EDITORIAL: Why Post Office reforms fail to deliver the goods

After seven years of pass the parcel over the future of the Post Office, the Labour government this week gave us its vision of where it wants the 300-year-old service to go. Unfortunately that vision is somewhat short-sighted.

After seven years of pass the parcel over the future of the Post

Office, the Labour government this week gave us its vision of where it

wants the 300-year-old service to go. Unfortunately that vision is

somewhat short-sighted.

The government knows that like all of the public service structures,

from the BBC to the NHS, reform and modernisation are needed to ensure a

place in the next millennium. The difficulty for Peter Mandelson, trade

and industry secretary, is reconciling this crucial need for change with

political opposition to the idea of privatisation.

The proposals put forward have all the signs of a fudge which ultimately

postpones the decision-making process about the future of the UK’s

postal service.

There are certainly some positive measures in the review. The Post

Office will be given greater commercial freedom in its business

dealings, including allowing joint ventures of more than pounds 20m. It

will be encouraged to look on itself as a media owner, with use of its

distribution network and brand to raise revenue. It may also be able to

compete in other international markets, although this has yet to be


The marketing power of the Post Office is already well established, and

some of the proposed changes could be good news for marketers. If it

moved into direct mail print and production it could significantly drive

down costs for users.

Through its postmen it has the only national distribution network in

daily contact with the population. Postmen could pick up items as well

as deliver them.

Post Offices already form the largest retail chain in the country; it is

a network that could be developed. Clients want cheaper and more

accurate mailings delivered on time and on target, and certainly

allowing the Post Office more commercial freedom will help deliver this.

But that is only part of the picture.

The government has failed to address the long-term implications of the

way we communicate - via fax, e-mail, the internet - all of which pose

new challenges for a public sector Post Office. The proposals also fail

to give weight to growing competition from the likes of TNT and Federal

Express in other sectors.

With its market share under attack from aggressive foreign competitors

now, and the whole European postal market liberalised by 2003, the Post

Office is facing death by a thousand cuts. The government’s compromise

proposals will succeed only in delaying that decline rather than halting



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