A new transformation plan for the Post Office has been unveiled by chair Nigel Railton which could see its wholly-owned sites close in favour of franchise agreements as it looks to build a “new relationship with subpostmasters”.
The five-year ‘New Deal for Postmasters’ follows a strategic review initiated by Railton in May. The Transformation Plan sets out an ambition to deliver £250m boost to postmasters’ income by 2030, subject to funding discussions with the government.
In a speech delivered to postmasters and Post Office staff, he outlined the commercial, operational, cultural, and reputational challenges that must be addressed to deliver change for postmasters and learn the lessons from the Horizon IT public Inquiry.
“The Post Office has a 360-year history of public service and today we want to secure that service for the future by learning from past mistakes and moving forward for the benefit of all postmasters. We can, and will, restore pride in working for a business with a legacy of service, rather than one of scandal.
“The value postmasters deliver in their communities must be reflected in their pockets, and this Transformation Plan provides a route to adding more than £250 million annually to total postmaster remuneration by 2030, subject to government funding.
The Transformation Plan included proposals to:
- Strengthen postmasters’ commercial offer to their customers, particularly in banking, and to work with the Government, banks, LINK and Cash Access UK to accelerate the roll out of banking hubs.
- Deliver a lower-risk, better-value new branch IT system for postmasters gradually.
- Major investment in the automation of cash and mails services in-branch to reduce postmasters’ cost-to-serve in their branches and to give customers the experience that they have come to expect from modern retailers.
- Create a new operating model for the business in which a streamlined central organisation acts as a support function for postmasters, offering expert support in marketing, training, and technology to postmasters.
Part of the plan included a review about “loss-making” parts of the network which included the owned branches.
“As part of our ambition to strengthen the network, we also need to have an honest conversation about the loss-making parts of our network and our Directly Managed Branches, while still meeting the current requirement for 11,500 branches.”
Commenting on the plan, Post Office Acting CEO Neil Brocklehurst said: “This Transformation Plan is the first step in a five-year journey that will set up the Post Office for years to come. There are many consumers who primarily shop online, but there also many who struggle to use online services or actively choose to shop on their local high street and who want to be served by a human being. Postmasters across the UK serve every generation and this plan not only improves their incomes but also the support that we provide to let them run their businesses and serve their communities.”
National Federation of SubPostmasters CEO Calum Greenhow said: “What Mr Railton said in relation to the business needing a fresh start is so important given the toxic history. In 2019, PO Chief Executive Nick Read stated that he wanted to “reset the relationship with postmasters”. Sadly, we know that was not achieved. As Mr Railton talks about “reversing the polarity”, postmasters stand ready to support the new Chair in helping him and his team to achieve this. However, we will also be quick to highlight if he and his team do not deliver on their commitments.
“As postmasters ourselves, improving our remuneration is something that the NFSP has continually fought for on behalf of our fellow postmaster colleagues. Therefore, it is beyond encouraging that the plan aims to deliver around £250m in additional revenue by 2030 and around £125m by the end of the next financial year.
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