HC Deb 23 June 1988 vol 135 cc642-3W
Mr. Roger King

To ask the Chancellor of the Duchy of Lancaster when the Monopolies and Mergers Commission report on the counter services provided by the Post. Office at Crown offices will he published.

Mr. Maude

The commission noted that in the short time since it was established counters had found many ways of reducing the costs of operating its network. These included the closing of some Crown offices, regrading others as sub-offices or franchised offices, closing some urban sub-offices and introducing community offices in rural areas; in its plans counters had assumed that the Crown network would be reduced from 1,500 to 750 offices by the conversion of 750 offices to sub-offices or franchises. The commission decided that a major conversion of Crown offices into sub or franchised offices would reduce counters costs yet maintain similar services. Its report therefore commended the action taken so far by the counters business but recommended that counters should compare the costs and contributions of Crown and sub or franchised offices and consider regrading an even greater number of Crown offices.

The commission found that there had been some improvement in the quality of performance attained by Crown offices. It commended the Post Office's efforts to reduce queueing time by, for example, installing new types of stamp vending machines and selling stamps through retailers.

Two automation projects being developed by the counters business were considered. The first project is a major scheme, which will incur further costs of some £360 million over the next 15 years. This will introduce electronic equipment in some 3,000 Crown and sub-offices out of a total of 21,500. The second scheme involves the introduction of electronic cash registers (ECCO) at all Crown offices. The commission has serious doubts about the financial justification for both the automation and ECCO schemes and concluded that the automation scheme, which would affect only 15 per cent. of counters business, is not financially justifiable at present. Approval of any further roll-out of the automation scheme should not, in the commission's view, be given until the planned pilot scheme had been properly tested.

Some working practices and clerical procedures were found to be outdated and inefficient and staff in Crown offices could be more effectively employed. The commission has therefore recommended that counters should carry out a detailed organisation and methods study in respect of the work of the counters offices; it considers that savings from the productivity recommendations could amount to some £10 million per annum.

The commission also concluded that the staffing of the central and territorial headquarters of the counters business appeared to be excessive for the management of a network where day-to-day management has been decentralised to 32 district managers. Recommendations that the territorial level of management should be abolished with resulting savings of about £5 million per annum are included in the report.

In an overall assessment of the counters business, the commission found that the management, in the relatively short time that it had been responsible for it, had put in hand many changes to improve efficiency. It concluded that the Post Office was not, in relation to the counters business, pursuing a course of conduct which operated against the public interest.

The Post Office will be producing a preliminary response to the commission's findings within three to four months, in the light of which a further statement will be made.