Modernisation or Privatisation? CWU Vision

[lovejoy]

Modernisation or Privatisation?

The CWU Vision for the Future of Royal Mail.

Much has been written and said about why partial privatisation is not the answer to securing the future of Royal Mail. Quite rightly so. The truth is that that even if extra funding was required to pay for Royal Mail’s future plans, and at present that does not appear to be the case, then it by no means certain that the measures contained in the Government’s proposals would provide it. Neither is it clear how the introduction of private sector management will result in new ideas or better industrial relations. There is little evidence of this in those privatised postal administrations in other countries and, in any case, most senior Royal Mail come from the private sector now as it is. Privatising Royal Mail but keeping Post Office Limited in public hands would mean splitting the businesses up and risk damaging both irreparably.

It’s clear that the New Labour Government has put privatisation forward for ideological rather than practical reasons. They believe that a private solution is always be better than a public one and that the generation of profits should always have a higher priority than the delivering of services. The CWU does not agree. A management team brought in from another private concern will have, as their primary aim, the interests of their shareholders at heart. This will mean maximising profits at the expense of all other considerations. If they don’t achieve their objectives, they will simply walk away. We believe that privatisation, either full or partial, will inevitably lead to a worse service, higher prices, worse industrial relations and, ultimately, involve an even greater call on the public purse than at present, as the Government will have to step in and clear up the mess. This was the case with Railtrack and, increasingly, with other privatised utilities as well.

Modernisation

The case against privatisation, however, is only half of the story. Much less attention has been given to what is meant by the term “modernise”. The Hooper Report is titled “Modernise or decline”. It’s clear what the authors of that report, be it Richard Hooper or Peter Mandelson, think modernisation means. Leaving aside the issue of the lack of investment on new equipment, which successive Governments are responsible for and which the CWU has complained about for decades, the key area where the “unmodernised” Royal Mail is compared with its “modernised” continental counterparts is in the ability to generate profits. The figures used are highly dubious in any case and ignore the fact that for many years Royal Mail made healthy profits to swell the Government coffers. They ignore the large investments made by foreign governments into their own postal industries and the different circumstances faced in these countries, including, in some of them, the retention of the monopoly for some products. They ignore the higher prices charged in these countries and, of course, they ignore the level of service provided.

Royal Mail is judged to be old fashioned and inefficient because it has too many mail centres and delivery offices compared to abroad and because it employs too many staff doing too little work and pays them too well. The solution is therefore to close mail centres and delivery offices, sack thousands of postmen and women and cut their pay. It doesn’t take much imagination to realise what this would do to the service.

Mister Hooper also has words of advice for the CWU in his report. He also judges us to be old fashioned and in need of “modernisation”. As well as having the gall to negotiate rates of pay well above what our members really deserve and duties that are far too cushy, we are held responsible for preventing Royal Mail from “modernising” by stopping the introduction of new machinery. Needless to say, there is not a shred of evidence provided to support this. Although there is an acceptance of a lack of trust on both sides, the emphasis is on the Union changing. We must “accept the scale of the transformation required, and show (we) can tackle the behaviour and internal processes which at present result in confrontation and obstruction”. In other words, act as a junior partner in management’s plans. On the other hand, all that is required from Royal Mail is that it “sets out its vision for the company in a transparent way, the implications of transformation, the risks of failure, and the opportunities in diversification”. In plain English that means tell us what they’re going to do.

Modernisation and Royal Mail

Royal Mail, similarly, make great play of the term “modernisation”. It has become abundantly clear in recent years what they mean by this. What has not been involved is buying new and modern equipment. Despite borrowing £1.2 billion off the Government nearly three years ago expressly for that purpose, to date, only half of that has been spent, mostly on redundancy payments. Despite having a supposed commitment to automating the sorting of mail, only a handful of new machines have been installed and the programme has been repeatedly put back. A programme to install tracking equipment in all vehicles to aid safe and efficient driving has recently been halted.

