Royal Mail management review on hold

The Royal Mail, which last week called for a 6p hike in stamp prices, has shelved a controversial management shake-up.

Insiders had said the state-controlled group was looking to introduce new pay scales and positions, meaning staff would have been forced to reapply for their own jobs. The Amicus union was known to be concerned, and told The Independent on Sunday last autumn that it was seeking meetings with senior management over the issue.

However, the Royal Mail, which is striving to axe costs in the face of stiffer competition, has decided to shelve the review while it focuses on investing fresh funds in the business. The Government has pledged to provide more than GBP 2bn, a large chunk of which will be used to modernise sorting machinery.

“We have got all the funding in place and we need to focus on that,” said one senior source. “[The management review] hasn’t been parked entirely. There are bits that can be done quickly. It’s more of a phasing in.”

A Royal Mail spokesman added: “The management programme continues… We remain totally committed to developing our managers [to] best meet the challenges we face.”

Union insiders were pleased that the review had been put on hold. “It makes sense for them to pause,” said one. “There are a number of challenges: competition, loss of contracts, revenues. We want to talk to them further about the modernisation plans and what they mean.”

The Royal Mail, which saw interim profits dive 86 per cent, last week prompted a backlash after it said it was losing money delivering letters and called for a rise in stamp prices. It argued it was being hindered by its obligation to deliver mail throughout the UK at the same price – something no other postal operator has to do.

But the regulator Postcomm said the group was using its regulatory obligations as a “smokescreen”, adding: “Royal Mail has failed to bring its costs into line as would be expected of an efficient mail operator.”