Examination of Witnesses (Questions 120
TUESDAY 11 DECEMBER 2001
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
(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
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
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
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
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
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
(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
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
(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
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 2003and
I am not involved in this in detailmy 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.