Postmasters are set to receive a quarter of a billion pound boost to their income by 2030 as part of the Post Office’s (PO’s) five-year Transformation Plan.
PO Chair, Nigel Railton, has today (13 November) set out plans to deliver a ‘New Deal for Postmasters’ that significantly increases their total annual income through revenue sharing and strengthens their role in the direction of the organisation.
The PO’s ambition is to double average annual branch remuneration by 2030 and postmasters can expect up to £120m in additional remuneration by the end of the first year of the Plan, representing a 30% increase in revenue share.
In his speech delivered to postmasters and PO staff, Railton said: “As part of our ambition to strengthen the network, we also need to have an honest conversation about the loss-making parts of our network and our Directly Managed Branches [DMB], while still meeting the current requirement for 11,500 branches.” 115 DMB branches are at risk of closure, including nine in Scotland, based in: Edinburgh City, Glasgow, Haddington, Inverness, Kirkwall, Saltcoats, Springburn Way, Stornoway and Wester Hailes.
The ‘New Deal for Postmasters’ follows a Strategic Review initiated by Railton in May and the improvements to remuneration are subject to funding discussions with government, which the PO says are “positive and ongoing”.
Alongside this, the Post Office is establishing a new Postmaster Panel where serving postmasters will help the business to improve the support and training it provides to postmasters.
A new Consultative Council will also be established to work with the Post Office on the delivery of the Transformation Plan, and to challenge and feedback to ensure postmasters’ interests remain front and centre.
Railton outlined the commercial, operational, cultural, and reputational challenges that must be addressed to deliver change for postmasters and learn the lessons from the Horizon IT public Inquiry.
He said: “The Post Office has a 360-year history of public service and today we want to secure that service for the future by learning from past mistakes and moving forward for the benefit of all postmasters. We can, and will, restore pride in working for a business with a legacy of service, rather than one of scandal.
“The value postmasters deliver in their communities must be reflected in their pockets, and this Transformation Plan provides a route to adding more than £250 million annually to total postmaster remuneration by 2030, subject to government funding.
“It begins a new phase of partnership during which we will strengthen the postmaster voice in the day-to-day running and operations of the business, so they are represented from the frontline to the boardroom.”
In his speech, Railton stressed that that the Transformation Plan is a five-year journey encompassing a series of changes. These included:
- Strengthening postmasters’ commercial offer to their customers, particularly in banking, and to work with the Government, banks, LINK and Cash Access UK to accelerate the roll out of banking hubs.
- Delivering a lower-risk, better-value new branch IT system for postmasters gradually.
- A major investment in the automation of cash and mails services in-branch to reduce postmasters’ cost-to-serve in their branches and to give customers the experience that they have come to expect from modern retailers.
- Creating a new operating model for the business in which a streamlined central organisation acts as a support function for postmasters, offering expert support in marketing, training, and technology to postmasters.
The PO claimed it would continue to work through the details of the Transformation Plan with colleagues, postmasters, strategic partners and organisations that represent postmasters to refine the plan and implement the changes required to transform the business.
Neil Brocklehurst, PO Acting CEO, said:
“This Transformation Plan is the first step in a five-year journey that will set up the Post Office for years to come. There are many consumers who primarily shop online, but there also many who struggle to use online services or actively choose to shop on their local high street and who want to be served by a human being. Postmasters across the UK serve every generation and this plan not only improves their incomes but also the support that we provide to let them run their businesses and serve their communities.”
Elliot Jacobs, serving postmaster and a Non-executive Director on the Post Office Board, said:
“The last few years have been challenging for many retailers and postmasters are no exception. We have faced cost pressures from rising energy prices, increased National Minimum Wage and National Insurance Contributions. It’s vital that the Post Office embarks on this major Transformation Plan so that we have a sustainable financial future, and one that benefits the thousands of postmasters who work tirelessly day-in, day-out to support the local people and businesses who rely on us for essential everyday services.”
