More than £100m to be spent on Post Office IT

Up to a quarter of the £450m earmarked by the government for rural post offices could be spent on IT.

The Department of Trade and Industry announced on Monday that it will invest £150m a year for three years to safeguard the future of the post office network.

Some £79m will be allocated to 'front line systems' in the first year, with a further £74m in the second and third years. As much as half of that money will be spent on IT systems, a Post Office source told Computing.

The National Federation of SubPostmasters (NFSP) will decide how that money is spent, but the organisation says it is too early to be specific about how the funds will be allocated.

'The government has come up with this figure, now it is up to the Federation to discuss with the Post Office how it will be deployed,' said an NFSP spokeswoman.

It is likely that much of the expenditure will go towards maintaining the Post Office's automation system, Horizon.

Some 40,000 Post Office terminals are running the system, 12,000 of which are in rural areas.

A Post Office spokeswoman says Horizon costs £100m a year to maintain.

'A fair amount of this new money is to keep Horizon ticking over. It costs £100m to keep training and software up to date,' she said.

The NFSP says it essential that Horizon is maintained properly.

'Eventually all paper-based systems will have to be automated,' said the NFSP spokeswoman.