Royal Mail accused of delaying investment in post offices
Royal Mail has come under fire for delaying investment in its urban post office network and leaving government money “lying idle” by spending only Pounds 13m of Pounds 30m allocated for the work.
The criticism by Postwatch, the consumer group, coincided with the start of talks between the publicly owned postal operator and unions over further job losses.
Royal Mail is lobbying the government to allow it to change its ownership and balance sheet structure, arguing that it needs billions of pounds of investment to compete effectively when the postal services market is opened to full competition next year.
Royal Mail is also locked in a fierce dispute with Postcomm, its regulator, over future price controls. Any suggestion Royal Mail has failed to spend money already at its disposal could strengthen Postcomm’s argument that Royal Mail is overstating the prices it needs to charge customers to generate a decent financial return.
Peter Carr, Postwatch chairman, said the Post Office, part of the Royal Mail group, had been “quick to close post offices but slow at investing in those that remain”.
The group said work was incomplete in 72 per cent of the post offices where improvements had been promised. It called on the Department of Trade and Industry to set a schedule for completing the work.
Royal Mail rejected the criticism, saying it was “confused” by Postwatch’s figures. Improvement work was being carried out in 2,743 branches and a further 2,500 were lined up for investment, the group said. The DTI backed Royal Mail by arguing the money already spent had been “put to good use”, adding it was monitoring the ongoing work.
The spat came at the start of negotiations between Royal Mail and the Communications Workers’ Union over jobs at the group’s cash-handling division. The amount of work handled by the division has contracted recently, in part due to the government’s decision to pay many benefits direct to claimants’ bank accounts. The two sides met yesterday for initial talks on cuts at the division, which employs 2,000 people. Substantive negotiations are expected to start tomorrow.
The CWU has used this week’s Labour party conference to highlight its opposition to Royal Mail’s proposal to give a significant equity stake to staff. Ministers are privately sympathetic to the plan, saying it would not break Labour’s manifesto commitment not to privatise the group. The government is also understood to be considering ways to remove Royal Mail’s historic pension liabilities from its balance sheet to ensure the group remains solvent.
A government-commissioned review of Royal Mail’s future by Sir George Bain is not expected to be completed before the end of the year.