Instead, the emphasis has been exclusively on reducing costs. Less than 10 years ago, Royal Mail provided two deliveries a day, the first at around breakfast time. In some places, letter boxes were cleared up to five times a day, some as late as 7.30pm. Now there is only one delivery and because of staff shortages in some areas this can arrive as late as 4 or 5pm. Not so much a case of getting rid of the old second delivery as abolishing the first. Collections now only happen once a day for most boxes, with the collection times becoming ever earlier. For some businesses that depend on responding to mail on a daily basis, their delivery can sometimes arrive after their collection.

Mail Centres have been shut down without consideration to the effect on the service. In some cases, the offices due to take this mail have been unable to cope with the extra amount and it has had to be returned to the original site. Local delivery offices have been shut with no regard to the views of the communities they serve. When introducing new equipment, the only criteria applied is “will it cut costs?” The plan for introducing sorting machines will actually lead to later deliveries in many areas and to a shift from full time to part time staff. It seems that for Royal Mail at present, they are modernising to make the service worse, whist at the same time, charging more for it.

But it’s not just the service that is suffering under the guise of modernisation. Royal Mail now operates a style of command and control management that is far from modern. It is, in fact, more reminiscent of Victorian mill owners. Decisions on company policy and major initiatives are made by a small number at the centre and then driven down. At national level there is a refusal to involve the CWU in shaping plans for the future direction of the company or to negotiate agreements on the introduction of new equipment or work methods. The dominant attitude is that the Union have no place in the decision making process and that management know best. This is despite the fact that initiatives are regularly adopted and then dropped like wrapping paper without any form of accounting and that senior managers are appointed and then removed much in the manner of former Soviet-block states.

At local level, the consequences of “do as I say” management are appalling industrial and employee relations. The attempts to foist changes that are unagreed, poorly understood even by local managers and viewed by staff as an attack on their jobs and conditions on workplaces has led to a rash of requests for industrial action lately. Local CWU Representatives are routinely threatened with disciplinary action for representing the views of their members and in some cases dismissed. Staff are bullied and harassed into working beyond their contracted hours, sometimes without extra pay and with no regard to health and safety as local managers attempt to meet impossible budget targets by cutting down on staffing. At the moment, Royal Mail is not a nice place to work in.

The CWU View

The CWU has said all along that we are happy to deal with and embrace modernisation of our industry. In many aspects, we have been campaigning for this for many years. We have, however, a very different view of what a modern Royal Mail should look like from Hooper, Mandelson or the current Royal Mail management.

We, of course, accept that the business should be run as efficiently as possible and be cost effective. We have a long history of negotiating agreements with this aim in mind. The deciding factor in any decisions regarding future direction, however, should be the effect on the service, not the effect on potential short-term profits. A postal service that provides the public with what they want at times that are convenient to them and at a reasonable price will be seen as a successful, modern service. A service that initially makes super profits by savage cutbacks and large hikes in price that then has to be bailed out by Government because no one uses it anymore will be seen as a failed service. We have, unfortunately, had all too many examples of this in the recent past. Subjecting Royal Mail to a similar experiment has nothing to do with modernisation.

The CWU have offered Royal Mail a blueprint of what a successful, modern postal service could look like. This is based on putting our delivery and collection service at the heart of our thinking. When the public post an item of mail, they should know at around what time that item will be delivered. The standard residential delivery should take place between defined hours during the day and not be altered or extended by local managers seeking to cut costs. Firms, which depend on getting their mail early on, should receive a main delivery between 7-10am, with a further delivery later on to deal with late-arriving mail. For those who want an item to be delivered before, say, 09.30 the next day, there could be a “super” first class tariff, costing more than first class but a lot less than that charged by couriers. Packets and items needing signatures should be delivered at times convenient to customers. This could be either early morning or late afternoon/evening. Collections of mail should be planned flexibly to both make sure that items can be delivered according to their specification and to suit the needs of posters. Enquiry offices, at present sadly neglected by Royal Mail, should be expanded to be the shop front for the business. As well as providing access to the full range of Royal Mail products and services, they should be equipped to take full advantage of the explosion in Internet based trading. Unfortunately, Royal Mail has yet to take us up on this.

It goes without saying that a truly modernised postal service will need the most modern equipment and working conditions. The CWU consistently argued for greater investment in new machinery during the long years when profits were merely handed back to the Government as dividend. We have long campaigned to improve the conditions our members in delivery work under and the methods of delivery used, methods that would be recognised by our great grandparents. But what is crucial is that any changes are made to fit in with the needs of the services we want to provide and not the other way around.

