Consignia plans pounds 1bn `privatisation'
Consignia, formerly known as the Post Office, is to restructure its
internal operations radically by allowing private companies to manage
operations worth about pounds 1bn a year. The move is likely to incite postal strikes across the country when
workers object to what they see as “back-door” privatisation. Separately,
pounds 1bn of Consignia’s revenues are under threat as the Government reduces
its bill for postal services. In an attempt to cut costs, key parts of Consignia’s business services
division, such as personnel and cleaning, are to be outsourced to private
bidders. Consignia, chaired by former Coats Viyella boss Neville Bain, is
looking for private companies to manage its facilities, public relations,
marketing and occupa-tional health services. Last week it announced it is to
outsource its vans and cars. The giant also wants to outsource its accounting,
personnel and IT divisions. It is also considering allowing Siemens, the
German group, to manage its post-sorting and delivery operations. Overall, Consignia wants to reduce the costs of non-core operations.
It spends approximately pounds 1bn on the services earmarked for
privatisation. “Consignia faces increasing competition in its market,” said Gerry
Smith, the managing director of the business services division. “Over all
divisions, revenue is likely to go down, so we want to be more efficient.” He said the private companies would bring more skills and different
types of expertise as well as reducing costs. Consignia intends to set up
joint ventures to manage its business services division, but if partners
cannot be found the operations will be sold. Mr Smith admitted there could be “small” job losses in administration
departments but he said there would be no cuts in the operational areas of the
division. He added that there could be benefits to employees in moving to a
private company. “If we pick the right partner [the staff will] transfer into
a company with expertise in the field, which is not necessarily going to be
the case in Consignia,” he said. Caption: Private agenda: Neville Bain Copyright: Independent Newspapers(UK) Limited INDEPENDENT ON SUNDAY, 09th September 2001
