Concern at increase in UK Postwatch spending

ROYAL MAIL is understood to be concerned at the rising expenditure at Postwatch, the consumer group. Accounts for Postwatch in the last financial year showed that Pounds 4 million was spent on staff costs; Pounds 1.7 million on council and secretarial expenses; Pounds 430,000 on networking, travel and subsistence; and Pounds 564,000 on office costs.

Staff costs have risen from Pounds 2.7 million and the cost of “other administration” has jumped from Pounds 5.5 million to Pounds 6.2 million.

Postwatch has also taken out leases of Pounds 1.65 million to cover the cost of IT and property, and has a deficit of Pounds 261,000.

Royal Mail provides more than Pounds 10 million funding a year to Postwatch, but relations between the two have become acrimonious. Last month lawyers exchanged sharp words after Postwatch advised consumers to use 2nd-class stamps for Christmas post because 1st-class was not reliable enough.

It is thought that Allan Leighton, chairman of Royal Mail, was angered by the reappointment of Peter Carr, Postwatch’s chairman.

Mr Leighton believes that, under Mr Carr’s leadership, Postwatch has been unduly critical of Royal Mail.

Royal Mail funds Postwatch and the regulator Postcomm via payments to the Department of Trade and Industry, which administers the grants while the National Audit Office checks the accounts.

A spokeswoman for the DTI said that the department would take a close look at Postwatch’s next three-year spending plan, which must be submitted this year. She said that the organisation needed to be properly resourced and that Postwatch’s budget was a matter for its own management.

Gregor McGregor, Postwatch’s chief executive, said in the foreword to the accounts that some internal control procedures were not being adhered to and that action would be taken to correct these.

He rejected criticism of the organisation’s spending, saying that Postwatch’s workload had increased because complaints against Royal Mail had doubled over the past few years.

“We have had to take on additional staff in our new call centre in Belfast because of the sheer volume of calls. There are over 100,000 contacts a year and complaints have gone from 15,000 when we began to 30,000 now,” he said.

Mr McGregor said the spending on networking, travel and subsistence included a number of visits during Royal Mail’s closure of sub-post offices.

Royal Mail declined to comment on Postwatch’s accounts. Dave Ward, deputy general secretary of the Communication Workers Union, said: “Funding is crucial to the legitimacy of any public body which claims to be independent and what we need more than anything at the moment is a strong consumer watchdog championing the very pertinent quality of service issues that the mail sending public is worried about.

“Postwatch in its current form simply isn’t effectively doing that.”