Examination of Witnesses (Questions 40-59)
ENERGYWATCH AND
POSTWATCH
19 JANUARY 2005
Q40 Mr Jenkins: So you feel satisfied
you have sufficient power, authority, to deal with the Post Office.
Mr McGregor: No, we do not. We
would hope, indeed learning from the experience of the urban reinvention
programme, that should there need to be a further look at a rationalisation
of the post office network, we will be given a much greater influencing
role and that either ourselves or some other public body should
be given the right to veto closures of particular branches, or
at least to ensure that there is the continued provision of a
post office service within a particular locality.
Q41 Mr Jenkins: The Chairman did mention
the delivery side of Royal Mail. I do not know whether other colleagues
have the same experiences in their constituency that I have, but
at one time I used to have a very effective post office and a
very, very good post person walking around at half past eight
in the morning delivering. Over recent months, the delivery is
taking up to maybe half past five in the afternoon, it looks as
though we have temporary workers drafted in from some temp agency,
they spend up to seven hours sorting and seven hours delivering
to start with and they are shifting people around. In fact, the
service went down so rapidly, it was hard to believe. If it had
been an ordinary company, the shareholders would have lost substantially,
the directors would have taken a very handsome payoff in redundancy
pay and enhanced pension and it would have been put in liquidation.
Having seen this, having seen that once again you do have not
have the power, the authority to do anything about it, what do
you suggest?
Mr McGregor: The Royal Mail Group
has had, it is fair to say, a chequered history over the past
three to four years. When the group transferred from being a nationalised
industry into a public limited company, one of the consequences
of that was that the group went into making major losses. Three
years ago it was losing money of the order of over a billion pounds
a year. Clearly losses on that scale are not sustainable in the
long term.
Q42 Mr Jenkins: That is the Post Office's
problem. I am asking you what you can do about it.
Mr McGregor: What we did about
it was that we recognised that there was a need for the Royal
Mail Group to modernise, to modernise its outdated working practices
and to modernise its services. So there have been some benefits
to that, and yes, there have been some drawbacks. You refer to
the changing pattern of deliveries. We thought that was a necessary
part of the modernisation programme, we thought that it was not
implemented effectively or sensitively by the Royal Mail management,
but we do believe that the changes that have come about will be
in the longer-term interest of customers because it will result
in a sustainable business.
Mr Jenkins: May I just say that it sounds
as though you are part of the problem rather than the solution.
You are supporting the Post Office.
Q43 Mr Davidson: I wonder whether I could
pick up paragraph 1.18 about Energywatch's priorities first of
all; this is the point which has already been mentioned about
your workload being driven by your correspondence. I wonder whether
I could pursue this. Have you done any research to identify, for
example, the postcodes of those who have written to you and correlated
that with the areas of poverty?
Mr Asher: Yes, we have. In a recent
project where we were concerned about the number of consumers
who were disconnected, we were able to use some computer software
to track, by postcode, which consumers came from high areas of
deprivation and we found that it was overwhelmingly the case that
consumers who were likely to be disconnected also come from areas
of high deprivation with young children, high levels of poverty
and people living with disabilities. We were able to use that
information very powerfully to have the industry change its code
of practice for disconnections quite radically. We think that
is a very powerful tool.
Q44 Mr Davidson: In terms of the general
mail that you are getting in though, are there other issues that
are more prevalent in areas of deprivation?
Mr Asher: Yes. I think the point
that NAO made was that, by just relying on complaints, it might
be that we were missing out on many genuine concerns of people
who do not have voices and we have taken that quite seriously.
Each of our officers, in addition to answering complaints, is
responsible for going out into the community to work with welfare
agencies, with MPs and others, and over the last year alone, we
have made 800 such visits and we have been collecting a wide range
of information. What we have learned is that consumers, or very
specially disadvantaged consumers, are very interested in hearing
more about the priority service register, whereby ageing people
can be given bills in plainer language, in larger type to get
special controls to operate their appliances and things like that.
There is a whole set of information.
Q45 Mr Davidson: Had the National Audit
Office not come along and pointed you in that direction, would
you have discovered this route yourselves?
Mr Asher: We were doing some of
it, but the truth is that the NAO has given us a real boost in
that area.
Q46 Mr Davidson: Why do you think you
did not think of this yourselves then? It is clearly part of government
policy in terms of trying to direct resources at those in greatest
need.
Mr Asher: Yes.
Q47 Mr Davidson: Why did an agency like
yourselves not have this thought brought to your attention by
the supervising department or not be sufficiently tuned to government
policy to pick it up yourselves?
Mr Asher: There are two clear
factors: one is a timing one. Energywatch had only been established
two or three years. Prior to that we were in the process of moving,
from having 22 offices which were being closed down and opening
up a new set.
