Free the Post Office

Yesterday we had another very unsatisfactory debate on the Post Office in the Commons.

The Conservative front bench pointed out that 2500 sub Post Offices will close according to the government, but the top management of the business probably will close many more over the years ahead as they do not think they can make money out of the large network they currently enjoy. Conservatives proposed that sub post office contracts should be loosened to allow them to undertake more business for others to give them a chance of survival. It was a sensible and modest proposal, but the government could not bring itself to say "Yes". It was difficult to understand why.

The whole Post Office suffers today from poor morale and a very lop sided management approach. In recent conversations with senior management at the local level, I discovered that local postal businesses are set cost reduction targets, but they are not told what their revenue is and have no control over their property and other assets. In a normal business senior managers are set profit targets, and have some freedom to grow the reveneue rather than cut the costs to deliver. They also have more influence over property and capital investment than postal managers have to help them meet their targets.

There are a whole series of good property deals to be done to give the postal business better premises for the mail activities, freeing in town sites for other commercial development as well as for the counters business. There are ways of growing postal and other related revenues. The bosses of the Post Office should have another look at the way they organise the business, and give good managers more scope to manage. Instead of managing cuts and decline we then might see more growth. Local business units need to know what their own revenue account and balance sheet look like. The top management might then be surprised at how innovative some would become.

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  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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