to be a specific cap. I have heard all
sorts of figures quoted over the years but nothing definite.
119. Have you been given a timetable when you
will know for certain what the relationship will be between these
(Mr Rich) The migration plan from ACT to banking is
held by the Government. We support them and help them on that.
They have not given us a final date for that to be done yet.