Q48 Mr Davidson: So paying attention
to, as it were, government policy on combating poverty was an
add-on that could be dealt with later. Surely it should have been
designed in right from the very beginning.
Mr Asher: It was designed from
the very beginning, but a consequence of doing that and starting
from a very, very high number of complaints—in those years
we were receiving something like 125,000 complaints a year and
we have a statutory obligation to deal with every complaint—is
that there is a point at which you simply cannot do more. We did
start to do that a couple of years ago and we have accelerated
that in recent years.
Q49 Mr Davidson: Okay, the same issues
to Mr McGregor. In terms of complaints you receive, you presumably
have access to postcodes and have you correlated where they are
coming from with areas of poverty?
Mr McGregor: The issues of poverty
are different in the postal market from those in the energy market.
Q50 Mr Davidson: Is that a no then, is
it?
Mr McGregor: It is no, but if
I may explain—
Q51 Mr Davidson: No, I just want to be
clear whether or not you had correlated the number of complaints
you had received with areas of poverty and you are saying no,
you had not.
Mr McGregor: No, we have not.
Q52 Mr Davidson: Again the same point.
It is clearly part of government policy to locate areas of difficulty
and deprivation and to see how policies, in a joined-up fashion,
can be adapted to accommodate those. Why was that not either brought
to your attention by the supervising department or why did it
not occur to you?
Mr McGregor: As has already been
noticed, the expenditure on postal services amongst social customers
is comparatively very small compared to the energy bills.
Q53 Mr Davidson: So that is okay then,
is it?
Mr McGregor: It is of the order
of £25 to £26 per year for the average family.
Q54 Mr Davidson: I am fascinated by this
defence. By the very nature of poverty, people are spending less
money on every service where they have to pay for it. By that
argument, presumably they would always come at the end of the
queue if you are simply looking at volume. The whole point surely
of government policy is that there is a focus, a disproportionate
focus, upon those who are in greatest need and for whom the cost
of postage will be a higher percentage of their available income,
even for a single postage stamp.
Mr McGregor: Yes, that is right,
but we do not think that the geographical pattern is necessarily
a good guide for dealing with that particular problem.
Q55 Mr Davidson: How do you know, because
you did not correlate?
Mr McGregor: The problem that
we have identified so far is very much about disadvantaged and
poor customers having access to postal services and also, particularly,
access to post offices. That we have looked at very carefully
and on a postcode and geographical basis when considering post
office closures. Particularly when it comes to urban deprived
areas, we have been particularly concerned to make sure that there
are no, as it were, wrong or improper closures that are going
to disadvantage the poorer customers in urban deprived areas.
Q56 Mr Davidson: I hear from my colleagues
constantly that their post offices in deprived areas are closing
nonetheless. You quoted some figures earlier on about where you
had been involved in campaigns to save post offices, and I was
not clear to what extent the closures which had been avoided were
as a result of your activities and to what extent they had been
avoided as a result of other activities that were also taking
place and to which you might have added something. How do you
separate out in those circumstances your input from the input
of everyone else who was involved?
Mr McGregor: Obviously the consultative
process is a kind of co-operative consultative process where,
as was the case with Mr Jenkins, local MPs and local councillors
are involved. Then it is indeed difficult for us to say what proportion
was just our influence and what proportion was the influence of
others.
Q57 Mr Davidson: That is why I am asking
that.
Mr McGregor: Where we have been
leading on campaigns to keep particular offices open we have caused
about 200 offices to be withdrawn from the process altogether.
Q58 Mr Davidson: I do not want to hear
that because that is going over the stuff that I heard before
and I am not sure it is helping me much. May I just clarify something
with Mr Asher? You mentioned the question of the website that
you have—and substantial numbers of people in my area, for
example, would not have access to websites—and this question
of the call centre. Again, they would not necessarily have access
to the information which would send them in the direction of the
call centre. How are you managing to make people in greatest need
aware of what you can provide to them?
Mr Asher: We have several ways.
In addition to the website and the call centre, each utility bill
carries our telephone number and that is the main source of contact.
Q59 Mr Davidson: Have you followed up
who is then calling you as the result of that and to what extent
they are disproportionately from areas of deprivation, where presumably,
as Mr Field indicated earlier, the need for your service is greatest?
Mr Asher: It is an under-representation
and we have just started a fairly major research project to work
with advisors in disadvantaged communities to see how we can more
effectively make ourselves known. One small way, if I could give
an example, is that we are about to launch in a week or so, a
programme for the elderly to be listed on this priority services
register. We will be sending out, to every radio station in the
Great Britain—
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