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WHAT went wrong at Consignia? It doesn’t seem so long ago that the organisation was filling the Treasury’s coffers from its fat profits. Now it is losing pounds 1.5 million a day. Gregor McGregor, chief executive of postal consumer watchdog PostWatch, blames the management. “As a nationalised industry, the Post Office was very successful,” he says. “As a PLC it has turned a pounds 600 million profit into a pounds 600 million loss and its industrial relations are, frankly, appalling.” Apart from a few niche licence holders, Consignia still effectively has its monopoly on all items costing less than pounds 1 to post. It is unusual for a monopoly industry not to be able to turn in a profit. However, the organisation carries a huge burden of obligations and suffers from decades of under-investment.

Any hopes that the political fall-out from the 15,000 job cuts announced by Consignia would be limited to one embarrassing ministerial statement in the Commons were dashed yesterday when management threatened yet more redundancies if competition was introduced too quickly.
Appearing before the public accounts committee, John Roberts, Consignia’s chief executive, said that proposals to end the post office group’s monopoly within weeks would add another Pounds 750m to its mounting losses and necessitate a further 15,000 job cuts.
Officials later struggled to make clear whether this threat was in addition to the question mark hanging over another 25,000 staff which had earlier given rise to a suggested total of 40,000.