DTi accused of delaying Consignia cuts
MINISTERS have deliberately delayed the implementation of thousands of redundancies at the Post Office, fearing a backlash over the Government’s handling of the organisation’s restructuring.
It is also thought that the Government has been trying to reduce some of the impact of the massive restructuring after Allan Leighton, the acting chairman, outlined the need for far tougher cuts than the 30,000 job cuts that have already been tipped.
Senior sources at Consignia, the troubled postal group, have told some parties affected by the restructuring that they have been ready to detail large cuts for several weeks but that the Department of Trade and Industry has held up the announcement because of concern about the way it will be received.
The intervention will increase criticism over the Government’s apparent preoccupation with news management and raise doubts that Consignia will ever be allowed to operate as an independent organisation.
One Consignia insider said: “If it wasn’t for the DTI a statement could have been made more than a month ago. We outlined these cuts in October, it is obvious that we have done a lot of work on this. But we keep being told not now, there is always some good reason why it shouldn’t happen.”
The postal group, which is losing Pounds 1.5 million a day, fears that the longer the delay, the worse its competitive position is becoming. The source said: “We can understand the concern but that doesn’t change the financial reality. We need to make the savings now.”
A spokesman for the DTI said: “Allan Leighton has already said he will make an announcement in the coming weeks. These are matters for Consignia.” However, the level of the Government’s involvement in Consignia’s affairs is believed to be so detailed that press releases have been monitored and altered.
Concern is growing that another key part of the postal network’s future is being delayed by the Government. This is “the reinvention of the sub-post office network” -a rationalisation involving thousands of closures with sub-postmasters offered a compensation package of Pounds 180 million. The DTI wants to term the closures “mergers” although they will involve thousands of people going out of business rather than merging resources with other post offices.
The delay is frustrating Colin Baker, general secretary of the Federation of Sub-postmasters. He said that he had expected a clear indication of the new network by last September. “We need to know what is happening. Where is the network reinvention, where is the universal bank? Sub-postmasters have been in the dark for nearly two years.”
The sub-post offices -which are small and often family-owned franchised businesses -are facing a sharp drop in sales because of plans to switch benefits payments to automated credit transfer in a two-year phase starting next year.
Nigel Waterstone, Conservative spokesman on postal services, said: “If the DTI is delaying the announcement then it is micromanaging Consignia and ministers are intervening yet again when they have said Consignia is independent.”
Separately, hopes are rising that the pay dispute with the Communication Workers Union will soon be resolved. John Keggie, deputy general secretary of the CWU, is expected to put a two-year pay deal worth just under 7 per cent to union leaders next week.
