More Network Transformation Numbers

I am not quite sure why it seems that it is only me looking at these numbers – glad to hear from anybody who can point me to another sceptic.

So let us look back at some numbers covering the last 5 years of NT.

2011 2012 2013 2014 2015
People Cost 256 254 259 255 238
People Number 7782 7798 7886 7787 6876
Avg Salary 32,896 32,572 32,843 32,747 34,613
Subpostmaster Cost 475 483 478 448 435
Revenue 971 980 1024 979 976
Admin Employees 1345 1691 1324
Crown Employees 4511 3946 3406

The purpose of NT was to reduce the annual government subsidy provided to maintain the network at its current size.   That means in 2011 there were about 11,500 branches and in 2015 there were still about 11,500 branches.   Those branches were still selling the same products less of course the ones that were lost such as DVLA and NS&I.

Therefore the administration overhead would be the same so the only cost saving that NT could produce would be a reduction in the remuneration paid to subpostmasters plus a reduction in the crown office losses.

By 2015 they had converted 4097 branches and sold off 47 Crown Branches.

(As an aside as I look at these numbers I have just realised that there is a average of over 10 crown employees per branch! )

Luckily for comparison purposes POL revenue for 2011 is roughly equal to 2015 at +/- £975m

So £1.345b later – subpostmaster costs have reduced by a mere £38m – some might call this a success BUT there is more to the story than that.   Since 2011 POL have lost a significant number of contracts.

Take for example the DVLA contract – in one year 2013/14 alone POL lost £22m in revenue from the DVLA.  Surely at least £10m of that would be attributable to SPMR costs?

And then there is the product mix – While overall revenue is much the same a fall in income from Mails, Telecoms, and Government Services is matched by a rise in Financial Services products  which by and large are not sold through the greater part of the network.  So the effect of that would be to reduce SPMR pay further.

POL of course do not provide the breakdown to show what proportion of the reduced SPMR costs are down to the effects of NT but they ARE NOT £38m – they are much much less.

But of course one of the key elements of this that has gone unnoticed is that the majority of those offices that chose to convert to Main Style branches did so on the basis that due to increased Transaction Payments they would stand to benefit from conversion.   It is extremely likely that all being equal had NT not taken place at all that subpostmaster costs would actually be far less than currently stated.

This is an appalling situation and one that needs an independent auditor to assess.

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4 thoughts on “More Network Transformation Numbers

  1. I still cannot understand how even an organisation as supine, useless and econoically illiterate as the Federation could have “negotiated” terms where no increase in transaction rates were somehow acceptable for Locals expected to be open 60% more hours, yet felt it essential to increase Mains where hours are much shorter and volume much greater.

    And the Mains are by and large being allowed to cull their “stupid” hours; Saturday afternoons and Sundays, yet Locals are expected to be available to tax a SORNed HGV, changing tax class to exempt/disabled at 6.30pm on Bank Holiday Monday

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  2. In recent weeks, I have been into a Co op convenience store “local” in Leeds where I was told the Post Office closed at 1pm on Saturdays until 9am Mondays.
    i went into a Spar “local”, with regulation combi till, to post a letter by recorded delivery, to be told I had to go to the PO counter at the rear to do that. Waited 10 minutes to be served, while no customers to be seen at the retail counter.
    You are only as good as the weakest link, POL, and boy do you have some weak links.
    Your Brand is eroding faster than a sandcastle on an incoming tide.
    If you progress to Basics, the promenade will be next to go.

    Jofe

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    • Hi John

      A consumer report due out shortly will highlight these problems with the Local model. But POL need to be aware that if they try any strongarm tactics on these new operators they are likely to be shown the door with the combi counter shoved in a very uncomfortable position. Cheers, Tim

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