Royal Mail bosses hit out at Mandelson

Royal Mail management in the UK has hit out at criticism from Lord Mandelson that the organisation has failed to modernise, arguing that the business secretary is simply trying to deflect criticism for postponing plans for a partial privatisation, reports This Is Money.

Royal Mail management in the UK has hit out at criticism from Lord Mandelson that the organisation has failed to modernise, arguing that the business secretary is simply trying to deflect criticism for postponing plans for a partial privatisation, reports This Is Money.

The article continues:

It believes his attack on Royal Mail’s industrial relations record is outdated and an attempt to blame problems on management.

It says that over the past 24 months, about £800m of the £1.2bn it has borrowed from the government has been spent on new sorting machines.

Though strikes are planned in London, Royal Mail says industrial relations nationwide have improved dramatically.

Mandelson’s failure to go ahead with the part-privatisation bill has alarmed Royal Mail because it means that by next year it will have to pick up the burden of a pension fund with a near £10bn deficit.

Without government help it could go bust if it has to increase substantially its pension payments, which run at £800m a year.

The company has also shrunk rapidly over the past eight years, losing 55,000 to leave a workforce of 175,000. Over the next few years there will be more job losses as new machines replace sorting staff.

A Royal Mail spokesman said: “Royal Mail has strongly improved its performance in recent years, moving from a loss of £1m every day to doubling its profits in 2008-09 to £321m.

“Our priority is to continue the modernisation of Royal Mail to secure a future for the company and to protect the Universal Service. The company is on track to deliver this.”