SECOND CLASS' POST OFFICE FACES CRISIS

MILLIONS of letters are still being delivered late and the cost of sending
mail is too expensive.

That is the damning verdict of a new report on the Post Office. A radical
overhaul is recommended.

The Centre for Policy Studies warns that unless the service is improved
thousands of “unsustainable” branches will close.

Stuart Lyons, a former Government adviser who produced the report, blames a
“cumbersome” management structure which last year had to deal with
repeated industrial action.

Unless the Post Office is privatised quickly, he says, it will not survive
in the face of more efficient foreign competitors such as Deutsche Post,
which already controls a quarter of Europe’s parcel industry. And the level of
Post Office counter trade will hit “crisis” levels once the Government removes
its £300million a year social security business in 2003.

The report indicates that Tony Blair’s vision of a Universal Bank for the
poor which would use the branch network is under severe threat.

The Post Office will run into further controversy next Monday when it
officially changes its name to Consignia.

Campaigners and unions are still angry about the “unnecessary” name change
which is part of a £2million makeover to improve its image.

Even Post Office chief executive John Roberts, whose pay last year was
£239,000, admitted the new name is “not meant to mean anything”.

However the Royal Mail and Parcelforce brands will remain as will existing
shop fronts and postal uniforms.

Mr Lyons, who has also served on the Competition Commission, said: “The
Government has not performed well in its management of the Post Office.

“Targets for next-day delivery are consistently not being met, the cost of
posting letters and parcels does not provide value for money.

“Its acquisition strategies are unconvincing and management structure
cumbersome. The international industry perceives the Post Office as having
faltered and been overtaken by its more agile competitors in Holland and
Germany.”

Of the billions of first-class letters handled by Royal Mail last year,
only 91 per cent were delivered the next day.

However of the 13.4 billion second-class letters sent last year, nearly 99
per cent were delivered within three days.

Strikes by Post Office employees cost 22,199 working days last year,
accounting for half of the 195 industrial disputes recorded by the Government in 2000.

The Post Office group has altered in recent years as new technologies have
changed the face of communications.

It has invested £500million in overseas acquisitions and now owns nearly 20
international companies based in Europe and North America, some with links
to the Far East.
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THE EXPRESS, 19th March 2001