CWU Accounts 2010 – Questions to the accounts

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Letter to Branches




No. 478/11
Ref: TK/PM/sn
Date: 17/05/2011

CWU Accounts 2010 – Questions to the accounts

Further to LTB419/11, dated 26th April 2011

The above LTB contained a copy of the 2010 CWU Accounts (excluding Branch Balances) and invited branches to submit relevant questions. Accordingly we received 2 questions from branches and the answers to these questions are listed below.

Question 1: Western Counties Branch

We would wish to ask the following question:

How much to date is the cost to the CWU of employing the outside PR/Lobby Company in relation to the Keep the Post Public Campaign ?

Answer:

Costs incurred for the Keep the Post Public campaign for 2010 were £328,703.44p. Of this, the external PR/Lobbying Company Philip Snape Associates were paid £25,086.25p.


Question 2: South East London Postal & Counter Branch

Tony on page 2 of the accounts you state “The main message to take from the operating surplus and the figures that make up that total is that we have clearly begun to address the issue of HQ expenditure as the is down by £1.58 million on the previous year”

My Branch have looked at the HQ expenditure Item on page 10 of the accounts which state that the 2009 expenditure figure of £20,761,630 had been reduced in 2010 to 19,177,189 a saving of £1,584,441 but when we looked at page 33 of the accounts it can clearly be seen that the majority of this saving came about because it was not necessary for officers to convene Meetings/Activities. In 2009 the expenditure on these meetings was £2,555,114 and in 2010 this figure had been reduced to £1,138,152 a saving of £1,416,962. This was the larger part of the £1.58 Million that you quoted that was made during the year. My branch would like to know if this is what you term as clearly addressing the issue of HQ expenditure?

Also my Branch would also like to know why when the Union is waging a war on expenditure that page 33 Item S Salaries and Payroll Costs shows that Salaries and substitution costs increased from £6,806,296 in 2009 to £6,914,059 in 2010 an increase of £107,763.
Answer:

The item referred to in the question i.e. Meetings/Activities is one of 58 sub-headings used to allocate CWU HQs expenditure and is reported in the notes to the accounts. It is factually correct to state that this item reduced by £1,584,441. However this is one of a number of very broad headings which covers many Union activities. The main part of the decrease is on the Keep The Post Public campaign where expenditure fell from £1,720,219 in 2009 to £328,703 in 2010 a total reduction of £1,391,516. This was somewhat offset by expenditure of £112,544 on a BT dispute (nil in 2009).
Question 2 continued:

What is also clear from an examination of all the other lines is that of the 58 sub-headings used within the section concerned, of which this item is only one, 40 saw a reduction in expenditure whilst 18 saw an increase. The question seems predicated on the assumption that only one item is responsible for the reduction in HQ expenditure; it clearly isn’t as any routine examination of the accounts will show. The position of this and indeed any set of accounts is the total of cumulative performance and not any single item.

Indeed 18 of the sub-headings returned an increase, meaning to achieve an overall reduction other areas must have cut expenditure –and these accounts clearly show, in the same section as the one highlighted, that such reductions did occur. If the only reduction and thus the only change on 2009 had been the one referred to by the Branch then the accounts would have reported an operating loss.

We also need to be clear that on the terminology used in the final paragraph of the Branch question. The question uses the phrase “clearly addressing the issue of HQ expenditure” this is not the statement used in the report of the accounts. The correct term used is “clearly begun to address the issue of HQ expenditure” the emphasis here is that a process has begun and the 2010 accounts are neither the beginning nor are they the end of the work the NEC has and continues to undertake in this area.

Also there is no “war on expenditure”. Nowhere in any report or communication on the finances of the CWU has the term “war” been used.

The task we have, collectively, is to control income in relation to expenditure. If income continues to drop then so must expenditure. However if income was to rise then the pressures on expenditure ease. The point is to utilise what disposable income we have in the right areas. That is how the debate on CWU expenditure has been prioritised in the recent past and it is precisely how it will be prioritised in the future. This is not waging war, it is dealing with the very serious issue of overall control of our disposable income in a responsible manner.

This also places on us as a Trade Union a responsibility to deal with our employees in line with the values we operate under when representing our members.

Accordingly this will require us to deal with requests from the appropriate recognised trade unions to raise employees salaries. At the pay review date of our employees salaries in 2010, RPI stood at 4.4%. The increase in cash terms on salaries and payroll of £107,763 represents an increase on the previous year of 1.58% i.e. controlling this cost to a figure of 2.82% below inflation. This reflects a responsible approach to this issue for 2010.

In order to deal with this matter for the future the NEC has targeted a reduction in this item of expenditure of £1 million. In order to achieve this there are likely to be some “up front” or “one off” costs in order that the ongoing liability can be reduced as planned. This will appear in the 2011 year end accounts. Again, this is not a “war” but a planned approach, engaging with the Unions representing our employees, to control expenditure against income.

Any enquiries regarding this Letter to Branches should be addressed to the Senior Deputy General Secretary Department on telephone number 020 8971 7237 or email address sdgs@cwu.org.

Yours sincerely

Tony Kearns
Senior Deputy General Secretary