Post Office loses 62,000 days and 1m items of mail a week

POST OFFICE bosses yesterday admitted that the past year has been one
of the most disastrous on record for the service, with more than 62,000
working days lost because of wildcat strikes. Unofficial industrial action and disruption to the rail network in
the wake of the Hatfield disaster meant that the Post Office missed a profit
target imposed by the Government by Pounds 88 million. With competition in mail services being opened up in the next year,
executives at the Post Office also gave warning that jobs would be lost unless
industrial relations improved. John Roberts, chief executive of Consignia, the Post Office holding
company, said that the organisation urgently needed to resolve its industrial
relations problems. An independent review of relations between managers and
workers, being conducted by Lord Sawyer, a former general secretary of the
Labour Party, is to be published next month. "We've encouraged him to produce a hard-hitting report because we
don't want another year like we've just had," said Mr Roberts, adding that
Consignia was prepared to do whatever it took to get relations on a firmer
footing. Derek Hodgson, general secretary of the Communication Workers Union,
has committed it to undertake whatever is necessary, but there is some doubt
whether his successor, Billy Hayes, a leftwinger, will be as conciliatory. Mr
Roberts said: "This is self-inflicted damage at the time the regulator is
imposing competition. We are no longer a protected monopoly. At the end of the
day this will affect jobs." Consignia's figures on working days lost because of industrial action
do not include the spate of nationwide strikes in May, which also debilitated
the service. Recent figures from Postwatch, the consumer watchdog for postal
services, said that 967,500 items of mail are going missing each week. The Post Office reported annual pre-tax profits of Pounds 66 million,
compared with losses of Pounds 330 million last time. However, the annual
report revealed that the group's costs are rising faster than its turnover. Consignia, which will have to compete with private mail operators in
the next two years, actually made an operating loss of Pounds 3 million. It
only managed to return a profit by relying on the interest on Pounds 1.5
billion reserves. The Government has told the Post Office that this source of
income is likely to be removed in return for the Post Office receiving greater
commercial freedom. Consignia blamed the shortfall on slower than anticipated growth in
mail volumes, as well as increasing costs associated with disruption of the
transport network. The group also paid Pounds 100 million in a deal with unions to
introduce higher basic pay in return for reduced overtime and greater
flexibility. However, industrial action prevented Consignia seeing any of the
productivity gains that it had expected, causing disruption to revenues and
service shortfalls. Last year UK mail volumes grew 2.7 per cent, against a forecast of
3.4 per cent. Competition from e-mail, telephones and text messaging continues
to make it difficult to predict by how much postal volumes will grow, said Mr
Roberts. Peter Carr, chairman of Postwatch, said that the results raised
doubts about management's ability to reverse its deteriorating service record. The annual report also revealed that 547 post offices closed last
year, many in rural areas. (c) Times Newspapers Ltd, 2001THE TIMES, 27th June 2001