Former Asda chief likely to lead Consignia

Allan Leighton, the former chief executive of Asda, is expected today to be named interim chairman of Consignia – formerly the Post Office – with a mandate to streamline its urban network and fight increasing competition in mail delivery.

The Department of Trade and Industry has persuaded Mr Leighton, already a member of Consignia’s board, to become executive chairman for three to four months while it seeks a permanent successor to Neville Bain, whose contract expired at the end of last year.

The former supermarket chief – who also chairs Wilson Connolly, the housebuilder, and Lastminute.com, the internet retailer – will help shape Consignia’s strategy and its links with government and regulators.

The DTI and Consignia declined to comment on the part-time appointment.

It is understood that Mr Leighton’s first big challenge will be managing the contraction of Consignia’s urban post office network.

Officials at Consignia yesterday denied reports that up to half of Britain’s 17,500 post offices could be closed as part of a strategic review. But they confirmed that the 8,000-strong chain of post offices in towns and cities would contract in coming years. The number of closures will depend on the take-up of a compensation package for sub-postmasters, which was announced by the DTI this month.

“We are talking to sub-postmasters about how many might leave, but we cannot say what size the optimum network might be,” said one senior official.

Consignia also insisted that no rural post offices, defined as serving communities of fewer than 10,000 people, would be affected by the closure programme.

The reduction in urban post offices coincides with a government plan to switch payment of benefits and pensions directly to claimants’ bank accounts rather than at post offices.

Mr Leighton, whose other non-executive roles include chairmanship of BHS, the high street chain, is thought to have encouraged Consignia’s drive into services such as bureau de change to compensate for the loss of benefit-payment business.

One of his other roles will be to support John Roberts, Consignia chief executive, as the group prepares for increased competition in mail deliveries.

Postcomm, the industry regulator, is finalising a report about opening up delivery of letters and parcels to more providers.

The report will be published this month, but will not discuss the size or shape of the post office branch network.

Nevertheless, the report will challenge Consignia’s monopoly on universal fixed-priced deliveries and could have an indirect impact on over-the-counter services, particularly for parcels.