Tim Allen’s Postmaster Ponderings: Are you about to be Strategically Reviewed? Part Deux

This article is the individual ponderings of a postmaster and does not necessarily reflect the views of the NFSP but is the sort of communication we receive or hear that in turn is reflected in our future policies/actions.

The Postmaster Conference held last Tuesday (18 June) was, as ever, a tightly scripted, choregraphed procession of Post Office Ltd (PO) glitterati with well-rehearsed slides and tight timing to ensure the live feed and recording would be finished by 8.30pm.

Scripted of course until PO opened the floor to the minefield that is Questions & Answers. Questions sent in can of course be filtered but questions from the floor are not. Questions from the floor are sometimes frustratingly lightweight but every now and then there’s some real toughies. Firstly, one questioner asked when the number of post offices would be cut but included the conclusion that it is necessary so that the remainder could be paid enough to earn a living. Then stood up a postmaster “unafraid” he said of asking hard questions. “£30m profit on a billion-pound turnover was pathetic.  What were they doing? Why did half of the entire billion-pound turnover have to go into PO leaving just half for postmaster renumeration. Wasn’t it supposed to be all about us? What was the new chairman going to do about it and when?”

The room waited in silence for Nigel Railton to answer. 

Mr Railton became chair on 1 May, appointed by Kemi Badenoch after the very public sacking of Henry Staunton for crimes still a bit unclear to me. Mr Railton had been the first of the dozen PO board members to speak and, for those of us with no previous knowledge of him his voice was a bit of a shock. Here he was, a new chair in the flesh and blood talking at Conference. A chair who came from us working folks, a man who proudly told us he grew up in a box and started work on the railways in a signal box and had somehow, by hard graft and brilliance become CEO of Camelot Group and rescued them before accepting the job to be chair of PO. He told us, in so many words, that he would take no prisoners to turn us into the organisation we need to be.

Before we get back to Mr Railton, let’s have a quick think about the question he was being asked. PO had just presented their, as yet, unaudited results for the 23/24 financial year and, to be precise seeing as we like numbers, £937m is the reported turnover of which 44% (£413m) was paid out in remuneration (up by £14m on the previous year). Compared to 22/23 there was a 0.4% swing in our favour looking at the percentage of remuneration paid out against total PO income.

On the question of profit PO are actually damned if they do and damned if they don’t. I’d agree with the questioner, £32m (the actual profit figure) is, on the face of it, woeful and, for context, the profit reported in 2019/20, the last year that Nick Read could be said to have had absolutely no impact on, the profit was £35m on £957m turnover. If PO had made a 10% profit that would be somewhere of the order of £100m and had this been the case the outraged calls from the floor would be “why aren’t you giving that to us?”. On the other hand, if PO gave all their profit to us or invested it in tangible kit like note counters, shop fits to modernise PO counters or NBIT so profit was zero, we would still be asking “Why hasn’t PO made any profit?”.

It was time for Mr Railton to give his answer. He had already formed a view he said, and he would be swift to deliver it but it had to be fully informed and follow an appropriate path, it was he said, necessary to have a Strategic Review and we would know the results of this by October.

October? I wonder if he’s right? Let’s be clear on at least one of the few things we can be certain on and that is that no Government is going to allow any significant change in PO to occur without it taking credit for it. Kemi Badenoch appointed Mr Railton and she might not be in post come August. My guess is that Mr Railton may well survive a change in Government but whatever conclusions he comes to will be something that a new Government will want to think about and do some pot stirring of their own. 

And what of the review? This scares me quite frankly; Mr Railton has been in post for less than two months and old lessons learned seem to get unlearned with changes at the top. Whatever your predecessor did was clearly wrong, so you want to come to your own conclusions. That’s often fine but it’s not necessarily fine in an organisation as layered and as complex as the Post Office.

As well as the question of why PO is so expensive, there is the question of what the business opportunities are for it. The questioner asking when post office numbers would be cut should have actually been looking for reassurance that this is the LAST thing PO should be contemplating and only then after all other options have been exhausted. A key strength for any would be commercial partner is surely the number and location of PO branches. Cut them and the USP is lost.

Another questioner asked what the future for banking looked like and the answer he got was that PO were not seriously thinking about becoming a bank because it costs a lot. To my mind an answer as to why not to do something rather than why you should do something had been given.

Banking IS a massive commercialisation opportunity as is government services. It should be incumbent upon current management to fully explore and research the past to fast-track best outcomes for the future. PO had a bank it owned once, it was called National Girobank, and it was ahead of its time with technology adoption. Look it up, it’s interesting.

Maybe they know, but if they don’t PO should also look back to see how far Alice Perkins, a Chair, before, the Chair (Tim Parker) before the Chair (Henry Staunton) before the new Chair got on with her Strategic Review of business opportunities. 

Perhaps my overriding thought with regard to the Strategic Review is that no one ever seems to actually mention our customers. PO say they are nothing without postmasters, but I say we are nothing if we are not relevant to the everyday lives of our customers.

People in power over us sometimes talk about our social value but never about our social purpose. To be of value we have to be relevant to people’s lives and how they function, all of them, day-to-day.  All people are not digital people so here's my Strategic Review wish-list.

It’s a mix of making life easier and less stressed for our customers and ensuring post offices don’t get progressively destroyed by people who don’t really understand what they are, or could be:

• A sensible review and restoration of all Government services that have been taken away from post offices so people have the OPTION to transact online or through a real Government front office.
• A mandate from Government that all utilities operating in the UK economy have to give their customers an OPTION to pay their bills at a post office.
• An ambitious plan for Banking, supported by Government, to extend that already achieved and a reincarnation of National Girobank (1968 – 2003) i.e. a Post Office current account bank for consumers and SMEs only.
• A continued drive to keep Bank Hubs in the management of PO and postmasters, and aligned with the post office that might only be a few doors away. The future of high street banking even in cities will probably be that these are the ONLY type of bank we see on our high streets.
• No further post office losses in rural areas.
• One Stop PUDO destination.
• An Oversight Committee as proposed by the NFSP which understands the social, regulatory and financial environment in which we operate and plans for a successful sustainable mutualisation as soon as practically possible.
• Sensible minimum payments for EVERY sale we process for PO and Royal Mail e.g. 2.8p / 3% is not a sensible payment to us for the customer who just wants to buy a stamp.
• A rebalance of total revenues in favour of postmasters. There should be a baseline payment for the responsibility that is placed on the shoulders of a postmaster, the free advice we give to customers and the back-office functions.
• A hard and honest look at PO, by PO, to see what bits of it are a cost and don’t actually add value to the bottom line.
• A hard and honest look at PO, by someone else, to see what bits of it are a cost and don’t actually add value to the bottom line.
• Stop wasting money on lawyers and sit down human-to-human with every Horizon claimant and reach a meaningful and agreeable settlement. These are reasonable people. Postmasters robbed of their businesses, but still reasonable people because that is their calling in life.
• Anything else I’ve forgotten.

Let’s hope Mr Railton finds some of our elderly and non-digital customers and thinks about their needs before answering one of the questions from the conference floor and Strategically Reviewing some of us out of existence.

Tim Allen

Kington Main

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