Select Committee on European Union Written Evidence

Memorandum by the Post Office


The Post Office would be concerned about any e-commerce policies which disregard the fact that the socially excluded do not have easy access to the Internet. Furthermore, The Post Office believes that IT-led policy which does not focus on customers needs could actually increase social exclusion.

  Empirical evidence and research indicate some of the potential difficulties with achieving widespread take up of e-commerce, including:

    —  Growing acceptance of new technology is counter balanced by growing technological exclusion (eg 40 per cent of United Kingdom unbanked households do not have a phone).

    —  Evidence that consumers require new channels to supplement rather than replace traditional channels.

    —  Growing social inequality in the United Kingdom, which has the third worst "poverty index" in the developed world.

    —  New players in traditional industries are generally reluctant to target poorer sectors of society.

    —  Existing players are increasingly adopting a "supply push" approach (eg charging for branch or ATM usage) to shed low net worth customers or accelerate channel switching.

  Taking the example of the United Kingdom Government's own drive towards e-government, this approach is characterised by the fact that Government Departments have e-government targets but not multi-channel access targets. Recent Cabinet Office research via The Peoples Panel revealed that 25 per cent of citizens over 50 would refuse to use the Internet or telephone advice lines. This led Ian McCartney to comment "we must ensure that the use of new technology does not isolate older people". However, there has been no discernible change in the approach from Government.

  Staying with the Government's e-activities, the general industry view is that e-government is being achieved at faster rate than joined-up-government. However, because many of the cultural barriers within Government have yet to be tackled, IT is often badly deployed. Thus various recent studies by Government (see extracts at Appendix 1) have been critical of high profile failures in Government IT projects caused by a lack of user focus and a failure to learn from past mistakes.


  The Post Office believes that the development of e-commerce must be within a multi-channel framework and that The Post Office has a unique role of offer in providing citizens with a socially inclusive, multi-channel network for the following reasons:


  The Post Office consistently rates highly with both consumers and opinion formers for qualities such as trust, service, importance to the community, familiarity etc. These brand strengths are particularly important in the delivery of Government services.

Multi-channel reach

  The Post Office can offer 18,500 outlets, delivery to every household and business in the country and call centres. This reach is particularly valuable in areas such as rural and deprived wards which are not well covered by other channel providers. In addition The Post Office is developing Internet and kiosk/ATM services to provide additional choice and access both within and outside post offices.

Customer base

  28 million different customers make over 43 million visits to post offices every week. The socio demographic breakdown of these customers closely represents the United Kingdom population in terms of class, age and sex. Moreover our most frequent visitors are the more vulnerable segments of society, ie females, the old, the poor, who would not necessarily have easy access to the Internet. SMEs are also a key customer segment with over 90 per cent of all micro-business (below nine employees) using post offices regularly.


  Post offices deliver over 170 different products and services and Government Services are a core offering within this range. We intend to offer an even broader and deeper range of Government Services and information to underline our role as a specialist provider in this market. Our ability to provide and "bundle" Government Services with a range of appropriate voluntary and private sector services (eg bill payment) will also be vital.


  Our ability to deliver/collect information, products and payments securely and on a large scale is unrivalled. In particular our capabilities in advertising, cash handling, transaction processing/accounting, fraud prevention and distribution/logistics can be invaluable to the delivery of Government and other services.


  The Horizon programme will see all post offices automated and networked with a highly secure system. The technology includes bar code/mag Stripe/smartcard readers, on-line messaging/authorisation processes and printing.

  An automated post office network can provide IT for all in a familiar and friendly environment.

Economies of scale

  The national coverage and scale of The Post Office can deliver significant benefits in the delivery of Government and other services which no other organisation can offer. These benefits include consolidation opportunities, economies of scale and nationwide consistency.


  Collaborative working will be essential in the co-ordinated delivery of e-commerce policies. The reputation of The Post Office and its position between the public and private sectors make it a trusted and attractive partner for a range of organisations. In particular we believe we can be an effective catalyst for partnerships between Government Departments, Local Authorities, the voluntary sector (eg NACAB) and a range of private sector IT service providers. We are already in partnership discussions with a range of these organisations.


  Research via the Peoples Panel has identified post offices as the preferred location of a one-stop-shop for Government Services over banks, supermarkets, local authorities and libraries.

  Ian McCartney has convened a "Channels" consultation group to which The Post Office was invited along with banks, supermarkets and a range of cable/digital TV companies. The attendees have commented on the Government's channel policies, which were outlined in a document attached to the White Paper. The Post Office response was submitted w/c 7 February (see Executive summary at Appendix 2).

  The main issue we have highlighted is that the policies do not constitute a Government channel strategy and some of the policies may be counterproductive (eg cause greater social exclusion).

10 May 2000

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