Memorandum submitted by Postwatch
(I) NETWORK
CHANGE PROGRAMME
OVERVIEW, AS
AT THE
END OF
MAY
By the end of May, Post Office Ltd (POL) had
proposed (that is, these figures include plans in public consultation
as well as those where final decisions have been made) 1439 closures
and 346 outreaches.
Below is an update on completed area plans—those
for which POL had announced final decisions.
POL had announced decisions for 21 area plans.
Key points on these plans:
— They involved 1085 closure proposals
in 343 parliamentary constituencies.
— POL proposed a further 163 branches
for closure and replacement with outreach solutions.
— Following Postwatch feedback, POL
withdrew 112 proposals during pre-consultation periods.
— Following public consultation, POL
withdrew 41 proposals and changed one proposed closure to a proposed
outreach, and one proposed outreach to a closure.
— POL consulted on 23 replacement branches
following these withdrawals. One replacement branch has been withdrawn.
— Postwatch agrees with POL that the
proposed remaining network would continue to meet the access criteria
set by the Government.
— 37 proposals reached Stage 2 of the
review process, 23 of which were escalated to the Stage 3. One
of these then went to Stage 4—review by the Chairman of
Royal Mail.
(II) MYSTERY
SHOPPING RESEARCH
RE -EXAMINING
SERVICE PROVIDED
BY POL'S HELPLINE
Summary
In November 2007, Postwatch undertook in-house
mystery shopping telephone research to assess the utility and
quality of advice received by customers using POL's 08457 22 33
44 number. This followed customer feedback that the helpline was
on occasion giving out incorrect, misleading and inconsistent
information.
POL agreed to a number of improvements following
this research. We therefore repeated the research in April 2008,
to assess whether the promised improvements have been made.
Results of the November 2007 research
Following the November 2007 research, we identified
several areas for improvements to the helpline. In response to
our concerns, POL agreed to the following actions:
1. IVR telephone system: The research highlighted
that it was confusing for customers to speak to an operator about
the closure programme. The route to speak to an operator took
three steps, and customers had to select the final option on each
menu screen, before selecting a generic option for "all other
enquiries".
POL agreed to make changes to this. Callers
now press option three for "PO services', rather than option
six as previously happened. Customers are then presented with
a further option, which refers to "other enquiries, including
changes to the branch network".
2. Address details: There were inconsistencies
in the addresses given to callers asking where to send their consultation
responses. Callers should have been given freepost addresses but
several other addresses were also given.
Post Office Limited agreed to advise call centre
staff that freepost addresses would be given out for enquiries,
"Freepost Network Change", and for consultation responses,
"Freepost consultation Team".
3. E-mail address details: In the last exercise
callers reported being given a series of email addresses to send
their responses to. We called for a single email address to deal
with the closure programme.
Post Office Limited said it would continue to
maintain two email addresses—one for general programme enquiries,
and another for consultation responses- but that it would inform
staff that only these email addresses should be given.
4. Varying levels of knowledge: Callers put
through to POL's call centre in Wales expressed particular concern
about the quality of information provided, and noted varying levels
of knowledge among call centre staff.
Post Office Limited's response did not commit
to any specific actions, but noted that POL was developing their
own call centre mystery shop surveys.
Results and recommendations from the April to
May 2008 research
It is disappointing to report that POL has largely
failed to deliver the promised improvements to the helpline. While
the IVR changes have been made, particular problems remain in
terms of providing customers with accurate information about PO
closures, correspondence and e-mail addresses.
These concerns are set out below:
1. IVR and time taken to be put through to operator:
POL has implemented the promised changes to the IVR, and the effect
is that the helpline is now easier to navigate. However, several
callers expressed concern about the time taken for calls to be
answered—three callers experienced lengthy delays of over
five minutes. One of these people had to hold on for twelve minutes.
Phone charges are payable at the local rate, and callers should
therefore be put through to an operator with minimal delay.
Recommendation: We are pleased that POL
has made changes to the IVR as they agreed. However, we request
that POL monitor the length of time customers wait to speak to
an adviser, and seek assurances that staffing levels are sufficient
during periods of peak demand.
2. Address details: The last exercise revealed
that a number of addresses were erroneously being given to callers,
and on five occasions callers were given the address for the mail
centre in Watford, which is not a freepost address.
POL assured us it would make clear to call centre
staff that they should use only the correct Freepost address—for
enquiries, "Freepost Network Change", and for consultation
responses, "Freepost Consultation Team". However, call
centre staff gave out incorrect address information in around
10% of the sample calls. This was in fact higher than recorded
in the previous survey, though since the samples were small, it
is not possible to conclude that service has deteriorated as a
whole.
