Royal Mail angry over watchdog's bill

Royal Mail is believed to be furious at the explosion of costs at Postwatch, the consumer watchdog that it is forced to fund.

It paid £7m last year for the organisation, which in turn spent over £350,000 on furniture, £600,000 on computer equipment and a staggering £462,000 on entertaining, subsistence and travel. Its predecessor, the Post Office User’s National Council (POUNC), spent under £800,000 in a year.

Postwatch has recently increased its office space in plush Grosvenor Gardens, near Buckingham Palace, to five floors from three. It has 62 permanent employees in the office and seven further regional offices.

POUNC, on the other hand, had an office in Hercules House, Lambeth North – a much cheaper part of London. Postcomm, the postal regulator, has an office there, while Royal Mail is based in unsalubrious Old Street.

Asked about the furniture, a Postwatch spokesman said it was “nothing special. You can come and have a look if you like.”

Grosvenor Gardens is a listed building, and the company was forced by English Heritage to restore a Georgian screen that it found while it was decorating. The spokesman denied the organisation had replaced the furniture again when it increased its office space.

He said Postwatch needed furniture as it was starting from scratch, and the entertainment, subsistence and travel budget was high because it needed to pay the many regional representatives to attend meetings. Unlike POUNC, Postwatch has a large regional presence, and a decision was taken to ratchet costs up accordingly.

“POUNC wasn’t working in the form it was in,” he said. Postwatch deals with complaints from Royal Mail’s customers.

Together with mail regulator Postcomm, Postwatch is funded by licence income from mail services. Royal Mail last year paid £7m for Postwatch and £5m for Postcomm to the DTI, which then funded the bodies.