Examination of Witnesses (Questions 140-159)
JONATHAN EVANS, MOELWYN JONES, DAVID MILLER AND DAVID MILLS
WEDNESDAY 1 MAY 2002
140. It was primarily the Universal Bank I was concerned about, as an entity, if that helps; it may not?
(Mr Mills) There are two elements of funding that are in the process, we hope, of coming from Government. On the one hand, there is the funding for the transformation of the urban network; and, on the other hand, we are looking to Government to provide effectively a social payment to keep the rural network open. Now, if neither of those two payments are forthcoming, many, many things that we are currently embarked upon cannot be done, because we just will not have the funds. The Universal Bank has practically already been paid for, in the sense that most of the infrastructure is down, as you know, the Government has invited many of the banks to come forward with money to support the Universal Bank, which they are in the process of doing. So the funding is coming from different places and not an exclusive area. But the two key things are, funding for the transformation of the urban network and a social payment for running the rural network, which clearly has a great role in the social policy of the UK.
141. But you are expecting the banks to provide a notable contribution towards this?
(Mr Mills) Absolutely; and they have already signed a memorandum of agreement with the Government to that effect.
142. But that, I understood, it was just how large a cheque that was going to be, but I suspect, at this stage, that will be a commercially confidential question, therefore I will not press it?
(Mr Mills) It is not in the public domain at this moment in time.
143. Carrying on with this social role for sub-post office schemes, the other opportunity that was flagged up in the PIU report was, of course, the general practitioner role for sub-post offices. Now, in your written evidence, under Commercial Opportunities, you have talked about the "Your Guide" pilot scheme in Leicestershire. Can you tell us, and it sounds from all the reports we have had to have been a successful pilot, when you would expect to roll that out nationally, and how the finances work, in terms of the sub-post office getting rewarded for providing what sounds like a very valuable service?
(Mr Mills) If I can answer the last part of your question, first of all. Those people who are offering information on what is now known as "Your Guide", will be expected to fund the payment of the activity in relation to their particular service on "Your Guide". So shall we say that every time a given Government Department is accessed we will charge them, hypothetically, 5p, on the basis that, in fact, their central costs are being reduced, because maybe they have not got to support a call centre to obtain information, maybe they have not got to provide printed information to people, and so forth. But the idea is that Government Departments have a much easier way of dispensing their information out to the public, and indeed other people do as well; so the funding would come from the users of those services. And we are in the process, at this moment in time, of discussing with Government which Government Departments are prepared to put themselves up on this service and pay for it. Now the fact of the matter is that if no-one steps forward we will not be rolling out "Your Guide"; if they all see it as a good way of reducing their costs, and believe that they should be putting it in their budgets and carrying it forward then we will be rolling out "Your Guide". And I am very, very hopeful that we will roll it out, because the market research on it is very good indeed, consumers of all types like it a lot.
144. So, presumably, you are in discussion with those mainly Government Agencies about this roll-out?
(Mr Mills) We are deeply involved with them, at this very moment in time.
145. And have you got a ballpark figure for the possibility of when it might reach the whole nation?
(Mr Mills) What I can tell you is that the current Government spending round requires Departments to put their budgets in by August, and that will fix the budgets for the next three years. Now if we do not manage to get agreement with the Departments by August then we will not have a proposition; if we do, we will, and I can tell you that we will roll this out with enthusiasm, if we manage to get agreement.
146. You will be familiar with Section 103 of the Postal Services Act 2000, which allows the Secretary of State to provide subsidies to support public post offices, certain types of post offices, or indeed specific services provided by the post offices. PostWatch Wales have told us that money has been set aside for this purpose in England but not in Wales; is this the case, could you confirm that?
(Mr Miller) I am not clear on that at all.
147. So you cannot confirm, one way or the other?
(Mr Miller) No.
(Mr Evans) I think we are talking here about the social network payment, which is a UK-wide issue.
(Mr Mills) If we are talking about the social network payment, Mrs Williams, that figure has not been agreed with Government at this moment in time, and we do not have confirmation that it is going to be made available. However, we do have conversations going on directly with Government on this, at this instant, and we are preparing a paper that specifies why we believe that, in particular, the rural post offices have a social role in the UK, what the cost of that social role is to us, and therefore what we believe Government should subsidise us to.
148. This is what PostWatch Wales are saying, they suggest that the network inevitably will require an element of systematic subsidy to support the public services dimension of post offices' work?
(Mr Mills) We would definitely agree with you, Mrs Williams.
