Royal Mail chief to quit

Oliver Morgan, industrial correspondent
Sunday July 8, 2001
The Observer

Royal Mail managing director Richard Dykes is resigning next month after two years of poor performance that have seen mail volumes drop and performance targets go unmet.
The Royal Mail’s state-owned parent company Consignia – formerly the Post Office – last month announced post-tax profits of £66m, £88m below targets set by the Government.

Chief executive John Roberts said at the time that unless there were improvements in service quality – plagued by more than 60,000 working days of industrial action last year – Royal Mail would be outstripped by competitors. Industry regulator Postcomm is currently consulting on ways to open up the Royal Mail’s monopoly on letters to competition.

Dykes’s resignation was confirmed last week by Consignia, which said he wants to start up an internet company, a decision he took a year ago.

However, Post Office insiders say that Dykes, 56, was given no choice but to leave by Roberts. He has been in his current job since 1996. One said: ‘They may be talking about new oportunities, but he is taking the flak for the bad results.’

He is to be replaced by Jerry Cope, Consignia’s head of strategy and business development.

The Royal Mail has had a disappointing year – volumes grew last year by 2.7%, compared with a target of 3.4%. In April the Royal Mail admitted that only 89% of first-class deliveries arrived on time last year, a fall from 91% the previous year and below the 92.1% target. In Consignia’s annual report, Roberts put the blame on industrial action and rail strikes.

Meanwhile it has emerged that high street banks are urging the industry regulator Postcomm to increase competition rapidly to help bring down the price of bulk mailing. Banks have 105m current accounts to service and are one of the most intensive users of mail services.

The high street banks are keen to enter contracts with distribution companies, such as Hays or TNT, that would offer rival delivery services to Consignia.