Postal Affairs Minister Kevin Hollinrake on the PO brand and looking to the future

Postal Affairs Minister Kevin Hollinrake explained why he believes the Post Office Ltd (PO) brand has a bright future at the NFSP Annual Conference.

Minister Hollinrake was part of the Your Questions Q&A panel along with PO Chief Executive Nick Read, NFSP CEO Calum Greenhow and Darren Burns of the Timpson Group.

In an open and frank debate, the panel took several questions from postmasters with the main topics covering culture, the future strategy of the network and how to restore brand reputation. The full video will be on our YouTube channel in the coming days.

Minister Hollinrake believes the PO brand remains highly regarded at a local level and said: “Clearly PO has a past and some of it is a chequered past, but I think it has got a very, very bright future, and I’m not looking through rose-tinted spectacles.

“Prior to politics, I was in business myself. Postmasters are investing their hard-earned money and we’ve got to make it work for you.

“The business I had was a franchise business, so in many ways it’s a similar relationship to PO and yourselves.

“First and foremost, what we’ve got to do is get to a case where a decent postmaster in a decent location is making a decent living.

“Tim (Boothman) and I disagree a bit on this, but I think the brand, although it’s suffered its problems, at a local level it’s very, very highly regarded.

“I speak to my colleagues all the time and whenever a post office is closing in my patch, you get outcry from the local community. They love their post offices, and they love their postmasters, so the brand has got a bright future.

“We’ve not got a damaged brand here that we need to change somehow. We just need to invest properly in that brand.

“In terms of the future, it has got to be to make branches more profitable. There’s only two ways you can do that, you’ve got to drive revenue up and drive costs down.

“There are some opportunities to drive revenue up. Clearly consumer habits have changed so very few of us in this room will actually use services the way we used to in terms of applying for a driving licence or applying for car tax. People are doing that online.

“We’ve got to find other ways of driving revenue up. Certainly, banking is a big opportunity. Banks have saved probably £3billion a year by closing their branches. They need to be paying a bigger share of those savings into the post office network to drive up revenue.

“The same with parcels and parcel hubs. All of these things will drive income up.

“We’ve also got to make sure we drive costs down. Nick and I are very clear that includes costs at the centre, so as money comes into the network, more of it flows into individual businesses.

“We also need to have a frank and open discussion about the size of the network.

“Clearly, it’s easier to have a profitable business if there’s fewer businesses around you. We need to have a conversation around that.

“Politically that’s a challenge. No one wants to see post offices closing in their area, but we need to have a grown-up conversation about the size of the network going forward.

“That’s the opportunity Nick has now, along with Calum, Tim and the team to work together with the new PO chair, Nigel Railton, who I regard very highly. Nigel has a great background in terms of his commercial experience, CFO, CEO experience, so he understands about businesses.

“He’s worked hard, gone to Night School, to get on in life. He wasn’t born with a silver spoon in his mouth. He’s somebody who I think you’ll identify with very well.

“I think Nick and Nigel working together on a strategic review in terms of revenue and cost level will make sure you can run more profitable businesses going forward.”