We are told a big review of the Post Office awaits Lord Mandelson. The Unions are afraid it means faster rounds and more job cuts. Taxpayers are afraid it means more subsidies and underwriting the huge losses in the Pension Fund. What it reflects is the poor management of the company in recent years, cutting the quality of the service whilst increasing the prices and demanding more cash from the government.
What should be done? The first task should be to empower regional and local management, making them responsible for their own revenue generation as well as for costs, and putting them in charge of their property and other assets. It’s not much fun for local managers, constantly being told to cut costs and offered no control over assets and revenue to grow the business in more positive ways.
A couple of years ago I proposed a way of improving the service and releasing cash in my Wokingham area. The main Post Office in Wokingham town occupies a prime position. At the front is a handsome facade and shop space to handle the counters business. At the rear is cramped and inadequate sorting office space in assorted sheds and industrial style building, with a narrow access to the side across a busy town centre pavement and main street.
I suggested they sold off the sorting office and back land for what then would have been a lucrative office redevelopment, bought a suitable modern property on an industrial park with good vehicular access for sorting, and increased the number of counters by knocking the shop through into the store room within the main building to cater for increased demand. Local management thought this all made a lot of sense, but the idea got lost in the rambling central bureaucracy.
Instead, the central management decided on the closure of two branch offices in Wokingham, claiming people could go to the main Post Office in the Town Centre instead. We objected, but they did not wish to hear us. I said they needed to increase the number of counters at the main building first, as there were already long queues. Instead they blundered on with the closures, causing worse queues and worse service in the main office as well as making it more difficult for the elderly to get there at all without a car.
The Wokingham example is just a small one, indicative of problems across the network. the whole thing is one big missed business oportunity, a great franchise that has been grossly mismanaged in recent years. We cannot afford the losses, and cannot afford the Pension losses. Both fund and business need new directions. Whatever the rights and wrongs of the speedy postman debate, the bigger problem the Post office has is the quality and power of management. There is some good local management, and doubtless some bad. None of it has the power to do the job. That’s why the results are poor, there are many missed property opportunities, and many missed opportunities to fire up the staff. They could start by giving them all a share in the business. That would help electrify it.