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He continues by saying:
In this financial year it is estimated that POL’s income will be in excess of £1.2bn, which includes a Network Support Payment of £210m from the government. Yet it is projected that subpostmaster and agent pay, including all WH Smith branches, will be in the region of £480m. This amounts to just 40% of POL income and is totally unacceptable.
If POL doesn’t tackle the following issues in the very near future then I fear for the long term survival of an independent company without Royal Mail Group:
1. Crown Offices. It is imperative that the annual £60m loss incurred by these offices is eradicated. POL must work to truly stop these losses; no smoke and mirrors please.
2. Cash in Transit (CIT) costs. I believe that this department should be streamlined and asked to bid for existing work through a new contract. They must be instructed that their bid should be £30m per year cheaper than at present otherwise it will be put out to tender.
3. Pension Costs. It is our understanding that these costs are now in the region of £60-65m per year and are linked to a career average pension scheme. Whilst this is cheaper than a final salary pension scheme, it may still be unaffordable for POL.
4. Headcount. It is clear to me from my many visits to Old Street that the number of management and administration staff in this company has increased substantially over the last year; I fear to a level that is not sustainable.
5. Provision of Stores and Stock. Are we doing it in the most cost effective way?
6. Provision of equipment and technology. Again, can we do this in a more cost effective manner?
These are just some of the issues that need to be resolved if POL is to have a sustainable, long-term future. Our ultimate aim is for subpostmasters, staff and customers to own a stake in the business and failure to act means that subpostmasters will be suffocated by the expanding central costs of this company.
