Tag: Royal Mail

Concerns with the UK Government's post office closure proposals

Posted by | Feb 8, 2007 | |

The influential Counters Advisory Group, chaired by Elizabeth Hodder of Postwatch, has today written to Postal Services Minister Jim Fitzpatrick setting out its concerns with the Government’s proposals for the closure of 2,500 post offices. The Minister attended the group’s meetings in December and January.

The group wants, among other things:
• All local factors which affect a community to be taken into account when deciding the future of individual post offices.
• The timetable for the restructuring programme to be flexible enough to secure the right outcome for customers.
• Local consultations to take place over 12 weeks and not 6 as wanted by the Government.
• Outreach solutions (like mobile post offices) to be in place before the post offices they replace close.

In support of these points, Elizabeth Hodder said:
“The Government’s proposals unnecessarily restrict the factors to be taken into account to distance and topography. The majority of the group want issues like the availability of public transport, walking distance to the nearest post office (not just as the crow flies measurements), the effect on the local economy and relevant socioeconomic factors such as age, health and deprivation to be assessed.

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Royal Mail shuts UK pension plan as deficit hits GBP 6.6bn

Posted by | Feb 8, 2007 | |

Royal Mail is heading for a run-in with unions today after unveiling controversial plans to shut its final salary pension scheme to new members.
The group, which operates the sixth-largest pension scheme in the UK with some 450,000 members, said the cost of servicing its retirement obligations had ballooned by GBP280 million to GBP730 million during its 2006-07 financial year. This had sent first-half interim profits tumbling to just GBP22 million, compared with GBP159 million the previous year, it said.
At the last count the deficit in Royal Mail’s fund was GBP6.6 billion, ranking it high on the list of the country’s most struggling schemes.
Royal Mail becomes the latest in a growing line of British businesses to exclude new staff from schemes that ensure a retirement payout based on a percentage of a member’s final salary – opting instead for riskier “money purchase” schemes.
Royal Mail said the high cost of funding the scheme as it stood was unsustainable, particularly when set against its efforts to make its business operate competitively.

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Royal Mail unveils UK financial re-organisation and investment plan

Posted by | Feb 8, 2007 | |

Royal Mail is today unveiling an ambitious investment plan to strengthen the group’s finances, improve competitiveness and reward its workforce.

The five-year programme, agreed by the Government, will re-position Royal Mail to compete more effectively with commercial rivals and address major funding challenges for the company.

Highlights of the programme include:

• Government agreement for a GBP1.2bn debt facility, on commercial terms, to modernise Royal Mail operations
• Restructuring of the Post Office network, already approved by Government
• GBP1bn investment in an escrow account to give security to the pension fund trustees, including GBP850m from company reserves and a further payment of GBP150m by Royal Mail
• Royal Mail agreement in principle with the pension fund trustees to fund the pension deficit, currently standing at GBP6.6bn, over 17 years
• Consultation on how best to safeguard an affordable final salary pension scheme for existing employees
• Consultation on replacing the final salary scheme for newly recruited employees with a defined contributions scheme
• Inaugural “phantom” share scheme to reward Royal Mail’s 190,000 employees, worth up to GBP5,300 per employee over five years – equivalent to a GBP1bn dividend distribution.

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Royal Mail boss ready to take charge at Sainsbury's

Posted by | Feb 8, 2007 | |

Allan Leighton, chairman of the Royal Mail and former Asda boss, is ready to take control of supermarket chain Sainsbury in the event of a takeover bid.
It is understood that Mr Leighton, who worked alongside Archie Norman to revitalise Asda during the 1990s – has been approached by the private equity consortium working on bid plans and has told them he is keen to work with them.

His final decision is believed to hinge on what potential bid price they arrive at. He is unwilling to get involved if the price required to buy Sainsbury’s is more than 550p, as it would starve the supermarket chain of the investment funds he believes are necessary.

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UK Mail awarded major contract with BBC

Posted by | Feb 6, 2007 | |

Business Post Group plc announces that its mail company UK Mail, a competitor to Royal Mail in downstream access postal services, has been awarded a contract to provide downstream access postal services for TV Licensing. This marks a major achievement for UK Mail and follows in the footsteps of the prestigious mail contract won with HM Government Department for Work and Pensions (DWP).

This new contract is due to commence on 1 April 2007 and is worth up to GBP 8.1 million per year.

UK Mail beat off formidable competition from three rival postal providers in the final stages of the tender process in 2006. The business’s provision of significant cost and service benefits coupled with its various pricing and product innovations were all critical factors in the final decision. The BBC began trading with UK Mail on a trial basis in October last year whilst negotiating the final details of the contract. During this period substantial cost savings were identified alongside an improved flow of calls to its call centre.

All presorted mail from TV Licensing will now be dispatched via UK Mail’s downstream access model whereby mail is collected and sorted at its national network of 58 sites into Royal Mail’s 69 Inward Mail Centres on a daily basis.

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