Consignia head set to pay price for crisis

By Cathy Newman and Sarah LaitnerPublished: May 2 2002 21:06 | Last Updated: May 2 2002 21:56
The financial crisis that has engulfed Consignia, formerly the Post Office, is about to claim the scalp of John Roberts, its chief executive. The government will shortly begin the hunt for a successor to 57-year-old Mr Roberts, who, one senior Whitehall insider said, had “reached the end of his natural life” at the state-owned postal group. Chief executive since 1995 and with the Post Office since 1967, he will leave once a replacement has been found. The company, once one of the world’s most efficient postal operators, is losing £1.5m ($2.2m) a day and has cut 15,000 jobs, with another 15,000 to go in a radical restructuring. Mr Roberts has been widely criticised for the way the redundancies were announced – without consulting the unions – and his decision to spend £500,000 changing the name to Consignia. He earns £205,000 a year on a twelve-month rolling contract, and would be expected to receive a compensation package of a year’s pay. Martin O’Neill, the Labour chairman of the trade and industry select committee, said last night: “I think there is a need for entrepreneurial leadership at the top of Consignia. John’s civil service-style approach is not what the new organisation will require.” Patricia Hewitt, trade and industry secretary, has made no secret of her frustration with Mr Roberts and some of his colleagues. Consignia is owned by the government but faces the end of its monopoly over postal services by 2006. It has warned that the cost of a first-class stamp will have to rise from 27p to 28p because of competition from foreign private sector operators. Under a restructuring plan drawn up by Allan Leighton, the former Asda chief executive hired by the government to shake up Consignia, 3,000 urban post offices will close. Labour backbenchers have expressed alarm at the closures, and the impact of job losses at Consignia. Marisa Cassoni, the group finance director and a former finance director at Britannic Assurance, is thought to be a leading candidate to succeed Mr Roberts. She is well liked by Mr Leighton. Consignia has repeatedly denied suggestions that he was about to leave. It said last week: “He has got an agenda, he has got a job, and he is getting on with it.” It repeated that denial on Thursday. The DTI declined to comment. Postal workers on Thursday called off a strike planned for May 8 after reaching a deal with Consignia that settled a pay dispute, writes Christopher Adams.The agreement, brokered by the conciliation service Acas, means members of the Communication Workers Union will receive a 2.2 per cent pay rise backdated to October 2001 and a further 2.3 per cent from this October. Acas ruled that the vexed issue of new delivery times should be resolved separately by negotiation. “This is a major victory for common sense,” said John Keggie, CWU deputy general secretar