Bard and benefit at your post office

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The Independent Online

Technology Correspondent

Post offices could sell coach, theatre and train tickets using a new system of computer terminals being set up to administer benefits payments, in what has been heralded as the biggest change in the post office counters' history.

Having rubber-stamped an agreement with the Benefits Agency to handle the complete range of benefits payments through 20,000 post offices, the corporate arm of the Post Office is looking for ways to expand its revenues using the new terminals, which are expected to be installed by the end of 1998 in a pounds 200m project.

The terminals will help to replace the system of payment books and Giro cheques with automatic payment using some sort of identity card. At present, Post Office Counters handles about pounds 300m of benefits payments annually, making a third of its total revenues: this consists of 940 million order book payments and 82 million Giro encashments.

The computer terminals will be able to link to the Benefits Agency system, but the Post Office also intends that they should be able to offer facilities using electronic payment and ordering methods. "It will be one of the biggest and most advanced schemes of its kind in Europe," Richard Dykes, managing director of Post Office Counters, said.

Five companies are bidding to provide the computer system. The winner is expected to be announced later this year.

Automation of payments for benefits through post offices was mooted two years ago, and was seen by Mr Dykes as essential to keeping up to 5,000 of the smaller rural post offices open. At the time, the rural network was losing about pounds 35m a year.

But the formal announcement in May by Peter Lilley, the Social Security Secretary, to computerise the counters was seen as necessary to reverse the trend.

The Benefits Agency expects the new system to reduce fraud, presently thought to be running at pounds 155m a year.