When planning the introduction of new equipment, the first questions asked shouldn’t be “how much money can we save?” but “how will this improve what we currently provide and will it let us offer something new?” The Royal Mail network of mail centres, delivery offices and the logistics operation that links them should be based on what we need to deliver the best service, not the cheapest cost. If the delivery or collection service can be improved by moving the operation from one site to another or by making other changes to the network, fair enough. If the move will lead to a drop in the quality of the service provided, it shouldn’t be considered. In addition, often the Royal Mail office is one of largest, if not the main, employer in a particular area. The effect on the local economy of closing down the operation has to be considered before any decision is taken.

Neither should changes be brought in at the expense of the workforce. If anyone thinks that a modern and effective postal service can be run on the backs of poorly paid, part time workers forced to accept changes against their will and to travel many additional miles to work, then they are deluding themselves. New machines that do the job quicker should lead to a cut in the working hours, not just job losses. Changes that improve efficiency should lead to higher wages and not just increased profits. Better equipment and different working methods should lead to more interesting and worthwhile jobs and more full time work, not less. Where staff have to change workplaces, it should be made as easy as possible with improved transport arrangements or relocation packages. Where jobs have to go, improved redundancy terms, retraining packages and help in finding new jobs should be offered.

The CWU fully accepts that changes there must be. But change should be by negotiations and agreement between the company and the Union that represents its workforce. Surely that is the modern way of doing things, isn’t it? The CWU have offered Royal Mail draft agreements on introducing new equipment and dealing with changes to our network that take into account the needs of the service, our members and the public. Again, sadly, they appear to believe they don’t need agreements and can just plough on regardless.

Democratic Control

If Royal Mail is to become a truly modern company, then the current command and control style of management has to go. The CWU believes that in a company that owes its very existence to the need to serve the public, what we need is not privatisation and more private sector management but more democracy. Democracy that allows the public and major customers a say in what services are provided and what changes need to be made in terms of service levels and pricing. Democracy that allows the staff and their Unions a greater say in the issues that affect us.

At the moment, the body that makes all the major decisions in Royal Mail, the Board, consists of eleven senior managers and other appointed worthies who, almost without exception, follow the management line. They do not appear to be directly accountable to anyone but themselves. The CWU says the Royal Mail Board should be opened up to both the Unions and customers, both large and small. The model here could be, perhaps, a third Union, a third customers and a third management. This could be replicated at lower levels with regional or area boards with a similar makeup. With these different interest groups represented and with no one able to ride roughshod over the others, decisions are more likely to be made in line with what’s best for the service as a whole rather than on the basis of what costs the least or makes the greatest profit.

Gone too must be the bullying style of management, carried out by an ever expanding number of extremely well-paid managers whose sole task is to stand over staff and impose the diktats of their masters. This was out of date 100 years ago and has no place in a modern workplace. If the Union, which represents the vast majority of the workforce, has a significant say in the strategy and direction of the company and can freely negotiate at every level any changes that need to take place, then there will be no need for most of them. Our members do not need to be constantly told how to do their job. They do it every day. If changes have to be made and they have been involved through their elected representatives in agreeing both the change and how it is going to be implemented, they don’t need anyone to force them to do it. Workplace democracy would be enhanced and costs reduced at the same time.

Royal Mail is standing at a crossroads. One road leads to modernisation as outlined above and a healthy future. The other leads to privatisation and all the ills that we have seen in other industries that have suffered a similar fate. The roads do not run parallel to each other. They go in opposite directions. We can realise the CWU vision of a modernised Royal Mail, operating in the interests of all concerned. But only, with the help of those Members of Parliament that support our case, other concerned bodies and the British public, by defeating this Government’s ill-conceived plans and forcing them to consider our alternative. Join our Campaign to Keep the Post Public.

Pete Keenlyside
April 2009

[postie1973]

new labour omg 10 years with them and the country and the rm is fecked

[k979aaa]

Thanks lovejoy for the info and we all now have too think long and hard who we all vote for in the European and local elections as well as any future general elections if there is one!.