Post Office in major network modernisation programme

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IT will claim part of Government's £1.34 billion investment

The Post Office is hoping to introduce changes to its IT that will speed up transactions as part of a five-year modernisation programme between 2011 and 2015.

Edward Davey, secretary of state for Business, Innovation and Skills, revealed plans for the Post Office network, including “a range of IT improvements to make transactions quicker and simpler” in a parliamentary written answer.

This technology upgrade is in addition to expanding the Post Office’s online offerings.

The Post Office will want to avoid the risks of another controversial IT project after the Horizon fiasco.

A report in July 2009, ‘Post Offices – securing their future’, by the parliamentary Business and Enterprise Committee, criticised the Post Office’s Horizon point of sale (POS) system, saying it needed to offer more automation to improve efficiency of Post Office branches.

The Horizon project began in 1996 under the name of Pathway. It aimed to computerise the Post Office’s network and automate the payment of benefits to prevent fraud.

However, the Pathway project was scrapped in 2000 after a dispute over the technology, resulting in a £180 million write-off. The same year, a renamed and expanded version of the project, now called Horizon and involving the same supplier, ICL (now Fujitsu), was announced. It modernised the Post Office counters network by installing PCs and other electronic equipment in 18,000 branches across the UK, at a cost of £1.4 billion.

The National Audit Office consequently lambasted the Post Office for wasting as much as £881 million of taxpayers’ money as a result of the project change.

The government is supporting the latest modernisation of the Post Office network with £1.34 billion in funding, which will also be used to enable other measures such as longer opening hours. It aims to create a new network that will have around 4,000 main post offices branches in town and city centres across the country.