Select Committee on Trade and Industry Minutes of Evidence

Examination of Witnesses (Questions 120 - 139)



  120. All these people thinking about taking on a small business, a sub post office, still do not know what the business is going to be, because the Government have not told you yet, when these accounts are going to come in, how many will be capped?
  (Mr Roberts) That is the point I was trying to make to Mr Djanogly. That is the big uncertainty. Until we can say to them "Look, it is going to be like this. This is the amount of business we believe will happen" there will continue to be this uncertainty in the minds of sub postmasters.

  121. Extending that, part of the other solution, looking to get more people through the door and making more use, was the idea of General Practitioner and Your Guide.
  (Mr Roberts) Yes.

  122. There is a pilot on at the moment.
  (Mr Roberts) Yes.

  123. Which sort of department is taking the lead on working with you on that pilot?
  (Mr Roberts) It is certainly at the moment the DTI.
  (Mr Rich) The DTI are our contracting authority for this. They have given us a figure of £25 million from the £270 million that was augured for the Post Office network improvement work generally last year. As you quite rightly say, there has been a successful six month trial. It is not only the DTI that are involved. This is meant to be a symptom of joined-up Government as well as local authorities and other voluntary organisations involved. In fact, we have had 30 content providers from both Central Government and local government putting together services in a way that make sense for the customer. Subject to evaluation when the six month pilot ends in March, so far it looks popular, well-used and respected by clients.

  124. So in terms of joined-up Government, for you the access point is the DTI?
  (Mr Rich) At the moment that is the contracting authority. Hopefully with a successful evaluation once we get into roll out, which is another plank of the PIU Report, then we would like to get clarity on that sponsoring department, because we do not have that yet.

Mr Lansley

  125. I was wondering if I might be clear on those various forms of accounts that you are describing. Can you be certain that they will be free to people, without charges to those who use them?
  (Mr Roberts) We can certainly be clear about our own Post Office card account, there is no question of charges on that and there are no charges on the PAT 14 account.
  (Mr Rich) There are no charges for transactions at the counter.

  126. As far as your own card account is concerned, the costs of supplying that, how will they be met?
  (Mr Rich) They will be met by a transaction fee that will come from Government or DWP. I think part of that will be met from the contribution that I believe the previous Secretary of State for Industry negotiated with the banks in setting up universal banking.

  127. Do you know the level of the fee that you will be paid for that transaction? Are you aware of any limit on the part of Government on the contribution they are willing to make to your costs of administering the card account?
  (Mr Roberts) We are in the middle of intense discussions with DWP on that just now, which is around the fee that we will get per transaction.

  128. And the number of card accounts which could be backed up?
  (Mr Roberts) No, we are not negotiating that. That is very much a matter for Government. I think it will be a question of how, at the end of the day, Government decides that it will offer to customers the way in which they get their benefits. From our point of view we will take absolutely everything that we can get and then we will negotiate the fee per transaction. The amount or the way that it is done, Mr Lansley, is entirely a matter for DWP.

  129. Would it still be true, regardless of the outcome of those discussions, that so far as you are aware anybody who wishes to take their benefits in cash will be able to do so?
  (Mr Roberts) I am working on the basis that I have seen a number of statements from previous ministers that said very clearly exactly that, that anybody who wanted to continue to receive cash at a post office would be able to do so.

Sir Robert Smith

  130. As long as the post offices are still open?
  (Mr Roberts) As long as the post offices are still open, indeed.


  131. Ms Cassoni, could I ask you a question. You have come into the organisation from the private sector, you are dealing with Government and I imagine you are involved in this. Is the Government behaving towards Consignia in a way that it would behave towards another plc or is it behaving as you would imagine it would have behaved towards the Post Office?
  (Ms Cassoni) If I was contracting with the Government in the private sector I would find it slower to contract with Government than to contract with other commercial entities. I think my experience in Consignia is similar, probably somewhat slower because they are also the shareholder. There is this confusion between shareholder and contractor which I think we have now resolved, we have now established that. It is not normally the same case that we would see in the commercial sector.

  132. I use a rather vulgar American expression. Do you think that they still view Consignia as a kind of public sector patsy when it comes to an operation of this nature where they think they can squeeze you because you are still within the public sector even if you have a kind of extended arms' length relationship?
  (Ms Cassoni) I think that in the new relationship we have entered into we are still finding our way, as Mr Roberts said. I think the Government is trying to deal with this on a commercial basis but it is also new for the Government and joining all the different sectors of the Government up together to negotiate with us is proving somewhat of a challenge, but I think they are endeavouring to deal with us in that manner.
  (Mr Roberts) One of the things that has been important this year has been the role of Office of Government Commerce. We, together with them, have produced a Memorandum of Understanding which affects all the Government departments that now deal with us and the OGC brokered that. I think that has been enormously helpful. Taking your patsy point, it does say in there that the intention will be for us to get a sensible commercial margin on the work that we do for Government departments. I think we are getting some of those disciplines in driven by the Office of Government Commerce.

  133. The Office of Government Commerce is co-ordinating?
  (Mr Roberts) Yes.

  134. You are dealing with the DWP, your answerable department is the DTI and then there are the dark forces of the Treasury behind it all. Would that be a reasonable summation of the situation?
  (Mr Roberts) I think that is an entirely reasonable summation of the situation.

  Chairman: I think it is one to which we will return in due course. I think you and I have been living with this for what seems like years, Mr Roberts. It is one that has caught our interest in the past and will continue to cause us some concern.

Mr Djanogly

  135. That goes back to the first question I asked, do you conceptually think part privatisation works?
  (Mr Roberts) I think I have got to give you the same answer which is that it is too soon to say after just 12 months. As Marisa Cassoni said, we are all still trying to see our way through this. I do have some concerns, I hope they will disappear but if they do not then doubtless I shall be back here saying to you that this model is not working.

  136. What would be a fair period to say that this model has not worked?
  (Mr Roberts) I would have thought that you would give it another 12 months. After two years we will have done two cycles, as it were, of working with Government, budgeting, strategic planning. At the end of a couple of years if it is not working then I think it will be clear by then.

  137. Thank you. Could I just go back to my original question, Chairman, which was in relation to ACT. Having heard what was quite a technical discussion in relation to the workings of the scheme, your average Joe Bloggs, three million of whom signed a petition to Downing Street saying that they did not want the scheme at all, do you feel that they have received an adequate explanation of how this is all going to work? The other concern is the National Federation of Sub Postmasters are saying one-third of sub post offices are going to close as a result of this.
  (Mr Roberts) My honest answer to your question is I do not know but if I was doing it, and I am not, the issue for me would be do not explain it too early if it is still coming in 18 months away because people will have forgotten. I think the test will be that if it is coming in on 1 April 2003—and I am not involved in this in detail—my view would be six months before that an enormous amount of work needs to be done, particularly with the elderly, to make sure that they understand what the choices are, they understand how it is going to work, and they do not feel somehow or other this is forcing them away from post offices.

  138. But the plans to do that have not yet started?
  (Mr Roberts) Not as far as I am aware but they will come out of the Department for Work and Pensions. It is their product, it is their change. We cannot do it until we know what is going to happen.

  139. You have to sell it, do you not?
  (Mr Roberts) Of course, yes, and we will do our part in that. It goes back to the Chairman's previous question. There is a very clear view in DWP that this is their product and they will want to control how messages are passed across to what they see, quite rightly, as their customers.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 12 February 2002