Examples of incorrectly provided addresses are:
Customer Care, Post Office Limited, Freepost,
P O Box 740, Barnsley S73 0ZJ.
Post Office Limited Customer Care Unit, Freepost,
NWW 15329, Bangor LL57 1AA.
Post Office Limited Customer Care, PO Box 747,
Brampton S73 0UF.
National Consultation Team, P O Box 2060, Watford
WD18 8ZW.
Network Change Programme Office, Post Office
Limited Ltd, Freepost, Network Change.
Network Reinvention, FREEPOST.
Recommendation: We write to POL setting
out our concern that the quality of information provided by the
call centre has not improved. Postwatch requests that call handlers
are promptly re-trained to provide the correct address.
3. Email address: Following the last research,
POL assured us that only two e-mail addresses would be offered:
network.change@postoffice.co.uk for general concerns, and consultation@postoffice.co.uk
for specific responses.
However, some callers are still being told to
use networkchange@postoffice.co.uk. This e-mail account does not
exist and so bounces back. Callers were also given the general
email address, despite asking to submit a view about a particular
branch, in around 10% of calls. This suggests call centre staff
find the current approach of providing two e-mails confusing.
Recommendation: We write to POL to set
out our concerns that incorrect e-mail addresses are still being
provided. In light of our continuing concerns, unless POL can
satisfy us that call handlers will now provide the correct e-mail
address, we should insist that only one e-mail address is used;
consultation@postoffice.co.uk is easiest to give over the phone.
In the interim, POL should register variations
on the networkchange@postoffice.co.uk address to capture responses
which for whatever reason are sent erroneously to this address.
4. Varying levels of knowledge: In a number
of cases, call handlers incorrectly informed callers about the
status of PO branches. We found that there were also differences
between the ability of call centre staff to deal with callers'
concerns. One of our callers was told a post office in Eastbourne
was not closing, while another was told that post office in Nacton
in Suffolk was not closing. The information in both cases was
wrong. A caller was also told there were no closures in Kings
Lynn, where one PO is proposed to close.
We did not find evidence that the consistency
of information provided varied between call centres.
5. Response from POL to Postwatch research.
POL's own independent research contradicts some
of our findings but POL does accept that there is room for improvement.
POL has agreed to conduct further training to address the problems
that Postwatch found and to commission independent research in
to the service provided.
Methodology
For this research, between 21 April and 2 May,
Postwatch staff made 168 calls to the Post Office Limited customer
service centre. Committee members were asked to make calls based
on one of four scenarios, three of which were drawn from the previous
exercise.
The breakdown of calls was as follows:
— Scenario three—46 calls.
— Scenario four—46 calls.
One call was made outside office hours and the
Postwatch caller was unable to speak to a customer service adviser.
The scenarios were:
1. Tell the customer service representative
that you are concerned about a particular closure and that you
would like to record your views. Ask how you should go about this.
2. Place a call asking if any branches are
being considered for closure in a particular town, village or
city. The area chosen will need to be one in public consultation.
3. Ask the adviser about a branch closure
in an area plan on which the decision has been made.
4. Inform the adviser you are unhappy with
the whole programme. Say that you think no post offices should
be closed. Ask who would be the best person to deal with your
objections and where you might go to get more information.
(III) POCA II—IMPACT
ON POST
OFFICE NETWORK
About the current product
— The Post Office Card Account (POCA)
is a basic account that can be used to receive benefits, state
pensions and tax credit payments over the post office counter.
— It has over four million users.
— The current product ends in 2010
and will be replaced by a new product with improved functionality
Tender for the new Government Card Account
— In line with European Union procurement
rules, an invitation went out to competitive tender. A decision
regarding the successor to POCA is expected soon.
— PayPoint has submitted a bid for
the successor product. The Government tender requires a minimum
of 10,000 outlets—PayPoint has in excess of 19,000:
— Although the invitation to tender
does not stipulate any minimum distance criteria for access to
the new product, Post Office Ltd has stronger rural network coverage
than PayPoint. However PayPoint recently announced that they are
"99% of the way" to having an outlet within a mile of
each urban area where people live and work, and five miles of
each rural area.
— PayPoint's coverage in deprived
areas is much denser than Post Office Ltd's and its retail partners
are often willing to trade for longer hours.
— Postwatch recognise that payment
into bank accounts is the most suitable option for the majority
of people. However, the fact that there are more than four million
POCA holders underlines both the importance of the product and
the popularity of collecting benefits at post offices.
— Postwatch has a responsibility to
monitor the number and location of post offices. We therefore
recognise the importance of the POCA (and its successor) to the
viability of the post office network.
