'Big Brother' clocks in at the Royal Mail

The Royal Mail, which earlier this month revealed an 86 per cent plunge in profits, is spending hundreds of thousands of pounds installing television screens in every delivery and sorting office in the country.

Management will use the screens to convey information and updates on the company’s performance to staff, including speeches by chief executive Adam Crozier and chairman Allan Leighton – prompting wags inside the state-controlled postal group to dub it “Allan Leighton Direct” and to compare it to George Orwell’s Big Brother.

A Royal Mail spokesman declined to comment on the cost of the new communication system, but insiders believe it will set the business back considerably. The TVs are understood to be 42-inch Fujitsu screens, which retail for around GBP2,000 each.

The Royal Mail will be able to negotiate a discount but it is still buying a considerable amount: at least one will be installed in every site, including 1,400 delivery offices, the 470 post offices the group manages directly, administration centres and other depots. The spokesman defended the communication system, commenting: “It’s absolutely normal good practice for any large company to have effective and swift communications with its people, especially when we’re operating out of many different sites nationwide.”

But the move comes at a time when the Royal Mail is being forced to tighten its belt as it confronts a gaping pension black hole and struggles to adapt to increased competition. Earlier this month, the group confirmed that interim operating profits had come in at GBP22m, against GBP159m a year earlier. Much of the decline was blamed on costs associated with the pension deficit, which rose by GBP1bn to GBP6.6bn. But the Royal Mail has also lost a number of corporate clients, including Carphone Warehouse, BT and Centrica.

Employees, meanwhile, are being told to keep spending to a minimum, at least until the end of the financial year next month. The First Line Fixed scheme, for example, where a pool of money is made available for morale-boosting items such as kettles and TVs for staff rooms, has been temporarily suspended.

The Government has provided fresh funds for the business, but last week the European Commission launched a probe following complaints from competitors that the money amounted to illegal subsidies.