Range of stakeholders should own UK's Post Office, says key report
The UK’s Post Office network should not be owned exclusively by its workforce, but by a range of stakeholders including staff, customers and the community. That was the recommendation from a key report issued today by Co-operatives UK, which has been looking into the issue on behalf of the UK government.
Under new legislation currently passing through Parliament, Post Office Ltd is set to be split from the Royal Mail Group. While Royal Mail looks likely to be privatised in some form, the Post Office network is to be kept out of private hands.
But the Postal Services Bill, which could gain the Queen’s sigature by the summer recess, does allow Post Office Ltd to become a mutualised organisation.
The advisors have now come back with their full recommendations on the matter, stating that giving ownership of Post Office Ltd to the workforce only would not provide sufficient long-term protection for the public benefit in post office operations.
However, Post Office employees should be part of the picture, said Co-operatives UK, along with other stakeholders including staff, sub-postmasters, large operators, customers and the community.
“This ownership could be held through direct membership, representative membership or some sort of trust arrangement,” said today’s report.
Wholly owned by the government at present, Post Office Ltd operates retail mail, financial, governmental and telephone services through about 11,500 branches across the UK. Most of these branches are independently-owned, run by partner operators. Some 373 branches are Post Office-owned, called Crown Offices, while about 1,000 branches are already run by mutual organisations.
The network receives a government subsidy of around GBP 150m a year, and is also subject to a GBP 1.34bn modernisation programme funded by the government.
Co-operatives UK said the most appropriate structure for a fully mutual Post Office would to have a three-tier leadership of members, a representative body and a board of directors.
Members, or owners, of Post Office Mutual would include customers, community representatives, staff and operators. The representative body would contribute to the future planning of services and monitoring of performance, and would comprise a majority of elected representatives and a minority of appointed experts.
The day-to-day operation of Post Office Mutual would be run by the board of executive and non-executive directors, the Co-operatives report suggested.
“Careful design”
Ed Mayo, Co-operatives UK’s secretary general, said the mutual Post Office would need “careful design”.
He said: “Co-operative businesses, for example, are thriving at present, but in itself being a mutual is not enough. You need to find ways to use the model, with its dispersed ownership, ethical values and opportunities for commitment and loyalty, to create commercial and social advantage.”
Government ministers, who believe the Post Office network is being “held back” by its current structure, said a mutual structure would only work if the key parties make it happen, rather than having a system imposed by the government.
Tensions can creep into the operation of the network, for example when independent postmasters have to negotiate annual pay rates, it said, and the fear by branch operators that the Post Office will drive customers away from their stores by expanding online.
Ed Davey, the postal affairs minister, said today that he’d like to see a mutualised Post Office following along similar lines to the retailer John Lewis Group and financial services group Co-operative Group.
“A radical shakeup to combine elements of John Lewis and Co-operative Group’s ownership arrangements would give those who know the Post Office best – subpostmasters, franchise partners, staff and the communities they serve – a real say in how the Post Office is run,” he said, before adding that the government would “carefully consider” the Co-operatives UK report before launching a public consultation on the matter.