Impact on the Post Office Network should POL lose
the contract
— If Post Office Ltd were to lose the
POCA contract, it would have a substantial negative impact on
its network, as the card account generates substantial business
for post offices. Postwatch believes the retention of the POCA
contract by POL is a vital element of the sustainability of the
network at its post-closure programme size.
— The National Federation of SubPostmasters
(NFSP) commissioned research in 2006 which showed that on average,
10% of subpostmasters' income was directly derived through POCA
transactions (12% in urban deprived post offices).
— Post Office Ltd say that 6.5 million
customer visits to post offices each week are made in order to
carry out POCA transactions; and that £2 billion of money
paid out through POCA each year is estimated to be spent in post
offices' retail business.
— The NFSP claim that with many sub
post offices already operating on the edge of viability, the loss
of the income and footfall generated through POCA would lead directly
to the remaining network unraveling, with thousands of further
unplanned post office closures.
How can the new product improve on the functionality
of the old POCA?
— It is imperative that the development
of the successor product fully takes customers" needs into
account.
— The current POCA product has very
limited functionality. Users cannot set up direct debits on the
card, meaning they face the additional charges levied on customers
of utility services opting to pay by cheque or cash.
— The invitation to tender stipulates
that the new product must "provide customer access to cash
at ATMs and personal teller outlets located throughout the UK".
This is an additional benefit for customers but also poses problems
for the post office network, as it will affect the footfall of
post offices.
— Many organisations and individuals
would like to see the reformed POCA given greater functionality.
Stakeholders" suggestions for improvement include:
— the new product should offer
a range of ways to access, deposit and keep track of money and
also give people the opportunity to progress to more complex account
features once they have built up confidence in banking;
— the new product should provide
interest on balances, an option for chip and pin, a bill payment
facility and a deposit facility; and
— increased flexibility over the
documentation required to open an account (low income individuals
are less likely to possess passports and driving licences).
(IV) POSTWATCH
EVIDENCE TO
THE INDEPENDENT
REVIEW OF
THE POSTAL
MARKET (SECTION
ON POST
OFFICE DEMERGER)
(This is simply an extract from Postwatch's
written submission to the Independent Review).
What further measures would be necessary to enable
the changes listed in your response to Q42? In particular: (a)
Should Royal Mail and Post Office Ltd continue to form part of
the same group?
Access to postal services Postwatch's primary
interest is in ensuring that consumers have access to postal services.
At present Royal Mail's products and services are generally available
at all post offices. If POL ceased to be part of the Royal Mail
Group, it is likely that a newly separated Royal Mail would seek
to review this arrangement and restrict availability to a more
optimal network of sales and collection points. Indeed, Adam Crozier
has in the past said that Royal Mail could meet its licence access
criteria with as few as 4,000 post offices. There must therefore
be a real risk that a demerged POL would result in the withdrawal
of certain Royal Mail products and services from a significant
number of post offices.
This would be detrimental to postal consumers
and could result in further branch closures. Postcomm could take
steps to mitigate such a risk, for example, by placing a long-term
regulatory obligation on Royal Mail as the USO provider to ensure
reasonable access to USO products. However, even with such an
obligation, we still believe that there would be some diminution
in the current levels of access. Opening up the PO network to
other postal operators would be beneficial to consumers if it
provided real choice at the retail level. Whilst such arrangements
might be easier to negotiate if other providers were able to deal
directly with a demerged POL, Postwatch understands that this
may be an area where Postcomm currently has powers to intervene
and make a direction if other providers are unable to negotiate
a fair arrangement with Royal Mail wholesale, although it has
not been tested. It should not require the demerger of POL to
achieve this objective.
The contract for services between Royal Mail
and POL Postcomm's network report in October 2007 noted that postal
services make up approximately 26% of POL's business. In the year
ending March 2007 Royal Mail paid POL £348m for providing
these services. It is unclear how the amount paid by Royal Mail
to POL for this business is calculated and whether it is cost
reflective but we welcome the clarity that Postcomm is trying
to bring to this area and support the aim of having a clear and
transparent contract with a payment that properly reflects the
work for Royal Mail carried out by POL.
Ownership of POL
It is unclear who would assume ownership of
a demerged POL. It would not obviously be a commercial prospect
and if retained in the public sector there is a risk that without
proper support and direction POL could be in a worse position
than now. POL's current management is implementing a five-year
plan to return the company to profitability. Whether this is successful
or not would appear to be more to do with the quality of the management
team and its plan rather than ownership of the company.
Social value of the network
The current network subsidy payment of £150
million a year runs until 2011. It is possible that a demerged
POL could identify other services with a social value to deliver
through the network. If that happened, the Government could demonstrably
secure better value for its subsidy thus increasing the likelihood
of extending it beyond 2011.
6 June 2008
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