Examination of Witnesses (Questions 160-167)
MR ALAN
COOK CBE, MS
PAULA VENNELLS
AND MR
HOWARD WEBBER
10 JUNE 2008
Q160 Mr Clapham: Mr Cook, is the
financial support for outreach services adequate?
Mr Cook: That we provide to sub-postmasters?
Q161 Mr Clapham: Yes.
Mr Cook: Yes, I think it is. We
pay the sub-postmaster the additional monies and they are then
responsible for finding and locating the premises or whatever.
What is happening in practice when they are being set up is we
are out in the field doing it with them. We have negotiated those
terms with the Federation of Sub-postmasters and reached agreement
with them on them. I think we are comfortable that they should
be viable. The whole point of doing this is to provide as much
of a Post Office as we can at as low as possible a cost. We will
make these fine tunings like Paula and Howard have just discussed.
Q162 Mr Clapham: Would you agree
that it is important we do get the right model because if the
wrong model is used it could cause problems?
Mr Cook: Correct. All the while
the whole way the Post Office works is if I make it too tough
for a sub-postmaster they will not want to do it. It has to be
commercially attractive for them. If you are a core sub-postmaster
or we would like you to be one, it needs to be an attractive prospect
to run four outreaches. If it is not an attractive prospect we
will not get them to do it and that is when you hit difficulties.
That is why the whole entrepreneurial bit is important, because
the more profitable we can make post offices for sub-postmasters
the easier it will be to maintain the network.
Q163 Chairman: A core sub-postmaster
has an arrangement with you, but you have no oversight in the
relationship with those who operate the partner outreach services
on behalf of the core sub-postmaster. We are told that terms can
vary very widely across that, which might mean some outreaches
are very popular to operate and others become unpopular.
Mr Cook: By terms you mean what
the individual is paid?
Q164 Chairman: This is what a sub-postmaster
has written to us, "Perversely, POL does not involve itself
in partners' payment terms. That is subject to individual negotiation
with the core sub-postmaster, which means payments will vary across
outreaches for the same work and are open to abuse. While some
core sub-postmasters offer fair deals, others may not. The finance
package is not transparent nor has POL considered there to be
any need to ensure that partners get reasonable recompense for
the work, responsibility and security of the money and mails that
they are handling."
Mr Cook: This is a general point
across the whole network. There are post offices in Tescos, in
WH Smiths, in Co-ops or whatever. We pay those organisations for
the transactions they perform for us and they hire staff to do
the work. We do not stand back; we actually go in and train those
staff. If it is a sub-postmaster, we interview the sub-postmaster
to make sure that they are capable of running the business and
we exercise a high degree of quality control, mystery shopping
and all that sort of stuff to make sure that it works properly.
It is their own business and they have to decide the labour rates
in their area or whatever.
Q165 Chairman: Will similar scaled
down arrangements apply to outreaches?
Mr Cook: Yes, effectively so.
Our relationship is with the core sub-postmaster. We have enough
quality checks in place to make sure that they are not paying
such poor rates that they are employing people that cannot really
do the work.
Q166 Chairman: The question of weights
of packages is a matter to which this Committee will return if
Postwatch is not satisfied. We talk a lot about post offices for
individuals, the access to cash for people in deprived areas,
but for businesses in remoter areas the package service is really
very important indeed. I think it is a matter we will look to
be guided by Postwatch on. You are taking all these decisions
yourselves, the Post Office is doing it. The Government has stood
back and said, "We cannot get it on with this micromanagement.
It is all too difficult for us. We may own it but we are not going
to do this. We'll leave it." The ultimate arbiter is Allan
Leighton . He has had one tier four appeal so far. Deciding one
is easy enough. You can be magnanimous with one, but it is a different
matter if you have got 10 or a dozen. Do you think it is really
right that someone with a vested interest in driving down the
costs—you have told us that Royal Mail is not paying enough
to meet your costs at present—is the final arbiter, the
final court of appeal, Allan Leighton, the Chairman of the Royal
Mail Group? Do you think that is democratically reasonable?
Mr Cook: The review process we
have got is pretty robust. I will not repeat the numbers because
Howard gave them earlier. Originally the final arbiter was going
to be a meeting between either Paula and myself and Millie, the
Chair of Postwatch. The Government then specifically requested
a fourth tier review. The way that we designed the review process
is that we should be able to sort all of our differences out by
Level 3 and they are typically being solved by Level 3 with the
one exception. I do know that Allan takes the responsibility very
seriously and he was pleased to be asked to do it and I think
he did so by overturning the closure decision. As to the appropriateness,
it is really for Government to answer. I think we have a robust
enough process that we are not going to get many of them in reality.
Q167 Chairman: So far we have only
had one go to tier 4. We are going to have one double jeopardy
post office and that is Walcot village in Shropshire which has
gone through two review processes separately. We have only had
one each of these so far. Are you happy with that aspect of it,
Mr Webber?
Mr Webber: It is a Government
decision. It has worked okay so far. As Alan has said, the original
design was such that we could resolve everything by Stage 3 at
the latest, which is probably one reason why there have been so
few of these, just the one that has gone to Stage 4. I would not
measure the success of the process by the number that go to Stage
4. It may be there will be more later on in the programme and
if there are not it will be because we are satisfied with Stage
3, which is fine. I am sure that Post Office Ltd do not particularly
wish to trouble Allan Leighton unnecessarily if they can resolve
matters at a lower level.
Chairman: We are grateful to you for
your time and your willingness to come before this Committee.
These are important matters for our constituents. Thank you very
much indeed.
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