Conference 2025: Future of the network panel discussion

The panel

Calum Greenhow, NFSP CEO

Nigel Railton, Post Office Ltd Interim Chair

Gareth Thomas, Postal Affairs Minister

Graeme Nuttall OBE, former government advisor on employee ownership

Chair: Tim Boothman, NFSP Chair

This year’s Conference featured a focused panel discussion on shaping the future of the post office network, reports Simon King. NFSP Chair Tim Boothman noted that four key themes emerged from the 30-plus questions received – remuneration; the future size, makeup and model of the network; oversight and governance; and the relevance of post offices going forward.

Remuneration

Martin Ball asked when postmasters will finally be paid properly for the work they do in terms of sales, services, administration, skills and longevity of service? He pointed out that after nearly 25 years, he works 37 and a half hours a week in a rural post office six days a week. Last month, he was paid £9.31 per hour gross, despite the National Minimum Wage rising to over £12 per hour.

Nigel Railton, Post Office Ltd’s (PO) Interim Chair, said: “I’ve been chairman now for a year, and one of my observations when I first joined was that postmasters were not being compensated enough.

“That’s why we did a Strategic Review last year. That’s why we’ve come up with a plan to increase postmaster remuneration significantly, not just in the future, but from next year.”

Gareth Thomas, Postal Affairs Minister, said that one of the most significant challenges is how to increase the number of people going into post offices.

“One of the things, as Nigel alluded to, that we are working on is, how do we improve the commercial future of PO?

“The one obvious area where there is more potential is in banking. Not only does that matter for you as postmasters, but it also matters for the future of our high streets.”

NFSP CEO Callum Greenhow said that remuneration is a complex aspect.

“I think you are worth far more than the National Minimum Wage,” he said. “If all you’re getting paid is the National Minimum Wage, then that’s not going to cover any of your costs associated to providing the service you do.

“If half of the network is not profitable, how much of the network is actually viable, because if you earn £1 of profit –you’re profitable, but you’re hardly viable.”

Calum said that while there is growth in certain areas, that doesn’t necessarily mean that it’s being spread evenly.

“If you happen to do well in banking, you’re probably going to be okay,” he said. “If you happen to do well with PUDO products, you’re going to be okay. If you’re not doing either of those, you’re probably going to struggle.”

Nigel agreed that the way remuneration is calculated is way too complicated and needs to be simplified: “Part of the exercise that Neil Brocklehurst (PO Chief Executive) and the team are doing is to try and simplify it, make it easy and fair for everybody.”

Employee ownership

Graeme Nuttall OBE advised the UK Government on how to promote employee ownership in private companies. That was a decade ago, the government accepted his recommendations, and he delivered the Nuttall Review.

“As a result of that, the UK has the most vibrant employee ownership sector of any country in the world,” Graeme said. “You may not realise it, but there is more than one company a day converting to employee ownership now; over the last 10 years, over 2,000 companies have converted to employee ownership in all sorts of sectors.”

Graeme continued: “I believe that the lessons learned in relation to growing that sector so significantly can be translated into the post office network; I know you’re not employees, so forgive me for talking about employee ownership, but I believe all those elements can work well to deliver better business, and as you say, proper remuneration is a core part of that; in employee-owned companies the workers will get a market rate of return – an attractive level of remuneration as a base in order to go about their daily lives.”

It was then asked if there be a fixed payment in the next review?

Nigel said: “I’ll be very honest, I don’t know. We’re thinking about the way that remuneration for postmasters is sustainable for the future and is structured in the right way so it’s fair for everybody.

“The current model doesn’t work; we can all agree the money that you guys receive isn’t enough. It’s no good fixing one of those things, we need to fix both of them, and we are working through that – I give you my commitment that we will.”

The social value of the network

Minister Thomas said that he recognises the social value of the network.

“In many communities, particularly in rural areas, the post office is almost the only place where people can come together,” Minister Thomas said.

“Making sure that the Post Office is an attractive place for someone to work, to maintain that point of social connection is absolutely critical; and the long-term changes we need to make in order to keep the Post Office attractive for people who want to come and provide that service, as you all do, is very much in our minds.”

