Post Office Network Transformation – Wrong from the start…

Post Office Network Transformation – Wrong from the start…

I believe a book is being written about the problems within the Post Office.  This could well be a chapter in its own right.   I understand that the majority of readers of this blog have a close connection with the Post Office and therefore understand the background to what I am about to point out.  It should have been ‘bleedin obvious’, to use the vernacular, to all concerned and that, dear reader, probably gives us the best insight we have into the complete lack of commercial acumen within the upper levels of POL management.

There were, and still remain, many good points about NT which sadly keep getting rolled out to hide the mess underneath;  a mess of POL’s own creation I might add.   The fact is though that right from the start it was doomed….

Let me take the Main Post Office concept as an example.   In 2010 news broke of the Network Transformation project.  Details were sketchy and even the NFSP had a problem keeping up with what seemed like daily changes to the scheme.  So when it became clear that only 3000 or so Sub Post Office would become the chosen few every SPMR wanted to know is they were to be one or not.  Investment into the branch coupled with increased Transaction related pay seemed liked a good idea as well as the prospect of increased value of the business.   To that end, and to answer these SPMRs a list was produced for POL people so they would know which branches were the chosen ones.   George Thomson, General Secretary of the NFSP, admitted to me at the time that the list existed but Freedom of Information requests to see this list were denied.  Why the secrecy?

So even if you were one of the chosen ones you had no way of finding out other than to apply the general rules for being selected and that was to do with footfall and demographics.   You might have had a rough idea but couldn’t be certain so for several months SPMRs were in the dark as to their future.

Now you have to remember that NT was a cost cutting exercise.  In order to justify the £1.35 Billion POL had to show that the overall effect would be a reduction in payments made to SPMRs.  The 3000 ‘chosen ones’ selected for Mains would lose their monthly fixed Core Tier Payment in return for higher transaction related pay (TRPs).  Let us suppose, in a very conservative fashion, that POL decided that for the Mains at least the overall effect of the move to TRP only pay would be cost neutral.  That is for the 3000, what they received before is what they would get after.  All well and good you might say but not quite.   This was to be a voluntary program after all and a voluntary program can only work with willing volunteers.

Which brings me to another list.  This was the list of enhanced TRPs that the new Mains would receive.   It was extremely confidential.  No one knew what was on it although some examples were leaked by POL as a ‘little teaser’… Really?  So why did they not want the prospective mains post offices to know the numbers?   Well fairly obvious really.  If the nett effect was to be cost neutral then out of the 3000 selected offices there had to be a mixture of winners and losers.   Clearly the losers weren’t going to convert in a hurry but the winners would be trying to get on board as soon as possible.   Most importantly though POL needed the NFSP to convince their members that NT was the way to go, that there was no plan B, that their investments would be lost without it.   Trying to convince an SPMR that the way forward is for their neighbouring Post Office to make more money while you make less wasn’t going to hold water.   With hindsight of course the NFSP at least got two parts of their forecast right.  There is no plan B (currently) and most remaining SPMRs have lost a significant part of their investments if not all.

Back to the mysterious TRP list.  I got my hands on a copy and at an appropriate moment in reply to a post on the NFSP forum from an Executive Council member I published the list in full.   George Thomson was outraged.  He didn’t just delete the post, he shut the whole forum down as it was becoming increasingly obvious that the ‘scaremongerers’ as we were labelled had rumbled what was going on and what was going to happen.   Not many got to see a copy of those TRPs but those that did reported mixed fortunes.  Some were going to make a lot more as a Main while others stood to lose a lot and clearly were not going to engage with NT voluntarily.

This action by Thomson is a clear indication in my opinion that he knew what the problem with NT was – he must have been told by POL because I don’t think he is capable of working out these things himself – and that if the TRPs were leaked on a grand scale he would never be able to convince his members to back it.

So NT got going and Lo and Behold the very first offices to convert to Mains were ones that were going to make more money.   You should be aware that as part of the ‘selling’ of NT, Field Change Advisors (who had no idea how to run a Post Office) showed the prospect what he would earn after NT based using the new TRPs.    This practice was dropped later and instead prospects were advised of the increase in sales due to additional footfall as well as cost efficiencies of having a Horizon terminal at their retail counter.

Initial converts were happy and of course were eager to tell everyone what a success their transformation was.  POL were exuberant.  They were spending lots of the £1.35b, they were converting their target Post Offices – not quite on schedule but close enough to convince the Civil Servants that they were doing a grand job – and the payment to SPMRs was increasing!

