1.9 The revenue from handling benefits payments account for just over a third of Post Office Counters Ltd's income of £1.17 billion. This business is also important because of the sheer volume of customer visits that it brings and the opportunity to offer these customers other services available from Post Office Counters Ltd and from co-located private retail outlets. Benefit payments also put cash into the hands of customers visiting post offices. In the early 1990s, Post Office Counters Ltd had operated a pilot counter automation programme in the Thames Valley area. But they concluded that the business case for counter automation could probably not be sustained without the commitment of the Department of Social Security to allow use of automated systems for benefit payments.
1.10 Post Office Counters Ltd told us that they had seen the benefits of the Benefits Payment Card project to their business as:
■ providing a service that the Department of Social Security would wish to use now and in the future;
■ supporting the national network of post offices. Though typically some 200 local post offices leave the network each year through natural wastage, Post Office Counters Ltd still expected on award of the contract in May 1996 to automate over 19,000 offices through this project;
■ linking the post office network more effectively, (for example to reconcile accounting records);
■ to provide scope for generating new business. Increasingly, new and possible clients expect post offices to be linked to an automated network; and
■ to support previously automated post office systems.