Royal Mail's Rationalisation And Modernisation Continues

[POSTMAN]

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Royal Mail is undergoing one of the most important change programmes undertaken in the UK. New delivery methods designed to enable Royal Mail employees to deal with the changes in the postal market - a decline in letters and an increase in packets - are being introduced. Significant reductions in the number of mail centres are also underway and around half of the 64 centres in 2010 could eventually close by 2016 or sooner.

Today, after more than nine months of consultation with the CWU under the 2010 Business Transformation agreement, Royal Mail is announcing its plan for rationalisation and investment in Greater London. With the number of postal items posted in London expected to more than halve between 2006 and 2014, it is imperative that Royal Mail continues the modernisation programme.

Following these consultations with the unions, it is likely that only five mail centres will be needed in Greater London. We expect the rationalisation of the mail centre estate to see the phased closure of the East London and South London mail centres to commence immediately. The mail centres remaining are: Croydon, Greenford, Jubilee (Feltham), Romford and Mount Pleasant. New accommodation is also being sought for the administrative and support staff based at Rathbone Place. The Greater London rationalisation programme is expected to achieve annual savings of £30 million.

Mount Pleasant is a large facility which needs significant investment to handle the postal volumes in London, including the change in the mix of items. Royal Mail expects to invest £69 million in Greater London as part of the UK-wide modernisation programme; of this, £32 million will be invested in Mount Pleasant. The latest automation equipment will be installed there; working conditions will be significantly improved.

Royal Mail would like to thank the CWU for its valuable input including a report produced by the union. Following the union’s input, East London mail centre will close six months later than originally planned. The company is also providing extended outplacement facilities for its employees in London, as discussed with the CWU. The consultation on the London mail centres commenced in early June. In November 2010, Roger Poole and Peter Harwood were asked to assist in bringing the review to a successful conclusion. Both Roger Poole and Peter Harwood had played a significant role in the 2010 Business Transformation agreement.

After much study and careful thought, Royal Mail believes it will not have to resort to compulsory redundancies to manage the reduction in the number of employees. With people demonstrating reasonable flexibility, Royal Mail expects that everyone who wants to remain in the business will be able to do so. As a result of the rationalisation programme, we expect the number of people employed in London will decline by approximately 751. The company has in place a well-developed programme to help its people to adjust to these changes.

Consultations with Unite/CMA will also begin shortly on reducing the number of Royal Mail operational line managers across the UK by up to 1,000 through voluntary means. This follows a separate review of managers in head office departments which will result in 1,700 people leaving the Group when this specific initiative concludes. The company has reduced the number of employees by around 65,000 since 2002.

Mark Higson, Managing Director of Operations and Modernisation, said: "Royal Mail’s modernisation programme, which is vital to ensuring a successful future for the letters and parcels business, depends on having the right number of people in our business as well as deploying the right technology and equipment.

"We are conscious of the impact today’s announcement will have on our staff in London. It is hard to reduce job numbers at any time; we are committed to doing everything we can, in line with our agreement with the union, to make these changes on a voluntary basis. We will be providing specialist outplacement advice to help our people affected by this announcement to look for new opportunities outside Royal Mail."

Ends

Issued by Royal Mail
If you have any queries, please contact:

Shane O’Riordain, Director of Communications
020 7449 8105

David Simpson, Director of News 020 7250 2839

Royal Mail Group Communications
100 Victoria Embankment
LONDON
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Notes to Editors

London Mail Centres:
• The aim of the £32 million investment in Mount Pleasant is to bring the site up to World Class Mail standards. The international mail processing work currently largely undertaken manually at Mount Pleasant will transfer, on a phased basis, to the entirely automated Heathrow Worldwide Distribution Centre in Langley.
• Royal Mail’s South London mail centre in Nine Elms Lane will close in 2012.
• The East London mail centre in Twelvetrees Crescent, Bromley-by-Bow will close in 2012. Royal Mail will remain a significant employer in East London with around 1,120 postmen and women working in 18 delivery offices and three collection hubs in the area.
• Royal Mail’s West End delivery operations, currently based in Rathbone Place, will transfer to Mount Pleasant during 2013.
• The World Class Mail programme is a dedicated Royal Mail initiative and a vital part of the Group’s modernisation programme. It is an international benchmark for improvement, based on principles set out by the World Class Manufacturing Association, including safety, customer satisfaction, environment and people development.
• There will be no changes to Post Office branches in Greater London as a result of these changes.
• In London in 2006-07, 831 million items were posted. By 2013-14, it is forecast that 353 million items of post will be posted in London. Across the UK, the average number of items of mail posted daily has fallen by 16 million compared to five years ago.
Financial Position
• The latest financial results showed Royal Mail Group’s operating profit in the first half of the 2010-2011 financial year (to the end of September 2010) was £52 million - a 72% fall on the £184 million operating profit in the comparable period a year earlier.
• The Royal Mail Letters business, the largest part of the Group, made a £66million operating loss during the first half of the current year.
• There was a Group net cash outflow before financing and investing activities of £229 million during the first six months of 2010-11.