Vishal Thakkar from the London Region said that even with remuneration going up, expenses are high. He asked if business rates can be discounted?

Minister Thomas said: “The 75% relief on business rates was due to end on April 1 this year. We committed to reforming business rates. Because of the way the whole valuation system works we can’t do that until 2026/27, so we have extended relief albeit at a slightly lower level.”

“My colleague, Chancellor Rachel Reeves, is committed to business rates reform, and we’re expecting an announcement on the next stage of that work very shortly.”

Jim McCafferty from Northern Ireland asked how important is it that the NFSP and its members, are part of the consultation process when it comes to any reform in remuneration?

NFSP CEO Calum Greenhow said it is vital: “As I keep on saying, you are investors in the network.

“Everybody else invested someone else’s money in this business, but you actually invested your money and that is your investment. You’re looking to protect it, you’re looking to get a return, and at some point, you’re looking to sell; for many of you that’s your pension.

“There are people in this room who purchased post offices 20/30 years ago, and sold it in recent years, and they’ve sold it for the same as what they paid for it all those years ago; in other words, their investment has not increased.”

Oversight and governance

Jim then asked if an Oversight Committee, as put forward by the NFSP, would be considered?

Minister Thomas said: “After the Horizon scandal, there’s no question that the way in which PO has been governed needs to change.

“Later this year, we’ll receive the report from the public inquiry that Sir Wyn Williams chaired, and I’d be surprised if he didn’t make some comments about future governance of PO going forward.”

Minister Thomas added the Green Paper on the future of PO will ask a series of public questions about people’s views about the way in which PO should be governed in the future.

“The crucial thing is, how do you begin to get serious, meaningful culture change, so that we get nothing like the Horizon scandal ever again in the Post Office,” Minister Thomas said.

Graeme touched on mutualisation, which he said may be an option in the long term.

“I think a straight jump from where we are now to mutualisation would be extremely risky,” he said. “For me, as long as the workers in the business have a significant shareholding, some shareholding that provides the extra lever that is missing now, I completely endorse the idea of postmaster representatives on the Post Office Limited board. And I like the idea of a committee working within Post Office Limited that can be consulted.”

Calum said that he was going to use some quite strong language to make his point: “What we know is that PO of the past lied and cheated us.

“They treated us with a level of respect that really was utterly unbelievable, and we were treated in that way for a long period of time.”

Calum continued: “I think it’s great that there’s a change in management, it’s refreshing. From our perspective, we’re still hurting, we’re still feeling betrayed, and it’s going to take time for us to actually come around and trust, which is why an Oversight Committee, from our perspective, is really important.

“I see the Consultative Council and the Postmaster Panel, and in essence, the person who lied and treated to us is determining how the repairing of the relationship is going to be; they’re actually driving the narrative. They’ve got control and I think that needs to be taken out of there, and it needs to be independent – if history teaches us anything, successive governments and successive levels of the Civil Service have failed in their duty to hold PO to account.”

Nigel said that he wants to be part of the solution.

“In order to be part of the solution, we have to recognise the problem we’re trying to fix. If I just look back a year since I’ve joined, a year ago, PO hadn’t had a plan since 2019.

“An executive team and management team wasn’t as skilled it needed to be and there was very poor governance. The three most important things any business needs are a proper plan, the right people in charge to deliver it, and good governance to make sure they are right – all those three things were missing.

“Our absolute intention is to make governance work for postmasters, so that your voice is not just heard, but is acted upon, and it’s the most important voice in the room.”

Calum said that the Consultative Council and the Postmaster Panel are not chaired by independent postmasters, but board members of PO.

“Having something outside of PO makes us able to hold you to account,” Calum said.

A member from the South West Region said that postmasters need consistency and commitment, so asked Nigel if his position will be made permanent, and what would be his motivation to accept the position.

“My motivation to become interim chair in the first place was driven by postmasters,” Nigel said.

“I didn’t know whether I wanted to, to be honest, I nearly said no; I changed my mind, because a couple of postmasters that I knew from my time at Camelot called me and said I could really help.

