Glimmer of hope from the bottom of the postbag

You have to hand it to Allan Leighton: in January, before he became chairman of Consignia, the organisation’s future looked as bright as the bottom of a postman’s sack. Four months on and he has given it a distinct glimmer of hope – although the restructuring plan he unveiled yesterday is inevitably high risk.

He took over a business haemorrhaging cash, its management discredited, its workers bellicose and the new postal regulator about to throw open the doors to competition.

None of those problems has gone away, but Mr Leighton has won breathing space to put in place a restructuring that just might work: he has convinced the government to hand back Pounds 1.8bn of accumulated profits, which will go a long way to help with a redundancy programme; the regulator has deferred by a year its plan to introduce phased competition; and, at least for now, the traditionally strike-prone Communications Workers Union is not making especially aggressive noises about the loss of 30,000 jobs.

So far Mr Leighton has been the right man in the right place at the right time: already a non-executive director of Consignia, with knowledge of the organisation; a businessman with a strong track record in the private sector, as chief executive of Asda, and thus clout with ministers; and a man who was famed at Asda for his egalitarian touch.

Several of his actions yesterday should have helped this better mood music – at least among the rank and file, if not the demoralised ranks of management: the scrapping of the wretched Consignia name; the placing of a lot of the blame for the Post Office’s problems on its past management, and an emphasis on the need for a motivated workforce; and the retirement of John Roberts, the chief executive.

But implementation of the ambitious plan, sensible in itself, could still go horribly wrong. The union, unhappy at the details, might yet strike. The timetable could slip and competition be unleashed before the company is ready for it. And the government will be in no mood to dole out more cash.

Nor will Mr Leighton necessarily be driving through the changes. Much will fall to the new chief executive, yet to be appointed. He or she needs to be a first class act of the kind that has not graced Consignia’s executive ranks till now.

If it works, the logical final act should be privatisation, at least of the Royal Mail side of the business. But that is hardly a line Mr Leighton will be breathing in the delicate talks with unions that lie ahead.