Tag: Royal Mail

Royal Mail is lobbying politicians on its cost-cutting plans to head off the prospect of a mass closure of rural post offices. Chief executive Adam Crozier has begun negotiations with government on the future of the GBP 150m-a-year subsidy which keeps the rural network afloat. He has warned that if the funding is stopped when the current package runs out in 2008 he will be forced to close 80% of the UK’s 8,000 rural post offices. To slash the running costs, Crozier is proposing to replace some rural outlets with mobile post offices, while other small post offices will be merged. The talks come amid a row at Whitehall over who should fund the rural subsidy, with the Department of Trade and Industry trying to pass the burden to the Department of Environment Food and Rural Affairs.

Britain is to have its first national address register to improve service delivery across the public and private sectors, the government announced on Friday.

Inaccurate addresses can disrupt business deliveries, emergency response times and the collection of council tax. In the past, such problems have been viewed as modest or isolated and often resolved by the local knowledge of a postman or council worker.

But as computers and technology are increasingly used, small discrepancies in an address, irrelevant to a person, can lead to problems. A national call centre dependent on a database cannot know each locality, for example.

The aspirations for e-government, the introduction of electronic conveyancing, ID cards, offender tracking and a fraud free electoral system would all founder, if there was no recognisable address for each home.

The Conservatives have signalled their opposition to the partial privatisation of the Royal Mail, increasing the political difficulty for the government of accepting the plan favoured by the group’s management. Speaking to the Financial Times, David Willetts, the new shadow trade and industry secretary, said he was “sceptical” about the proposal to transfer a majority stake in the state-owned postal operator to its staff. He warned that the Royal Mail could end up being neither politically nor commercially accountable, in a “sort of limbo, where there’s nobody putting them under pressure to perform”. Ministers are still considering whether to cede to pressure for the scheme from the postal operator. Any such change would require approval by MPs – Tory opposition, allied to a likely Labour rebellion, could make such a vote hard for the government to win.

Congratulations to Allan Leighton and the rest of the management team at Royal Mail for turning a deficit of Pounds 318m four years ago into a Pounds 537m surplus last year. They also deserve praise for paying a Pounds 1,074 bonus to the group’s staff – a sensible reward for their co-operation with a remarkable transformation. The next step must now be to take Royal Mail into the private sector, but Mr Leighton’s ingenious strategy for winning government backing risks an imperfect privatisation.