Tag: Royal Mail

UK Post Office's GBP 150m subsidy 'in jeopardy'

Posted by | Jun 11, 2008 | |

The government’s financial support for post offices may be jeopardised if the network fails to win a tender to run the card account through which millions are paid benefits, MPs were warned yesterday.

Brussels has approved a government subsidy of GBP 150m a year to enable Royal Mail to run a network of 11,500 post offices by keeping loss-making branches open. But Post Office Ltd’s managing director, Alan Cook, said winning the card account was crucial in meeting state aid rules.

The government has put the card account out to tender from 2011 and Cook said: “The grounds of approval (from Brussels) are on the back of having the card account.”

The loss of other government work and a decline in the number of people using the card account had posed problems for the network, Cook told the all-party business and enterprise committee. If it lost the tender, the reduction in the level of services it would be providing would make it hard for the government to secure renewal of the social network payment, he said.

Post Office Ltd is closing 2,500 branches as part of its plans to curb heavy losses made by the network. Government funding will enable it to retain 11,500.

Cook told the committee the company would oppose any plans to shrink the network further but added that Post Office Ltd had to work within the limits of the funding provided by the government.

He revealed 100 local authorities had expressed interest in an initiative being pioneered by Essex County Council to take on post offices being closed under the network change programme.

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Spain is eurozone bargain for motoring holidays in Europe

Posted by | Jun 11, 2008 | |

Spain emerges as the best value destination for UK holidaymakers in Europe in a new report by Post Office® Travel Services – despite the fact that pump prices in Switzerland have made it cheapest for unleaded petrol for the second year running.¹

In its’ Motoring on the Continent report, the Post Office® reveals that Switzerland is now the only major motoring holiday destination where unleaded fuel costs less than GBP 1 per litre.

However, the report places Spain as best value across Europe for both diesel fuel and motoring in a hire car. At GBP 1 per litre, it is also cheapest in the eurozone for unleaded petrol. Prices are around 30 per cent lower than in either Belgium or the Netherlands, which are popular motoring holiday choices for UK tourists.

The cost of unleaded petrol rose substantially in all 12 countries surveyed over the past 12 months. Increases ranged from 20 per cent in Italy and the UK to 32 per cent in France. But, although these figures make the much-debated rise in UK petrol prices look comparatively modest, the falling value of sterling masks the true position in Europe.

Post Office® head of travel Helen Warburton said: “Sterling has fallen in value by 14 per cent against the euro in the past year – and by even more in the other motoring holiday destinations. When we extracted this percentage from the price rises, we found that the UK had suffered the highest underlying price hike – 20 per cent at the pumps.

The report paints a very different picture for UK holidaymakers travelling to Europe in a diesel car. Spain is the cheapest destination by a wide margin. At 94p for a litre of diesel it is seven per cent cheaper than its nearest rival Austria (GBP 1.01) but 26 per cent lower than the UK, where diesel prices are some of Europe’s most expensive.

The differential between unleaded petrol and diesel was most marked in the UK and Sweden, with diesel costing 13p and 16p per litre more respectively. However the Post Office® found that diesel costs significantly less than unleaded fuel in four countries – the Netherlands, Belgium, Germany and Spain.

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Royal Mail seeks to axe senior marketing roles (UK)

Posted by | Jun 11, 2008 | |

Royal Mail is understood to be asking senior marketers to re-apply for their jobs as part of major review of its marketing team.

It is believed that the postal operator is reassessing its structure and is looking at senior roles, which will include brand marketing director Tom Hings and senior campaigns development manager Andrew Hammond.

One source says: “It is just the marketing department as far as I know, but it may include other areas aligned to that function, such as market research.”

While it is believed the review is starting at the top, many say it is likely to progress down to middle management.

Another source says it would be logical to conclude that any changes will be aimed at cutting costs and improving efficiencies as part of an attempt to streamline the organisation.

“There is nothing to say at this stage,” according to a Royal Mail spokesman, who refused to comment further.

The development comes just after Royal Mail reported an operating loss of GBP 279m for last year. It continues to battle with a negative perception of the brand over its poor delivery record.

The review is just weeks after marketing director Alex Batchelor announced he is leaving the postal
operator.

It also follows the promotion of Alex Smith from Group Strategy Director to Strategy and Commercial Director in March this year.

Industry experts say that the restructure effectively sidelined Batchelor who then had to report to Smith.

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The McCue Interview: Robin Dargue, Group CIO, Royal Mail

Posted by | Jun 11, 2008 | |

Robin Dargue has long been known as something of a high-flyer in CIO circles – and that’s not just about his hobby of flying planes (more of which later). After hitting the heady heights of CIO for drinks giant Diageo aged just 36, he has now taken on what most people would view as a daunting challenge at Royal Mail.

What attracted Dargue to the job? A GBP 2bn technology-based business transformation programme aimed at making the organisation leaner and able to compete better in the de-regulated postal market – essentially it’s about saving a somewhat unwieldy 360-year-old organisation against new competition.

Dargue says: “This is one of the largest transformations in the UK, if not Europe – a business transformation. It is in everybody’s interests that we do transform Royal Mail. Royal Mail Group is 360 years old and I think we have a duty to improve the business and get it in a great state to pass on to future generations and the concept that there wouldn’t be a Royal Mail Group I don’t think is acceptable.”

Dargue, just voted top CIO in the UK, has been in the CIO post six months and replaces the now retired David Burden – who has gone off to travel the world – but the structure of the role has changed slightly. Essentially Dargue has two CIO hats.

Firstly he is group CIO for the Royal Mail Group – which includes General Logistics Systems, Parcelforce, Post Office Ltd and Royal Mail Letters. With that hat he sits on the Royal Mail Group executive committee and the individual CIOs of the group businesses report into him.

Then, with his other hat he is also CIO for Royal Mail Letters – the biggest company in the group, accounting for around GBP 7bn of Royal Mail’s overall GBP 9bn revenue. As CIO of Royal Mail Letters he also sits on that individual business’ executive committee.

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Union call to sack Royal Mail Chief (UK)

Posted by | Jun 11, 2008 | |

A union leader has called for Royal Mail Chief Executive Adam Crozier to be removed from office as part of a “new vision” to secure the future of the business.

Dave Ward, Deputy General Secretary of the Communication Workers Union attacked Mr Crozier, and Royal Mail Chairman Allan Leighton for “managing decline” in the face of competition.

Mr Ward told his union’s annual conference in Liverpool that the leadership of the Royal Mail, and the management’s business plan were both in “crisis.”

He went on: “One week the company is in crisis, then they announce there has been a fundamental turnaround, then they are in crisis again.”

Mr Ward attacked the GBP 3 million salary paid to Mr Crozier as “obscene”, adding: “It is unacceptable and he has to go. The business needs a new vision to succeed.

“Royal Mail is doing the Oliver Twist thing by asking the Government for more money to pay for pensions and to transform the business.

“They want between GBP 8 billion and GBP 9 billion from the Government, which they know will not be given, so they will come out and say the only solution is privatisation.

“They are managing decline, and their business plan will not succeed, but we have these people on the run and I am convinced that if we carry on being united we will get rid of them and come up with solutions to secure our members’ future.”

The threat of industrial action over pensions is expected to increase when delegates discuss holding a ballot over the “unacceptable imposition” of pension reforms.

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