Supplementary memorandum by the Post Office
FOLLOW-UP
TO EVIDENCE
SESSION ON
9 MAY 2006.
At our recent Treasury Select Committee hearing[263]
I promised to provide you with some additional information to
assist you in your inquiry.
I am also pleased to advise that there is now
a date in the diary for a meeting between Post Office Ltd and
Brian Pomeroy of the Financial Inclusion Task Force. We would
like to engage more actively with the work of the Task Force,
and hope to discuss with Mr Pomeroy how this can be achieved.
We would also be keen to offer you whatever assistance you might
find helpful in relation to the ATM Task Force you are chairing.
1. CONTRACTS
WITH GOVERNMENT
(Q 596)[264]
The Post Office® has traditionally been
a place where citizens interact with Government. Following the
Gershon Review, Government departments are, quite rightly, seeking
to reduce their expenditure and provide services to citizens in
the most cost effective way. Increasingly this has meant that
departments are using low cost channels where they exist.
The contracts Post Office Ltd currently has
with Government include:-
— Department for Work and Pensions
inc Veterans Agency (Pensions credit and Job Seekers allowance
etc through Post Office Card Account*, Exceptions Service payments
on behalf of Alliance & Leicester)
— DVLA (Motor Vehicle Licensing◇, and Check and Send service for Photocard Licences)
— Passport Agency (Check & Send
service◇ provision of Passport application
forms◇)
— HM Revenue & Customs (Tax Credits
through Post Office Card Account*)
— Home Office (as a contractor of Sodexho,
in relation to Asylum Seeker Benefitsx
— Environment Agency (Rod Licences)
— Northern Ireland Social Security
Agency (Benefits through Post Office Card Account*)
— Dept of Health (European Health Insurance
Card◆ )
— BBC (Television Licences)
* denotes services that Government has announced
will no longer be available through Post Office branches from
end March 2010.
◇ denotes services which
are may be vulnerable as Government have established alternative
channels which may, over time, replace the role of the Post Office.
x denotes contracts that are currently being
re-tendered by Government
◆ E111s have been replaced
by the European Health Insurance Card. Applications can be processed
at Post Office Branches, but this represents a declining business
for Post Office Ltd.
denotes service that contracting party has
announced will no longer be available through Post Office branches
from end July 2006
A key feature of the commercial relationships
between Post Office Ltd and Government is that each department
contracts on a stand-alone basis, to meet their own particular
objectives. It does not appear that any account is taken of wider
policy issues relating to the Post Office network across Government
when awarding contracts.
2. GOVERNMENT
DEPARTMENTS PAYING
PENSIONS/BENEFITS
THROUGH POST
OFFICE CARD
ACCOUNT (Q 656)[265]
Post Office Ltd currently has 4.7 million Post
Office card accounts, of which 4.3m accounts are active and in
use by customers.
There are three departments who pay pensions/benefits
through the Post Office Card Account: the Department for Work
and Pensions; HM Revenue & Customs; the Social Security Agency
for Northern Ireland.
As at April 2006, the proportion of POCA accounts
related to DWP/HMRC/SSANI was split as follows:
3. CHARACTERISTICS
OF POST
OFFICE CARD
ACCOUNT HOLDERS
(Q 661)[266]
Post Office research with card account customers
has shown that they have the following characteristics:
— Child Benefit customers who would
receive payments from HMRC are predominately female (over 96%)
and within the 36-55 age bracket. The socio-economic profile indicates
that this customer grouping is evenly distributed across AB,C1,C2
and DE groupings.
— Pension customers who receive payments
from DWP are divided 60/40 between female and male customers and
as you would expect are predominately over 65 years of age. The
socio-economic grouping indicates that unlike Child Benefit customers,
the majority of those in receipt of pension payments are in the
D/E grouping with the remaining 30% being evenly spread across
the other groups.
— Some customers receive benefits other
than those outlined above, or are in receipt of multiple benefits.
Where this was the case, the research indicated that such customers
were predominately female (63%) and from the D/E socio-economic
grouping. The age profile of customers was again predominantly
over 45, but groupings were more evenly spread within 45-65+ age
band.
4. A COPY OF
A LETTER
THAT I HAVE
SENT TO
RICHARD BANKS
AT THE
ALLIANCE & LEICESTER[267]
ON THE
SUBJECT OF
SURCHARGING CASH
MACHINES (Q 581)[268]
You are no doubt aware that on 9 May I appeared
with Graham Halliday before the Treasury Select Committee (TSC)
enquiry on Financial Inclusion and, as expected, we were questioned
quite extensively on our approach to ATMs in Post Office branches.
During questioning, the Committee expressed
concerns about various aspects of the ATM arrangement we have
with you, and asked that we write to you regarding them—namely:
— the increase in the surcharge applied
from £1.50 to £1.75
— the transfer of 45 machines earlier
this year from free to surcharging
— whether you would be prepared to
allow us to replace these 45 machines with free Bank of Ireland
machines prior to the expiry of the licence agreements for each
site.
With regards the first two points our feelings
were made clear at the time notice was served. However, given
the questioning at the TSC, I would ask you to reconsider your
decisions.
I feel that a charge of £1.75 is higher
than it needs to be in the interests of our customers, which is
why, in our new Restrictions Policy, we make a recommendation
that where a surcharging machine is deployed after receipt of
a waiver, the charge should not exceed £1.50.
In terms of the 45 machines, if you are unable
to revert these to free, I will repeat again the offer made to
your organisation by my ATM team that we would be more than happy
to install free Bank of Ireland ATMs. I appreciate this would
mean effectively breaking the contract early for these sites but
surely, for the benefit of the consumer, this is the right thing
to do.
263 Ev 96-108 Back
264
Ev 100 Back
265
Ev 107 Back
266
Ev 107 Back
267
Alliance and Leicester's response to this letter is printed at
Ev 186 Back
268
Ev 98 Back
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