Benefits rethink leaves Post Office in turmoil

The government has yet again moved the goalposts for the delivery of a benefits payment system, leaving the Post Office in turmoil. The news comes less than one year after the Post Office abandoned ICL's original Pathway system.

The future of many Post Office branches is now on the line because of the government's strategy to redirect benefits payments into the banking system.

John Main, sales and services general manager of Post Office Network Eastern Territory, told Silicon.com: "Clearly there is a risk and a threat to quite a big proportion of our business because a third of our income is now derived from the benefit payment business. If a significant part of that goes, then we've got some real worries about the viability of some of our post offices."

The Post Office and ICL joined forces in May 1996 on Pathway, which was designed to automate benefits payments. But the project was abandoned last year due to delays and debts and superseded by another ICL contract: Horizon. The benefits payments policy was changed after the Horizon contract had been awarded.

Although benefits will now not be paid through the automated systems currently being installed, the government insists post offices can still survive by working with the banking system.

Alan Johnson, minister for competitiveness at the DTI, and the man in charge of the Post Office network, said in an official statement: "We need to find ways of getting more people through the doors of local post offices. If we can bring basic banking back to these areas through the post offices this would be a major step in the revitalisation and modernisation of the network."

Main made his comments on the same day that the National Federation of Sub-postmasters submitted a petition to Parliament protesting about the policy's threat to Post Offices.