Where the NFSP went wrong with NT.
I am biting my facetious lip here, so let me just write about the choice the NFSP made to support Network Transformation and I will try not to mention George Thomson.
The NFSP would of course have known about the introduction of NT long before news of it was made public to the rest of the network, but there was an element of a rush job shortly after the General Election in 2010 and the Government surprisingly made the funds available – all £1.34 Billion of it – very quickly.
I am in a relatively good position to write about how the NFSP got it wrong because I was an active dissident as news of this fiasco broke and hindsight has proven me to be correct. Now I am sure that will be seen by many as a controversial statement so let me just provide my evidence to support it straight away.
- The £1.34B has now spiralled up to £2b with more to come.
- As was pointed out by all the objectors at the launch of NT there remain a substantial number of SPMRs who fell into the Stay As You Are bracket that now are faced with ruin.
- The objectors raised concerns from the outset, in some detail I might add, that the prospect of new Government work to support the network was unlikely and this has proved to be correct
- But most significantly for the Government, financial targets have not been met and POL are now in meltdown trying to make good their promises.
- And of course as it was pointed out to NFSP leadership in 2010 the result of this doomed project was always going to lead to the financial ruin of the NFSP – now sustained only by dubious payments from POL.
Just look at the figures:
From 2012 to 2015 SPMR fees have dropped by just £48m despite the promise that NT would cut these costs substantially. Forget interest rates which would make the calculation even more alarming, it would take 40 years to claw back the investment the Government has made in the network at this rate.
SPMRs/Operators under the local model are now paid peanuts so there is no more savings to be made there. The enterprising individuals who switched to Mains are now, by and large, doing rather well and in probably over 50% of these establishments actually making more money now than they were under the old TRPs. Plenty of scope there then to reduce Operator costs!
In 2010 we made these points and more but were overruled. The NFSP leadership replied to our concerns with their insistence that this was the last chance saloon for the network and that there was no plan B.
Only now do they seem to realise that there was in fact a plan B and they are adopting it with regard to highlighting the massive overhead costs of the POL Head Office operation. POL have become expendable in my view. There are countless examples out there of how enterprising former SPMRs have established competing outlets to Post Offices, offering similar services for more reward. The idea that RMG could introduce a direct franchise is now on the table with senior observers, bypassing POL completely. RMG after all no longer report to the Government they report to their shareholders who want to maximise profit, not subsidise a failing organisation like POL.
For my part, I produced in some detail a Plan B for the Scottish Government, should the unlikely have happened and we gained Independence. There was no subsidy required and profits would have been reinvested in to the network. That Plan B was all about stripping out the POL infrastructure and putting SPMRs in control of their own destiny. (Whatever happened to Mutualisation?) That was 4 years ago. Why has it taken the NFSP so long to realise what the real problem is?
Thomson and his team have led all remaining SPMRs and Operators down a steady path to oblivion. As you assemble for your conference, perhaps NFSP members will now realise this and fight back. Only through a change of leadership will your network survive.