149. Can I come back to the changes that you have made so far that have impacted on Wales. From the evidence you have given us so far, I cannot understand, and clearly the trade unions could not understand, what the criteria were that you applied to decide, for instance, that there should not be a manual data entry centre anywhere in Wales, and that there should be in the other locations that have already been mentioned. So it is really a two-part question. Is it possible for us to understand those criteria, as the Welsh Affairs Select Committee; but also what consultation went on, were the trade union side informed of the criteria you were applying and allowed to try to influence you on it?
(Mr Evans) I do not have first-hand information on precisely the issues to answer your question fully. And, therefore, it may better, rather than me just speculating, if you would like me to give you a note on how those arrangements were made, I would gladly do that. Generally, though, can I say this. If you take, for instance, the latest programme that we have announced, which is the restructuring of Parcel Force, the way we have looked at that is, here is a UK-wide issue, with certain objectives to come from that programme, and, given where all our Parcel Force depots are, up and down the country, how would it make sense best, logistically, looking at the UK as a whole, so to organise our affairs that we reduce the costs of our operation and give the service that we need, given that, actually, in the Parcel Force case, we are dealing with a reduced market. And the answer that we come up with, having done a lot of modelling, is we have changed from 101 depots to 50, 51 actually, and that is done through a lot of complicated modelling to give us what is the best outcome. Now your precise question is saying really, how, in the middle of all that, do we take into account, the impact on Wales, what is the impact on Scotland, you are not asking me about Scotland but you know what I mean.
150. Yes, fine, in a sense; I want a rationale?
(Mr Evans) My answer, and I will fill this out in a note, if it would be helpful, is to say that I think the way we are tackling these things is to look at the UK-wide position and determine what is the optimum arrangement for the UK as a whole.
151. The sorts of things that I am interested in are, something that has already been brought up by the CWU, that, apparently, Swansea, which is where I live, is handling all of Slough's second class post, or something, and could handle all of London's. Now were the people making the decision aware of that; were things taken into account like that Bristol is a booming economy and staff turnover for low-paid employment is likely to be far greater than, say, Swansea, where, sadly, we do not have quite that level of economic activity? Are all those factors taken into account? But also then, how did you engage with your staff to reach the decision?
(Mr Evans) Rather than me just say, yes, we did all of that, which clearly I would like to be able to say, let me make sure that I can say that with confidence, and give you a note on it.
Mr Caton: Yes, I am happy, if we can have a note.
152. And the corollary to that is that you would wish that to happen in the future, that process of consultation?
(Mr Evans) It is clearly part of the way we want to do business within Consignia generally, that where issues that are having a major impact, as they clearly would be here on our staff, yes, of course, we want to consult with them; and, to the best of my knowledge, I certainly know at the national level where we have been consulting with them on all these major programmes that we are talking about.
153. And could I, with the Chair's agreement, suggest, and I may be out of order here, but I am a new member, that Mr Moelwyn Jones comes and meets the Members of Parliament here collectively and also the Secretary of State for Wales, as part of that process?
(Mr Evans) We would be delighted.
(Mr Jones) I believe the Welsh Chairman is setting up such a meeting with the Secretary of State at the moment.
154. And the Members of Parliament?
(Mr Jones) I am not sure about that, but certainly with the Secretary of State. But we would welcome an opportunity to meet with you on this.
155. As an enthusiastic supporter of devolution, I would not wish to make a point that sounds against devolution, but when power in this area is not devolved then I would have thought that the most obvious thing would be to start with us and work backwards, rather than the way you have done it; but you do it your own way. But I welcome what you say.
(Mr Jones) I would say to you that a few months ago we did have a meeting with Welsh Labour MPs here, actually in this building, and I do not know if anybody present was actually here.
156. Before the election; it was about a year ago?
(Mr Jones) Yes; about 11 MPs came to that meeting. So we have started that process and we are seriously considering that.
157. Can I just clarify one point, before we close the session. The list of post offices which you gave us actually had correct numbering; it was an error on the part of the Committee, I am afraid, in that somehow we managed to photocopy it with just odd page numbers at the bottom. I do not know quite how it happened but it did, and I do apologise for that.
(Mr Evans) Does that mean, therefore, that you do not need any more from us on that?
158. No; what I was going to say was, I wonder if you could actually send us one with a more realistic ordering of the post offices, if you can do that?
(Mr Miller) Yes.
(Mr Evans) Okay; we can do that.
159. And, given that probably it is not a state secret, could we also append it to the minutes of the Committee?
(Mr Evans) Yes.
Chairman: Thank you very much indeed for coming.
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