Royal Mail fails to address database issue

The soap opera plotline concerning the "ownership" of postal addresses has taken another twist. According to leaked letters seen by the Guardian, the latest set of negotiations between government-owned agencies over payment for address data has broken down.
The saga provides a graphic example of an issue at the heart of Technology Guardian's Free Our Data campaign – the bureaucracy and waste that ensue when state bodies treat vital data as an asset that must be made directly profitable.

The lifecycle of 23 Acacia Avenue – and every other postal address – begins with the local council, which is responsible for assigning a street name and number to new properties. Other government-owned agencies then draw on this information for their own purposes, including the creation of proprietary databases of addresses. If councils later want to use such databases, they must pay for the right – even if they provided the original data.

Arguments over the rights of one arm of the state to use another arm's address database have soaked up much government time and money over the past five years. The current row is over a database of postcodes, the Postcode Address File, run by Royal Mail.

This is profitable, making GBP 1.58m on revenues of GBP 18.36m in 2005-06 (Royal Mail's postcode database reveals its profitable side, April 26). Councils in England and Wales spend about GBP 2.5m a year on postcodes (paid to Ordnance Survey and commercial businesses, as well as Royal Mail).

After protests last year over price rises, Royal Mail said that it would consider "reasonable remuneration" to local authorities supplying data on new addresses. But negotiations on the terms have foundered over intellectual property rights.

A body representing councils in England and Wales, the Improvement and Development Agency, proposed to supply Royal Mail with a single feed of data from a centralised database, the National Land and Property Gazetteer. This receives data from almost every local authority in England and Wales (with the notable exception of Birmingham).

Royal Mail was apparently receptive to the idea – until it saw the proposed terms. A letter seen by the Guardian from Jennie Longden, head of Royal Mail's address management unit, describes the terms as "unworkable".

One example, according to the letter, is the requirement that the agency retain control over Royal Mail's use of data after incorporation into the postcode file. "This is not practical or possible," she wrote. "Royal Mail does not see the value at this stage in exploring any further the terms and conditions on which it intends to license such a dataset." Instead, Royal Mail would negotiate terms directly with local authorities.

This proposal appears to have alarmed the agency, which warned councils that, while a direct payment might be attractive in the short term, it would not ensure that local government gets a "fair and reasonable return" on its investment in gazetteers. Steven Brandwood, the agency's head of geographical information, said this week that it is not trying to stop councils doing deals with Royal Mail, but setting out the arguments.

He denied that the proposed terms were unusual or onerous: "We were always prepared to be flexible." Providing data through a single "hub", he said, would be cheaper for Royal Mail. "Local government provides this information of value, so local government should get some revenue stream from it."

It would be a "complete nonsense" for Royal Mail to negotiate individually with hundreds of local authorities, Brandwood said. Nonetheless, this appears to be its intention. In her letter Longden says: "Royal Mail would like to commence paying the local authorities for this data as soon as possible." Royal Mail assured the Guardian last month that it was "confident of a successful outcome". This week it said it was "finalising proposals for a framework contract to offer all councils".

This ludicrous position is a result of conflicting responsibilities placed on state-owned bodies. As a commercial (albeit state-owned) enterprise, Royal Mail has to make its assets pay, and that includes a national resource such as postcodes. Local authorities are being squeezed by council-tax caps and efficiency targets; selling data is thus a rare new source of income. The agency, meanwhile, wants to ensure the future of the National Land and Property Gazetteer, which it sees as a vital tool for modernisation. Its commercial contractor, Intelligent Addressing, is embroiled in a separate dispute with Ordnance Survey over addressing data.

The Free Our Data campaign proposes that all public bodies to free up their address databases, funded from central taxation. We're not alone. A petition at petitions.pm.gov.uk urging the prime minister "to end the address dispute between local government, Royal Mail and Ordnance Survey" has 370 signatures.