New UK Post Office chief stamps his authority

Alan Cook is touring the UK's branches to see how he can stem losses of Pounds 100m a year, writes Richard Fletcher

ALAN COOK, the newly appointed boss of the Post Office, has been touring Britain meeting the nation's sub- postmasters and mistresses.

In Wilstone, Hertfordshire, almost the entire 320-strong village population turned out to meet Cook, who joined the Post Office seven weeks ago. "They knew we were coming," he said.

If the former "man from the Pru" had any doubts about the importance of his new job, the reception from the Wilstone villagers left him with no doubts.

Cook is the man charged with securing the future for the country's 14,500 post offices. It is a tough task: not only is the network losing about Pounds 100m a year, but its position as the government's cashier -doling out cash to pensioners, mothers and the unemployed -is being eroded as benefits are paid directly into bank accounts. If Cook is to save the nation's post offices, he has to find a new role for all the sub-postmasters and mistresses across the country.

Cook left school aged 16 and went to work for the Prudential in the company's car and home-insurance division -a business he would later run. After 30 years he became chief operating officer before leaving to run National Savings & Investments for the Treasury.

For Cook the key to success is exploiting the Post Office brand to sell financial services.

"The Post Office is a very trusted brand, and in financial services that is quite a valuable commodity," said Cook -who was dubbed "Mr Premium Bond" after increasing sales by Pounds 10 billion at National Savings & Investments in just three years. He is now planning to take on the high-street banks and insurance companies with a range of financial services. And he argues that his experience at National Savings will be invaluable.

"The common attribute is the hugely trusted brand. There is a great opportunity for us, providing we come up with high-integrity, simple, good-value propositions for customers that build on the trust that people have."

The Post Office is the market leader in foreign exchange -a lifeline, claims Cook, for many sub-postmasters and mistresses -and the third-largest operator in the travel-insurance market. Cook also believes that the Post Office can compete in the home and car-insurance markets.

There is already a Post Office credit card and earlier this month Cook launched an instant-access saver account offering a competitive 4.75% interest rate.

"The public's association of the Post Office with money and matters that are financial services means there is a really significant opportunity for us," he said. "The British public are used to putting their money in the hands of the Post Office. This year we will have collected Pounds 6.7billion of investments."

Cook is encouraged by the growth of supermarket banks and believes the Post Office brand can be a winner in this sector.

"Banks and insurance companies have lost a lot of consumer trust over the last 10 or 12 years with different mis-selling scandals," he said. "Some of the most successful distribution deals are where the bank or insurance company is actually manufacturing the product and large household, trusted names are doing the distributing. The large distributor has the customer's trust and specifies what the product would look like."

Cook also intends to branch out into other areas, such as telephony -offering fixed-line services as well as directory-inquiry services.

But mail will always be central to the offer. "We are the front office of the Royal Mail group," said Cook.

The growth of internet shopping -and in particular Ebay -has dramatically increased the number of packages being sent. "They troop in with all these parcels. You can never tell how technology is going to work out. We have seen a significant increase in the number of packages.

"There is more we can do to make the whole business of posting and receiving parcels -which is clearly on the up -an easier process," he added.

Cook is also examining ways of cutting costs as he attempts to stem losses.

The Post Office has been piloting mobile post offices as well as "mini branches" in pubs and police stations.

"It is not necessarily a profitable way of providing that rural social service – but it is a much more cost-effective way," said Cook.

At present the government makes a Pounds 150m subsidy to the Post Office to support the rural network of post offices. The deal ends in 2008 and Cook is already renegotiating with the government.

He argues that the social- network payment is essential. "If there was no payment from government to support the social service that is provided, it would be very difficult to make the entire network profitable," he said.

Cook is now working on a five-year plan -which he hopes to have completed by September.

"I have to produce a clear, coherent vision about what the business is. Seven weeks in, I have not got there. I have shaken more hands than you could possibly imagine and been to more places than you could imagine," he said.

But he has already identified a number of problems, including the need to reduce queues and improve the appearance of post offices.

"One of the areas I will be addressing is how rapidly people do get seen," said Cook.