[nOfailmylife]

just heard in my office off the local union rep..............

THERE MIGHT NOT BE ENOUGH MONEY IN THE BUSINESS THE PAY THE STAFF WAGES NEXT MONTH

just a rumour???

(nottingham)

[hans solo]

well as were still owned by govmt does that mean they go out of business as well

[TrueBlueTerrier]

well as were still owned by govmt does that mean they go out of business as well

We can only hope.

[Judgee]

"Royal Mail would like to thank the CWU"


Yeah I bet they do!

[Wessex]

just heard in my office off the local union rep..............

THERE MIGHT NOT BE ENOUGH MONEY IN THE BUSINESS THE PAY THE STAFF WAGES NEXT MONTH

just a rumour???

(nottingham)

I believe it to be accurate, staff will only get paid if their surname begins with a g or h

[Mangonuts]

Where is all the money going then? When the financial books have been opened up for independent scrutiny then we can work out whats going on, at present its just Royal Mails PR.

[demon]

we will not go bust wagers will be paid just fine managers will go tho and there bouneses taken from them

[nOfailmylife]

heArd the money has gone on new vans and MACHINES...!!!!!

[bexhil palace]

heArd the money has gone on new vans and MACHINES...!!!!!

I want proof.
No sign of either round here.

[Big Daz]

Where is all the money going then? When the financial books have been opened up for independent scrutiny then we can work out whats going on, at present its just Royal Mails PR.

Perhaps nowhere, perhaps RM have never budgeted for CS buy back Al and Adam simply assumed everthing would just fall into place but jumped ship when they realised that might not happen.

[dekcuferew]

Adam did not jump ship he was given no choice but to leave, just remember who was the business secretary at the time of his downfall, yes you guessed it The Dark Lord who felt adam stood in the way of his wish to privatise us. I could not stand the man but no one would refuse the kind of pay off he got.
Adam was not clever or strong enough to force these things through. And to answer the financial reasons behind the collegue shares sudden downfall is down to some very clever accounting from the top, whoever looks into the books will have to understand large institutions and how they work.

[Alfietherat]

The mail is going to halve in the next 6 years-what a load of bollocks! Population is going up more people are buying stuff over the internet.I remember in the late 90's managers said the internet was going to kill us.It just created more work for us.

If Royal mail say they have no money its because of
1/ Updating computer systems to the sum of £200 million
2/ CDV vans (petrol)
3/ walk sequence machines
4/ Useless casuals
5/ Overpaid managers

[TrueBlueTerrier]

The mail is going to halve in the next 6 years-what a load of bollocks! Population is going up more people are buying stuff over the internet.I remember in the late 90's managers said the internet was going to kill us.It just created more work for us.

If Royal mail say they have no money its because of
1/ Updating computer systems to the sum of £200 million
2/ CDV vans (petrol)
3/ walk sequence machines
4/ Useless casuals
5/ Overpaid managers

agree with all except 4 - useless casuals are caused by bad management and bad training. The act of having casuals is expensive., but whether they are good or bad has no bearing on the overspend.

[Taff26]

With regards to the comment made about casuals/fixed term contracts - the training we are given at the depot is non existant and nothing like suggested during the induction that we went through. I have only been with RM a few months and already have been put on 7 different rounds, which is more than most of the staff that have been with RM years. Permanent staff are just concerned about getting out as quick as they can so that they can finish as soon as they can, some of my collegues have been helpful in showing me the ropes, however others dont want us newbees with them as we slow them down