Britain's post offices are being automated at a rate of 300 per week and all 18,500 are on track to be fully computerised by spring 2001, the UK government said on Friday.
Stephen Byers, Trade and Industry Secretary, said at the publication of the Postal Services Bill, which aims to transform the state-run Post Office into a limited public company, that more than 2,000 sites have already been fully automated.
The £500 million computerisation project will enable the Post Office to offer its 170 products through touch-screen terminals.
The system will also be compliant with smartcards, despite the UK government withdrawing plans last year to use smartcards for benefits payments.
Alan Johnson, Competitiveness Minister, said: "Full computerisation means the Post Office can get into new areas of business."
A Post Office spokeswoman said potential new business areas could include handling tax returns, contracts with government agencies, and becoming a single point of contact for citizens wanting to notify agencies of changes of address.
Services giant ICL is installing the IT infrastructure, which will also be linked into government systems in the UK.
Byers said the Bill should be seen "in the context of massive changes in the postal service industry in Europe and the world. We want a framework of legislation to ensure the Post Office will be in a position to offer a world class service to UK consumers."
The IT modernisation programme will move into its second phase in 2003, when the Post Office migrates towards automatic credit transfer (ACT). This is scheduled to be complete by 2005.
Although an end to the process of paying welfare benefits across Post Office counters would mean massive cost savings, the UK government said today that people will still be able to collect benefits in cash.
Byers explained: "Order books and giros are based on ration books. We can do better than that in the 21st century. Everyone, however, will have a choice. People can receive cash over the Post Office counter, and that choice will stay beyond 2005. This ensures that the two million people who are bankless are protected.
"Each giro cashed costs 79p and every time an order book foil is presented it costs 49p, compared with each ACT transaction of 1p. The economics are overwhelming," he added.
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