“Hopefully you’ve seen the difference a year makes; a short answer to your question, but yes, I’d like to become permanent.”

Future size and shape of the network

Leagrave Marsh member Vipin Shah asked if voluntary closures, with lump payments to postmasters make sense, so that other offices benefit from the closure?

Nigel said: “We are reviewing the size and shape of the network. We currently have restrictions that the Minister has set, so we have a target, but I think we need to look at what makes economic sense.”

Calum said that Network Reinvention, Network Change and Network Transformation never worked.

“In some areas, deserts were created, and then in other areas there was an oversupply,” Calum said. “Another aspect is that so many of you actually own your properties or are fixed into leases.

“We need to work together with PO to identify where we need a full-time service, where we’ve got an oversupply, where we’ve got under supply, and providing help and support, to ensure that the right post office is in the right location. That is not a five-minute job, and it will take significant investment to do that.”

Calum continued: “As a member-led organisation, it is our duty to listen to you and to bring to the top table what you want. For some, it will be to exit the network with a compensation package, for others, you may see an opportunity that you want to take, and if you can get the assurance, or the financial support, you can make a business decision.

“It’s a very complex network, run by some fantastic people. The historic aspect has created the mess that Nigel and Neil are trying to sort out, and it’s going to take time to identify exactly what that is and come up with a plan to sort it.”

Minister Thomas said that one of the responsibilities of government is to think about the role the post office plays in each community.

A plea for more government work

Saj Hussain asked Minister Thomas if he might offer a lifeline to postmasters, by offering some government work.

Minister Thomas said: “I cannot roll out the contents of the Green Paper here and now.

“I would be being dishonest with you if I said that I thought there was going to be a significant increase in government services being able to be provided in the post office – you were walked up the hill once before. I’m not going to do that today.”

Minister Thomas said he had been struck by one of the conversations he had with a postmaster in his constituency about the generational change that there is in terms of people who use post office services.

One delegate commented that older customers cannot understand why they can’t pay for their TV license in a post office. “Why has the government actively given all this work to other providers and not the post office,” he asked.

“Banking is a lifesaver. Banking came to the post office because they had nowhere else to go – they miscalculated a cashless society by years.”

Relevance of the post office on the high street going forward

Tim Allen said that last year, he read out the list of 11 government services that had been removed from post offices since the introduction of Horizon.

“There are quite literally millions of people in the UK who are scared of digital crime,” Tim said. “They’re scared of paying bills online. They’re scared of scam emails from fake banks, or they’re simply not digitally savvy, or they’re digitally poor.”

Minister Thomas said that as someone who struggles to use his own mobile phone, he was instinctively sympathetic to the issue that Tim raised.

“The challenge, for PO and for government more generally, is, how do you ensure the post office provides a service to those people who want to do things in-person, but how also does it provide a service to those who are not digitally excluded,” Minister Thomas said.

In his response to the question, Nigel spoke about when he took over as chief executive of Camelot in 2017, where he said the National Lottery was in “terrible shape”.

“The thing we found was most damaging to us was the loss of relevance,” Nigel said. “People didn’t really care about the National Lottery, because it had lost its relevance over time – it was the link back to good causes that we lost. People were playing the National Lottery to win prizes, not support good causes. We went on a huge journey with the distributive models to make sure we could tell good core stories, and then we got relevance back.”

Turning to PO, Nigel said: “In terms of government services, if the former management was sitting here, there’d be all blaming the government for not giving them services – I’m not going to do that.

“I think it’s on the PO management to work out how we should be getting those services on your behalf. If PayPoint is being granted services from the government, why is it going to PayPoint and not to PO?”

One member said he wanted PO to take ownership of these problems and deliver them to government with a strong message as to why government services have got to come back.

Nigel said: “It’s going to take some time to win all your trust back, but trust me, I take ownership. That doesn’t mean you can solve everything, but what it means is we can take ownership to try and solve it, and if we can’t, we’ll come back and explain where we are.”

Minister Thomas said that he could hear the appetite of delegates to have government services restored, but he encourages postmasters to look at the Green Paper.

“I want post offices in every community to succeed and working across government and with PO to ways we might do that,” Minister Thomas said.