Crown Office Closures

A New Year and the same old story from Post Office Ltd.

Some Crown Offices to be closed and others to be hived off to the private sector.

Roger Gale from Post Office Ltd comes out with the startling comment.

“We have to continue to adapt to customer demands, which our network must reflect. We cannot look to the taxpayer to subsidise crown branches that lose money.”

But in the same breath another Post Office Spokesman said “The Post Office said losses in the network of crown post office branches had been reduced from £46m a year in 2011-12 and that part of its network was now breaking even.”

Taken together the two statements make no logical sense whatsoever.   Crown Offices are not losing money but we have to close down Crown Offices that are losing money.   Why?  So they can make more profit?  So what are they going to do with that extra profit?

As I have said before here, POL Management operate under the belief that they are accountable to no-one.  They can do their own thing without the slightest intervention from the Government.  Latest example is that for some strange reason they have decided not to publish their interim results this year.   So critics of the Crown Closure program cannot refer to the latest set of results to show that there is in fact no reason for the closure or sale of these branches until the deed has been done.

This is not a new process.  They have done this before.  WH Smith did very nicely thank you very much when they agreed to take on Crown Post Offices in the past.  What was hidden away in POL’s accounts was the payment that POL made to WH Smith to ensure they took them – it was many millions of pounds.   WH Smith were so proud of the contribution their newly acquired Post Offices made to their bottom line they omitted to mention the words ‘Post Office’ from their annual accounts for years afterwards.    Since then of course WH Smith has been closing Post Offices as have another recipient of Post Office public money, McColls.  Again several million pounds changed hands as an incentive for them to take the new style branches on – yet only a few months later McColls started unloading these branches and will continue to do so.

Crown Offices aren’t the problem here.  POL management are.   They represent the totally unnecessary overheads required to operate what is basically a shop selling postal and financial services.  Royal Mail Group should be particularly concerned that Post Office can’t make a going concern of selling RMG’s products – perhaps RMG should now be considering whether their Mails Distribution Agreement with POL is worth re-negotiating?   Who needs POL as a middleman?  What added value does POL bring to the table?

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One thought on “Crown Office Closures

  1. It’s not exactly surprising that Smiths et al are winding down their PO involvement.

    On paper, and in aggregate, PO transactions cover costs and make a marginal profit, which, together with a sizeable bung, no doubt made it a viable proposition.

    I’m fairly sure they just didn’t appreciate the enormous volume of a) non income generating transactions; CoP, balance enquiries, declied cash withdrawals, taking franked/ebay mail etc etc b) back office crud that serves no useful purpose but all takes staff time that must be paid for and c) the level of training necessary to make any staff member even averagely productive.

    Throw into the mix the usual array of weird and wonderful once in a lifetime transactions, and their decision seems even more rational.

    In an organisation so awash with data, all these abortive/earnings negative transactions could (and should) have been fully factored in to the information POL give to WHS and any other PNO.

    The fact that they do not appear anywhere on the various spreadsheets bandied about by POL to try and prove their case can only be deliberately duplicitous – I refuse to believe that operational people at POL are that incompetent.

    The fact that the CMO POL seems to spend more time giving interviews to various PR vanity journals (presumably looking for a new job) than he does working jus underlines your point about out of scale and unnecessary HO expenditure.

    With the next round of bank branch closures, POL MUST ensure that all banking activity generates an income to SPM, otherwise (not for the first, second, N time) the banks will be shifting their costs onto us

    Like

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