Now several years later and without going into detail NT has failed completely.  The effect on SPMR commission has in fact been cost neutral for the Mains and no great savings have been made.   Now POL’s only alternative (a plan B?) is to reduce the TRPs considerably and they are going to find great difficulty in doing that unopposed.    The breaking strain has been reached already with offices just closing their doors as a result of the poor compensation for difficult and tiresome interaction with the bureaucratic nonsense of POL.   This remains a problem that POL don’t understand but which was pointed out repeatedly at the onset of NT.  When a new style PO gets shown the door by an operator which local businessman in their right minds is going to take it on without finding out why it was thrown out in the first place?

So if you are interested in talking to your MP about this, show them this blog.  Ask them to ask the Business Secretary why those TRPs were not published initially.  Why was the NFSP forum closed down when they were published on there?  What wasn’t the list of prospective Mains Offices not revealed in Freedom of Information requests?   How much money did they say they would save and how much have they?   Get them to ask who POL are accountable to although I know the answer – nobody.



4 thoughts on “Post Office Network Transformation – Wrong from the start…

  1. My own questions would include,

    1 why did politicians allow POL to effectively bribe selected offices with enhanced payments?

    2 in what world is it either rational or logical to expect Local offices to offer services for 60% more opening hours, whilst simultaneously reducing incomes by 50%+?? Sustainable??

    3 the absence of any linkage between transaction rates and increasing costs (particularly the NLW) means that those remaining Locals are being undermined on a month by month basis as transaction rates AND volumes decrease. Sustainable???

    4 POL appear (to be generous) to have no idea or strategy to address the long term decline in transactions, and in the event that the banks dump their closed branch transactions on POs, you can bet a £ to a pinch of snuff that those transaction rates will reflect either the cost of the savings those banks make or the actual cost of doing the work .Sustainable????

    5 When NT was launched, we were told individually and collectively that our income would be based on transactions, and yet we still have a raft of work for which we receive no pay at all. Every Certificate of Posting, every Bank account balance enquiry takes time, but generates no income, likewise all the end of day/month balancing is unpaid. And these unpaid elements make up a sizeable chunk of time on a monthly basis. Unsustainable

    6 Based on my last pay slip, at NLW rates, I am being paid the equivalent of 30 hours work, yet being expected to be open 70. Perhaps the way forward is for SPMRs to adjust our opening hours every month to reflect our falling salaries. Perhaps based with the embarrassment of 6-7000 Post Offices routinely reducing their hours, POL/HMG may finally be forced to make PO work pay


    • Almost very month I find errors in my pay report, which are of course to the sole advantage of POL.
      I worry that these errors are occurring across the whole of the network, but not necessarily being corrected across the whole, merely for the ones who, like me, have reported the mistakes.
      The pay system is so complex it is unmanageable.
      With this in mind, there is little wonder that POL were and still are, unable, not just unwilling, to provide accurate information.

      As for NT itself, it has always appeared, that POL had only a vague idea of exactly what they proposed to do, other than reduce costs. The whole programme has seemed to be managed on a “flying by the seat of their pants” basis.

      A prime example, is the compensation for leaving.
      Many larger offices, like myself, who would have left, were unable to do so because of the huge taxation consequences, of the compensation being treated as redundancy.

      If, as is actually the case, it had been treated as a buyout, then it would have come under capital gains rules and been far less onerous. The major obstacle to that, was always the “employed” status of SPM’s, which ironically, has now been removed by NT.
      Thus, any future closure programme could now be instigated without any compensation being paid to SPMs, because they are no longer “office holders”
      So, was that the real intention all along, or not?

      john f


  2. Hi John

    The taxation issue is not a closed case. It is up to the individual to treat the payment received from POL as they see fit. It is not for POL to tell you how to treat it. I am treating it as a ‘buyout’ and no doubt in due course I will be hauled before a tribunal to argue my case. I think I will win. There was certainly an intention in the new contracts to close once and for all any argument and/or discussion about the employment status of Operators/SPMRs yet they didn’t even get that right. In another area of Tax Law HMRC came down heavily a year or so against ‘contractors’ who use sham contracts in order to avoid PAYE and NIC. That works both ways and I believe there is sufficient evidence to suggest that the original SPMR contract from the 60s was a sham from the start in order for POL to avoid paying employee benefits. It will all come out in the wash one day. Cheers, Tim


    • As even the revised contract seeks to dictate operating hours, performance guarantees, no offer of potential competitor products etc etc, if the bike courier/Hermes case comes to anything, hard to see how POL avoid the same penalties on remuneration levels and status


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